Compliance Resources
Cross-Border E-Commerce
Cross-Border E-Commerce
US & Canada Sales Tax Playbook
A practical guide to US Wayfair economic nexus and the Canada GST/HST/PST framework β the compliance roadmap for Amazon FBA, Shopify, and cross-border sellers.
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PART 01 Β· CANADA
Canada Sales Tax
Why Cross-Border Sellers Must Understand Canadian Sales Tax
Many ecommerce sellers assume Amazon handles everything. In reality, Canada's sales tax system is a dual federal + provincial architecture with widely varying rules by province. Sellers may trigger registration obligations due to inventory storage, sales thresholds, or sales through their own website β even if they only sell through marketplace platforms.
β
Registration Risk
Exceeding CAD $30,000 without GST/HST registration results in penalties, interest, and loss of Input Tax Credits
β
Provincial Complexity
BC, SK, MB have separate PST/RST rules with non-resident thresholds as low as $10,000 or even $0
β
Compliance Upside
Proper registration allows Input Tax Credit (ITC) deductions, improving cash flow and reducing audit risk
KEY TOPICS
- 01 Five Tax Types β Federal GST 5% Β· HST 13β15% Β· Provincial PST/RST Β· Quebec QST Β· Manitoba RST
- 02 MPF Collection β Since 2021, Amazon.ca auto-collects in all provinces, but seller registration obligations remain
- 03 Thresholds β GST/HST small supplier exemption is CAD $30,000; non-resident sellers face separate registration rules
Four Key Sales Tax Types in Canada
5%
GST
Goods & Services Tax
Administered by CRA; applies to provinces and territories not in the HST system
13β15%
HST
Harmonized Sales Tax
GST and provincial tax combined; applies to Ontario, New Brunswick, Nova Scotia, PEI, and Newfoundland
9.975%
QST
Quebec Sales Tax
Collected by Revenu QuΓ©bec; calculated in parallel with GST; applies only to Quebec
6β7%
PST / RST
Provincial / Retail Sales Tax
BC (7%), SK (6%), MB (7%) separately levied; rules are entirely independent of GST/HST
Canada Provincial Sales Tax Rate Table (2026)
| Province / Territory | Tax Type | GST | Provincial | Total | Amazon Collects |
|---|---|---|---|---|---|
| Ontario ON | HST | β | β | 13% | β Yes |
| Quebec QC | GST+QST | 5% | 9.975% | 14.975% | β Yes |
| British Columbia BC | GST+PST | 5% | 7% | 12% | β Yes |
| Alberta AB | GST | 5% | β | 5% | β Yes |
| Manitoba MB | GST+RST | 5% | 7% | 12% | β Yes |
| Saskatchewan SK | GST+PST | 5% | 6% | 11% | β Yes |
| New Brunswick NB | HST | β | β | 15% | β Yes |
| Nova Scotia NS | HST | β | β | 14% | β Yes |
| Prince Edward Island PE | HST | β | β | 15% | β Yes |
| Newfoundland & Labrador NL | HST | β | β | 15% | β Yes |
| Yukon / NWT / Nunavut | GST | 5% | β | 5% | β Yes |
β οΈ Amazon collects tax as an MPF, but sellers must still confirm their registration status and file periodic returns.
Non-Resident Registration Thresholds
Federal GST/HST
CAD $30,000
Sales exceeding this threshold over four consecutive quarters require registration within 29 days.
Quebec QST
CAD $30,000
Sales to Quebec consumers exceeding this threshold in 12 months require registration in the simplified QST system.
BC PST (7%)
CAD $10,000
Annual sales to BC consumers exceeding this threshold require immediate registration (Amazon collects since 2022).
Saskatchewan SK PST (6%)
$0 (No threshold)
Any sale to SK consumers triggers registration for non-residents. Marketplace sales are collected by Amazon.
Manitoba MB RST (7%)
CAD $30,000
Amazon collects for marketplace sales; direct/own-site sales require registration from the first transaction.
Registration Decision Flow
You sell on Amazon Canada
β
Annual sales > CAD $30,000?
Yes
Must register for GST / HST
β
Selling to QC / BC / SK / MB?
Yes
May also need to register for QST / PST / RST
If annual sales β€ $30,000:
No
You may voluntarily register to claim Input Tax Credits (ITCs) and recover GST/HST paid on business purchases.
