Collecting and Reporting Sales Tax
Home-based businesses that are selling merchandise in a state or province that charges a sales tax will likely have to charge their customers the applicable sales tax, and remit it in turn to the state/provincial government. Your first step is to apply for a sales tax number in your state or province and then to set it up in your accounting records so that you keep track of the tax. Check how often you'll need to remit the sales tax. It will be at least annually and more often quarterly.
If you travel out of your state or province to consumer shows, you may be required to collect and pay sales tax on those sales to the host state or province. Check with the state department of revenue or provincial ministry of finance to find out if this applies to you.
In Canada, businesses with income of $30,000 in a tax year, or any quarter of a tax year, must register for the Goods and Services Sales Tax (GST) or Harmonized Sales Tax (HST). You'll charge the tax on your goods and services, subtract any tax you've been charged on business expenses, and remit the balance to the CRA. Call 1-800-959-5525 for registration/information.
