Anybody here run an online business in BC or Canada?

[nb23]

Alright,

 

So I contacted a retailer, and they are willing to sell to me at wholesale prices if I have a resale certificate. How do I get one of these? I've searched the internet and can only find them for the U.S.

Since I'm buying from the U.S will I need one for Canada, or the U.S.

 

The U.S retailer collects taxes already, so will I have to still charge my customers taxes when I sell it again?

 

If I purchase items from a retailer in Canada, and they charge me GST and PST, will I still have to charge taxes?

 

Do I have to pay U.S taxes? (The retailer does not charge me U.S taxes)

 

Do I have to register my business? Get a tax number? Vendor permit? For both the U.S, or just Canada?

I'm young, 19, am I old enough to open my business?

 

Any other information you think I should know please tell me!

 

Thanks.

[MrPhil]

So you're looking to purchase goods at wholesale in the US and import them into Canada for retail sale? That could be fairly complicated. First of all, a "resale certificate" is needed by a seller to prove that you are a legitimate business and will be reselling merchandise, and thus your wholesaler doesn't have to collect state sales tax on it. What they charge you for "wholesale" is up to them, but they want to be able to prove they're in the right in not collecting state sales tax (there is no US national sales tax -- yet). If you're shipping out of the wholesaler's state, I don't know why they'd care about a resale certificate (maybe they're just trying to brush you off). If you're planning to pick up the merchandise in person (no paper trail proving it's to be exported), they would need a resale certificate for that state. That state should have a Web site explaining such things.

 

Whether or not you can get the merchandise in the US without paying sales tax, you may need to pay customs duties at the border. Be sure to figure out ahead of time what's involved for fees and paperwork, especially if you will be carrying it across the border yourself! You will certainly have to pay national and provincial sales taxes, VAT, and whatever else has to be collected there. Obviously you will have to register your business (possibly as just a sole proprietor) and get the appropriate sales tax paperwork done. I would start by asking your local government what needs to be done to go into business. Maybe there's a Chamber of Commerce that could give you some pointers? There are bound to be some resources on the Web that will lead you through all this, or at least give you an idea of who to ask.

 

I don't know what the tax rules are in Canada when you sell into another province (national taxes, of course; provincial taxes, ??). I don't think you'll have to collect any sales tax selling into the US, but you may have customs duties when merchandise (re)enters the US.

 

You're 19? If the "age of majority" (adulthood) in BC is 18, you should be in the clear. If it's 21, you would probably need at least a parent or guardian to cosign the papers. 18 is the usual age in the US for business transactions.

 

One last thought: you mentioned buying from a retailer. This may put you legally in the "gray market", as an unauthorized dealer. Brand names often don't like being sold through such channels, and your merchandise may be seized at the border (in either direction) on suspicion of trademark fraud or some other reason. Whether the reason is valid or not, you may find it quite expensive.

 

Good luck!

[nb23]

Thanks for the reply!

 

So you're looking to purchase goods at wholesale in the US and import them into Canada for retail sale? That could be fairly complicated. First of all, a "resale certificate" is needed by a seller to prove that you are a legitimate business and will be reselling merchandise, and thus your wholesaler doesn't have to collect state sales tax on it. What they charge you for "wholesale" is up to them, but they want to be able to prove they're in the right in not collecting state sales tax (there is no US national sales tax -- yet). If you're shipping out of the wholesaler's state, I don't know why they'd care about a resale certificate (maybe they're just trying to brush you off). If you're planning to pick up the merchandise in person (no paper trail proving it's to be exported), they would need a resale certificate for that state. That state should have a Web site explaining such things.

 

I've ordered from the company before. Just to sell on craigslist for a little profit. I like doing business with them, they include all taxes, duty, vat, brokerage to the total price. UPS never charges me at the door.

The retailer sent me a form for a California one. I sent them a message saying I'm from Canada so I may not need one. I just want to be on the safe side.