Canada 5-Step Compliance Roadmap
01
Assess Obligations
Analyze where you sell, where inventory is stored, and sales volumes to determine required registrations
02
Register
Apply with CRA, Revenu QuΓ©bec, and relevant provincial tax authorities for your tax numbers
03
Enable Collection
Enable Tax Calculation Service (TCS) in Seller Central for each registered province
04
File & Remit
File monthly, quarterly, or annually; remit tax collected or claim refunds on schedule
05
Retain Records
Keep sales records, input tax receipts, and shipping invoices for at least 6 years for audit readiness
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PART 02 Β· UNITED STATES
US Sales Tax
Post-Wayfair Β· Economic Nexus in 45 States
Following the 2018 South Dakota v. Wayfair Supreme Court decision, all 45 sales-tax states adopted economic nexus rules β meaning remote sellers must collect and remit sales tax once sales thresholds are crossed, even without physical presence. Amazon FBA inventory creates immediate physical nexus; Shopify independent stores are entirely the seller's responsibility.
Three Key Concepts
NEXUS
Taxable connection β physical (warehouse/employees) or economic (sales volume)
WAYFAIR THRESHOLDS
Most states: $100K; CA/TX/NY: $500K; AL/MS: $250K
MPF β MARKETPLACE FACILITATOR
Amazon auto-collects in all sales-tax states; Shopify does not qualify
SALES TAX PERMIT
Required in each nexus state before collecting tax and filing returns
Key State Thresholds (2026)
| State | Sales Threshold | State Rate | Amazon | Notes |
|---|---|---|---|---|
| California CA | $500,000 | 7.25% | β | Local tax up to 10% |
| Texas TX | $500,000 | 6.25% | β | Separate Permit required |
| New York NY | $500K & 100 transactions | 4.0% | β | State+city can reach 8.875% |
| Florida FL | $100,000 | 6.0% | β | FBA warehouse = physical nexus |
| Washington WA | $100,000 | 6.5% | β | Also has B&O business tax |
| Illinois IL | $100,000 | 6.25% | β | Combined rate can reach 11% |
| Pennsylvania PA | $100,000 | 6.0% | β | Common FBA warehouse state |
| Alabama AL | $250,000 | 4.0% | β | Higher threshold state |
| Most Other States | $100,000 | 4β7% | β | DE/MT/NH/OR: no sales tax |
Sources: Avalara / Tax Foundation (updated April 2026) Β· Verify with each state's official website
Amazon vs. Shopify β Sales Tax Mechanics Compared
Amazon Β· Platform Collection
- Amazon auto-collects and remits sales tax in all sales-tax states as an MPF
- FBA distributes inventory to multiple state warehouses β creating physical nexus even at low sales volumes
- Platform collection β state income tax filing; you must still assess state income/franchise tax obligations
- Sales of $5,000+ generate a 1099-K that state tax agencies cross-reference
Shopify Β· Seller's Responsibility
- Shopify independent stores are NOT Marketplace Facilitators β full tax obligation rests with the seller
- Since 2025, orders via the Shop App are collected by Shopify; orders via your own domain remain your responsibility
- Enable tax rates state-by-state in Settings β Taxes and enter each Permit number
- File monthly/quarterly even with zero sales β zero-dollar filings are required in most states
All-State Economic Nexus Thresholds (2026)
All 50 states' economic nexus thresholds Β· Source: Avalara / Tax Foundation (2026)
| State | Abbr. | Effective Date | Sales Threshold | Transaction Count | Marketplace | Reporting |
|---|---|---|---|---|---|---|
| Alabama | AL | 10/1/2018 | 250000 | na | Excluded | |
| Alaska | AK | 100000 | Included | |||
| Arizona | AZ | 2019-10-01 | 100000 | Excluded | ||
| Arkansas | AR | 2019-07-01 | 100000 | 200 | Excluded | |
| California | CA | 2019-04-01 | 500000 | Included | ||
| Colorado | CO | 2019-04-14 | 100000 | Excluded | ||
| Connecticut | CT | 12/1/2018 | 100000 | 200 | Included | |
| D.C. | DC | 2019-01-01 | 100000 | 200 | Included | |
| Florida | FL | 2021-07-01 | 100000 | Excluded | ||
| Georgia | GA | 2020-01-01 | 100000 | 200 | Excluded | |
| Hawaii | HI | 7/1/2018 | 100000 | 200 | Included | |
| Idaho | ID | 2019-06-01 | 100000 | Included | ||
| Illinois | IL | 10/1/2018 | 100000 | 200 | Excluded | |
| Indiana | IN | 10/1/2018 | 100000 | Excluded | ||
| Iowa | IA | 1/1/2019 | 100000 | Included | ||
| Kansas | KS | 2021-07-01 | 100000 | Included | ||
| Kentucky | KY | 10/1/2018 | 100000 | 200 | Included | |
| Louisiana | LA | 2020-07-01 | 100000 | Excluded | ||
| Maine | ME | 7/1/2018 | 100000 | Excluded | ||
| Maryland | MD | 10/1/2018Β | 100000 | 200 | Included | |
| Massachusetts | MA | 2019-10-01 | 100000 | Excluded | ||
| Michigan | MI | 10/1/2018 | 100000 | 200 | Included | |
