Configuring Taxes for Canadian Sites/Zones

[newagekat]

newagekat, thanks for that updated set of instructions. It worked a treat. Well done. :)

Vito

You're Welcome, Vito. It was my very first tutorial to ZC so it pleases me to no end that it was clear and concise. Of course, if they decide to remove the HST, we'll have to revisit this tutorial.

I'm trying to build some Karma points, so if you found the post handy, add some positive energy.

Happy Zenning, everyone.

[highlander]

I hope this is in the right area, I apologize if it is not. A general question for us Canadians...

in a situation where your province has an HST in place, and you've configured the taxes accordingly, how do you deal with customers that you have that were previously PST exempt? Do they now get a partial exmption on the provincial portion of the HST? How do you set this up so those customers don't get charged the provincial portion of the HST (only the GST)?

[s_mack]

it doesn't work like that... you charge them the HST just like you would have charged them GST before. To be clear... say it was BC. You previously charged them 5% GST but did not charge them the 7% PST. Now you DO charge them the full 12%HST because the WHOLE thing is a federal tax.

[newagekat]

I hope this is in the right area, I apologize if it is not. A general question for us Canadians...

in a situation where your province has an HST in place, and you've configured the taxes accordingly, how do you deal with customers that you have that were previously PST exempt? Do they now get a partial exmption on the provincial portion of the HST? How do you set this up so those customers don't get charged the provincial portion of the HST (only the GST)?

What a lot of retailers are doing is charging the full amount and leaving the client to file for a refund of the PST portion. You can assist them by providing a link to the form and the gov't page thAt relates to it. Have a look at http://cra.gc.ca

[s_mack]

I don't think that's the correct way to look at it either. For (most) all intents and purposes, there is no "BC portion". Of course there could be some exceptions in some particular industries/products, but for the most part - if you're selling "stuff" like 99% of the stores out there, then there IS NO PST and no "provincial part" of the tax. The only tax is the HST. You collect the full HST from everyone.

Who would be "exempt" anyway? Are you selling to a business that previously did not pay PST? They do now pay the full HST and they get the full HST back on their return (this is actually the whole point of switching to HST). Are they of native status? Well, i don't think that applies since they have to show you their status card and I don't know how they can do that over the net... but in any case, they're exempt fully and not just from a portion. Is it children's clothing in BC or something similar to that? OK in that case I don't know. I don't know how that would work online since in retail you have to sign something. In that case, I imagine newagekat is correct and you leave it to the customer to make a claim if they have such a claim.

More details on what or you are assuming would be "exempt" would allow for more research and a better answer.

- Steven

[highlander]

If you haven't selected one yet, I'd recommend CANADA POST.

Hello, i'm hoping someone could help me choose the appropriate shipping method module ... i'm residing in windsor ontario and am just looking to ship within Ontario probably toronto the furthest as of now ... to start off as most of my business is locally and as i expand i'd like to offer further shipping. Any help or direction would be great ! :)

[highlander]

My bad...I meant to say GST ( but the native issue still applies now that I think about it when using online credit card processing and/or a virtual terminal). Mistakes happen when you're red-eyed and tired.

For instance, when selling to DND. They are GST exempt. In the past, they would tell me their exemption number and I would not have to charge the GST.

Small business with razor-thin mark-ups. Every little bit helps.

I don't think that's the correct way to look at it either. For (most) all intents and purposes, there is no "BC portion". Of course there could be some exceptions in some particular industries/products, but for the most part - if you're selling "stuff" like 99% of the stores out there, then there IS NO PST and no "provincial part" of the tax. The only tax is the HST. You collect the full HST from everyone.

Who would be "exempt" anyway? Are you selling to a business that previously did not pay PST? They do now pay the full HST and they get the full HST back on their return (this is actually the whole point of switching to HST). Are they of native status? Well, i don't think that applies since they have to show you their status card and I don't know how they can do that over the net... but in any case, they're exempt fully and not just from a portion. Is it children's clothing in BC or something similar to that? OK in that case I don't know. I don't know how that would work online since in retail you have to sign something. In that case, I imagine newagekat is correct and you leave it to the customer to make a claim if they have such a claim.

More details on what or you are assuming would be "exempt" would allow for more research and a better answer.

- Steven

[skookumnarrows]

I am gone through the postings on page 25 & 26 and I have set up my taxes in Zen Cart using the Aug 10th, 2010 posting by 'newagekat' (thanks for the updated info!). This is in preparation for registering with the federal government.

Now, I admit I really don't have a good grasp of what I have just done - and because of that I am not sure the steps I need to take to accomplish the following...

For now, I don't want to charge any taxes on the products (selling Canada-wide) but I do want to collect shipping taxes since I have to pay HST on postage here in Ontario. Would it be possible for someone to explain how I can accomplish this?

TIA
a.h.

[s_mack]

You're going to get yourself into trouble if you start playing the "collect on some but not on others" games. If you're collecting tax then collect tax. If you're not, then don't. I can't see any way at all that you can collect just on shipping and not on your products.

IF you are operating as a business, then you collect tax for your goods and shipping and you pay tax on your inputs and shipping. How it washes out at tax time depends on if you spent more or sold more.

IF you are NOT operating as a business of any consequence (and that's OK - I think there's a $30,000 threshold where you don't have to register/collect) then you do NOT have to collect NOR remit taxes, but you still pay on everything. That's your choice as a very small business.

But its all or nothing and you can't pick and choose. If you are choosing to absorb the taxes then you must absorb all the taxes, including on your shipping costs and you can NOT collect taxes to recover that unless you register with the gov't for a tax ID. Once registered, you MUST charge and collect taxes on all applicable goods and services (your stuff plus shipping) and you MUST remit that at the end of the year/quarter/etc.

[skookumnarrows]

Thanks for replying, s_mack.

I have just moved from BC and when I ran my internet business there I only collected the PST from my BC customers - I did not register for the GST because I was under the threshold. I had the cart set up to collect PST from my BC addresses only. The cart has always used the Canada Post shipping module. However, I am not even sure tax was collected on the postage unless it was included in the quote from CP.

Now that I have moved to Ontario I am debating whether to wind the biz down or register and then have to collect all the taxes. In the meantime, I have removed the tax class from the products but I am being dinged the HST at the post office which is why I was wondering if it is possible to set the cart to collect the HST on shipping. It just seems lately the shipping price coming back from CP has been underestimating the actual cost and it looks like it is short on the taxes. I was only hoping to set the cart so that it was reflecting the actual cost of shipping. I suppose I could increase the "handling" costs within my biz CP profile to cover this shortfall - which might be the way to go.

Thanks for you help.
a.h.