 

Whether or not you can get the merchandise in the US without paying sales tax, you may need to pay customs duties at the border. Be sure to figure out ahead of time what's involved for fees and paperwork, especially if you will be carrying it across the border yourself!

 

Like I mentioned above, the seller includes all duty, taxes, brokerage fees the total. Including GST and PST, this is why I'm wondering if I have to still charge my customers if I pay it.

 

One last thought: you mentioned buying from a retailer. This may put you legally in the "gray market", as an unauthorized dealer. Brand names often don't like being sold through such channels, and your merchandise may be seized at the border (in either direction) on suspicion of trademark fraud or some other reason. Whether the reason is valid or not, you may find it quite expensive.

 

Lets hope for the best. If I drop ship the stuff, I'll probably be safe.

[MrPhil]

Like I mentioned above, the seller includes all duty, taxes, brokerage fees the total. Including GST and PST, this is why I'm wondering if I have to still charge my customers if I pay it.

Well, if someone has paid all applicable provincial and federal taxes (what a customer would pay to purchase it), you'd think that you could just fold that into your price and not charge the customer any tax, wouldn't you? However, since you're paying wholesale, and presumably the tax is based on the wholesale amount, I suspect that you'll be required to charge tax based on the retail price. If you are registered as a business, I would think that you could avoid paying GST and PST (but would still have to collect it from your customers and remit to the tax authorities). If your supplier will not or can not treat you as a retailer and avoid charging you GST and PST, you may have to find another supplier, or eat the extra tax. In any case, you certainly need to talk with your provincial tax people. They may be able to tell you what's needed to avoid paying sales taxes on a wholesale transaction, and what paperwork you'll need to present to your supplier. Note that I'm assuming that GST and PST are plain old end-purchaser sales taxes, and not some kind of VAT. Being in the US, I'm not familiar with Canadian practices. It might be worth asking if it's possible to only charge GST and PST on the difference between wholesale (tax already paid) and retail prices, although I wouldn't get my hopes up. You might also discuss with your supplier what paperwork would be needed so that they don't have to charge you GST and PST (as a wholesale transaction instead of retail).

 

Ain't running a business complicated, eh?

[Guest]

Alright,

 

So I contacted a retailer, and they are willing to sell to me at wholesale prices if I have a resale certificate. How do I get one of these? I've searched the internet and can only find them for the U.S.

Since I'm buying from the U.S will I need one for Canada, or the U.S.

 

The U.S retailer collects taxes already, so will I have to still charge my customers taxes when I sell it again?

 

If I purchase items from a retailer in Canada, and they charge me GST and PST, will I still have to charge taxes?

 

Do I have to pay U.S taxes? (The retailer does not charge me U.S taxes)

 

Do I have to register my business? Get a tax number? Vendor permit? For both the U.S, or just Canada?

I'm young, 19, am I old enough to open my business?

 

Any other information you think I should know please tell me!

 

Thanks.

 

 

Hi, You register your business with Revenue Canada here http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/bro-ide/menu-eng.html making sure to fill out the area stating you will be importing into Canada.

 

You will receive your business license in the mail. Once you have it, you will need to hire a customs broker to clear your shipments into Canada from your US supplier. When you have that completed, you can order from your US supplier making sure you have them ship with a commercial invoice and the name of your customs broker on the BOL.

 

Your US supplier DOES NOT COLLECT TAXES FROM YOU. EVER ! You do NOT need a US Business License.

 

You will pay GST (soon to be HST)on the Canadian Value of the goods when they hit the Canadian Customs Warehouse. Your order will be cleared by your customs broker and you will receive your goods. When you sell your goods online, you will need to collect the taxes for your local area and the rest of Canada once the HST takes effect on July 1, 2010.

 

You must also collect taxes on your shipping costs as well as required by Revenue Canada.

 

Hope this bit of information helps, you will also find more information on the link I provided above.

 

 

Chris