Selling (Personal Use) Goods (< $30K) To Canadian/US Buyer - Taxes ?

[chrisgra-4475]

As a Canadian selling on ebay.ca and plan to only allow shipping to Canada and the USA.

As I understand it, if I sell personal use property (and less than $30K in value at that), I do not have to register to collect and remit the HST for a Canadian sale.

As I understand it, if I sell personal use property to a US-located buyer, I (or eBay) will have to charge, collect, and remit US taxes (particular to states and etc.).

Can someone with experience please let me know if my understanding is correct, and what I'd have to do to properly configure my new account vis-a-vis taxation in order to sell to Canadian and US buyers? Thank-you.

[ypdc_dennis]

eBay handles "internet" sales tax for the US states that are signed up. Nothing for you to worry about (all the details are handled by eBay).

You only need to do something for Canadian sale tax if you are registered to collect sales tax. Nothing to set up for a small seller if you are not. The requirement to register is $30000 in sales for GST/HST.  If living in BC, SK, MB or QC there are also provincial regulations.

-.-

[kawartha-ephemera · Accepted solution]

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@chrisgra-4475 wrote:

As a Canadian selling on ebay.ca and plan to only allow shipping to Canada and the USA.

As I understand it, if I sell personal use property (and less than $30K in value at that), I do not have to register to collect and remit the HST for a Canadian sale.

Correct. You are not required to register if your gross sales are less than 30,000 annually. 

As I understand it, if I sell personal use property to a US-located buyer, I (or eBay) will have to charge, collect, and remit US taxes (particular to states and etc.).

You have no responsibilities around collecting and remitting U.S. sales taxes. This is ebay's responsibility, they handle the collection of Internet Sales Tax (IST).

Can someone with experience please let me know if my understanding is correct, and what I'd have to do to properly configure my new account vis-a-vis taxation in order to sell to Canadian and US buyers? Thank-you.

In the circumstance you have described you should definitely not indicate anywhere in either your account setup or listings that you charge and collect sales taxes because;

• You are not registered to collect GST/HST from Canadians
• Ebay handles IST where applicable in the U.S. and Internationally.

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[kawartha-ephemera]

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@chrisgra-4475 wrote:

As a Canadian selling on ebay.ca and plan to only allow shipping to Canada and the USA.

Sometimes buyers in foreign countries will purchase an item even though a listing had no shipping service (or shipping charge) provided for their ship-to location. To prevent this common problem from occuring setup your excluded countries list at Site Preferences / Shipping Preferences / Exclude shipping locations, click edit. 

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[reallynicestamps]

If you sell $30K of personal property, you should discuss the "windfall" with your tax preparer.

While I believe this would not count as income or as capital gains, my financial knowledge is based on being the world's worst bank teller, over 50 years ago.

[chrisgra-4475]

Thank-you to all for your helpful replies.

[darak10]

Correct. You are not required to register if your gross sales are less than 30,000 annually. 

This needs to be qualified as its misleading.  Sellers need to understand that Canadian tax law stipulates that you do not have to register to collect GST if you sell less than 30,000/yr AS LONG AS you are operational for one day short of four consecutive quarters.  The second you are in business selling for four consecutive quarters, you are LEGALLY OBLIGATED TO APPLY FOR A GST NUMBER AND REMIT GST on sales made to customers within Canada only, even if your sales are less than 30,000/yr.   

Thats the law folks.  

[recped]

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@darak10 wrote:

Correct. You are not required to register if your gross sales are less than 30,000 annually. 

This needs to be qualified as its misleading.  Sellers need to understand that Canadian tax law stipulates that you do not have to register to collect GST if you sell less than 30,000/yr AS LONG AS you are operational for one day short of four consecutive quarters.  The second you are in business selling for four consecutive quarters, you are LEGALLY OBLIGATED TO APPLY FOR A GST NUMBER AND REMIT GST on sales made to customers within Canada only, even if your sales are less than 30,000/yr.   

Thats the law folks.  

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You are misinterpreting the registration requirements.

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/when-regis...

The only thing "misleading" is that the $30,000 is not based on a calendar year but rather on 4 or less consecutive quarters.

[cumos55]

That $30,000 value is a total for item price plus postage.

The buyer pays a total for the item plus postage  and then it is the seller that pays for the postage.

Almost every time I see this $30,000 value ...... There appears to be no understanding that this is for a total of Item price ... plus... postage.

[cumos55]

The only thing one must consider with  sale of personal items is  capital gains.

If something sells for more than $1000  then there is a capital gain.

If something was originally purchased for more than $1000 and then sold for less than the purchase price there will be a capital loss.

The net capital gain is capital gain minus capital loss.... and only 50 % of this amount for capital is taxable. 

There should be no charge of GST/HST  on the sale of personal items..... even if the total sale of items is more than $30,000

This discussion has gone in the wrong direction.  There should be no collection of GST/HST on the sale of personal items.

Capital gains ... and taxable capital gains should be the only consideration with the sale of personal property.

There is a lot of good information  for Capital Gains on the Canada Revenue Agency website.  

There is also lots of information with respect to the collection of GST/HST.

Then do a search for .....GST/HST Capital Gain ..... on the CRA website.... GST/HST in relation to capital gains

and... there is no information for a relationship between GST/HST and capital gains.

OP is selling personal property  and is not selling as a business.

If each item that sells  is personal property and sells for less than $1000  there will be no capital gains,  and nothing will be reported as a taxable amount.....

[cumos55]

There should be no charge of GST/HST  on the sale of personal items..... even if the total sale of items is more than $30,000.

My error ..... My brain had to wake up to a correct reality

The probability of selling personal property at a level even close to that requiring a seller to register to collect GST/HST is very low.

This all depends on what the seller is prepared to list and sell....

The seller might have some good sales but  the probability of super good sales  is low unless that seller has a high value collection or high value items to be sold.

OP has no feedback and should start with low priced items   and only after about 150 feedback received should the sale of higher priced items be considered .....

and never some close to sales that would require one to register and collect GST/HST.

[reallynicestamps]

ZOMBIE THREAD FROM 2020.

The problem with zombie threads is that the advice may no longer be accurate.

In this case,no one is presenting as a qualified tax accountant.

If you have a windfall of $30,000 which is more than a year's income at minimum wage in some provinces, you should be talking to an accountant.

And every penny you earn is taxable, but also qualifies for tax deductions.

[kh-leslie]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.

Thank you for understanding.