For U.S. online sellers, establishing a sales tax nexus in Canada means having a significant presence or economic connection that requires the collection and remittance of Canadian sales taxes. Here are key points to consider:

1. Physical Presence: Having a physical location, such as an office, warehouse, or employees, in Canada.
2. Revenue Threshold: Exceeding specific sales thresholds for each province or territory. For example, British Columbia requires registration if annual sales exceed CAD 10,000.
3. Digital and Remote Services: Selling digital products or services to Canadian consumers may also establish a nexus.

Registration Requirements

Once a nexus is established, U.S. sellers must:

– Register for GST/HST with the Canada Revenue Agency (CRA).

– Register for PST/QST in provinces like British Columbia, Manitoba, Quebec, and Saskatchewan, if applicable.

– Collect and remit the appropriate taxes on sales to Canadian customers.

Example of Provincial Requirements:

– British Columbia: Requires PST registration if sales exceed CAD 10,000 annually.

– Quebec: Non-residents must register for QST if they make taxable supplies to Quebec residents and exceed CAD 30,000 in sales.

Summary Table of Provincial Registration Thresholds

Understanding these requirements helps U.S. online sellers comply with Canadian tax laws and avoid penalties.