| Minnesota | MN | 2019-10-01 | 100000 | 200 | Included | |
| Mississippi | MS | 9/1/2018 | 250000 | Excluded | ||
| Missouri | MO | 2023-01-01 | 100000 | Included | ||
| Nebraska | NE | 2019-04-01 | 100000 | 200 | Included | |
| Nevada | NV | 2018-11-01 | 100000 | 200 | Included | |
| New Jersey | NJ | 2018-11-01 | 100000 | 200 | Included | |
| New Mexico | NM | 2019-07-01 | 100000 | Excluded | ||
| New York | NY | 2018-06-24 | 500000 | 100 | Included | |
| North Carolina | NC | 11/1/2018 | 100000 | Included | ||
| North Dakota | ND | 10/1/2018 | 100000 | Excluded | ||
| Ohio | OH | 2019-08-01 | 100000 | 200 | Included | |
| Oklahoma | OK | 2019-11-01 | 100000 | Excluded | ||
| Pennsylvania | PA | 2019-07-01 | 100000 | Included | 10000 | |
| Rhode Island | RI | 8/17/2017 | 100000 | 200 | Included | |
| South Carolina | SC | 11/01/2018 | 100000 | Included | ||
| South Dakota | SD | 11/1/2018 | 100000 | Included | ||
| Tennessee | TN | 2019-10-01 | 100000 | Excluded | ||
| Texas | TX | 2019-10-01 | 500000 | Included | ||
| Utah | UT | 1/1/2019 | 100000 | Excluded | ||
| Vermont | VT | 7/1/2018 | 100000 | 200 | Included | |
| Virginia | VA | 2019-07-01 | 100000 | 200 | Excluded | |
| Washington | WA | 2019-03-14 | 100000 | Included | 10000 | |
| West Virginia | WV | 2019-01-01 | 100000 | 200 | Included | |
| Wisconsin | WI | 10/1/2018 | 100000 | Included | ||
| Wyoming | WY | 2019-02-01 | 100000 | Excluded | ||
| Note 1: Reporting requirement: Generally speaking, if a seller does not collect sales/use taxes, there is a reporting requirment for the seller to report name of customer, address, order date and amount etc. | ||||||
| Other than economic nexus, sellers or other businesses with inventories, sales person, servers to receive orders or other factors which may create sales/use tax nexus in a state should consult a professional accountant or tax adviser to ensure sales/use tax compliance. For most states, keeping inventories in a warehouse in a state creates sales/tax nexus. Therefore, FBA sellers likely have sales/use tax nexus in any FBA state where they have inventories. |
πΊοΈ Interactive US Sales Tax Maps
US Economic Nexus Threshold Map
Displays threshold type by state β sales-only / sales or transactions / no state sales tax. Hover to see details.
Sales threshold only
Sales or transactions
No state sales tax
Do Exempt Sales Count Toward Nexus? (By State)
Shows whether each state counts exempt sales toward the economic nexus threshold β a key compliance distinction.
Includes exempt sales
Taxable only
No economic nexus
Combined State & Average Local Sales Tax Rate Map
Visual overview of each state's total tax burden β combined state-level and average local sales tax rates.
US 5-Step Compliance Roadmap
01
Nexus Diagnosis
Map FBA states, employees, and sales volumes to identify required registrations
02
Obtain Permits
Apply for Sales Tax Permits in each trigger state; EIN/ITIN replaces SSN
03
Enable Tax Rates
Register MPF states in Amazon; enable Shopify Tax Engine per state
04
File & Remit
Monthly/quarterly/annual returns; zero-sales returns required to keep Permits active
05
Retain Records
Keep sales records and exemption certificates 3β7 years for audit readiness
PART 03 Β· FAQ
Frequently Asked Questions
πΊπΈ US Sales Tax
Nexus is the taxable connection between a business and a state β either physical (warehouse, employees, office) or economic (sales volume crossing a threshold). Once established, the state requires you to register, collect, and remit sales tax.
Yes. FBA inventory placement creates physical nexus immediately, regardless of your sales volume in that state. Amazon distributes inventory across multiple states, so most FBA sellers have physical nexus in several states simultaneously.
Yes. Amazon's MPF collection does not remove your obligation to obtain a Sales Tax Permit and file periodic returns in nexus states. Many states require filing even when Amazon remits the tax and your balance due is zero.
Yes. Shopify independent stores are not Marketplace Facilitators. You are responsible for collecting, filing, and remitting sales tax in every state where you have nexus. Enable Shopify's Tax Engine state-by-state and enter each Permit number.
Many states assess penalties of 5% per month, up to 25%, plus interest β and some audit back 7 years. A Voluntary Disclosure Agreement (VDA) filed proactively can dramatically reduce or eliminate penalties. Acting early is always cheaper than waiting to be discovered.
Yes, in most states. Zero-dollar returns are required to keep your Sales Tax Permit active. Skipping a filing β even with no sales β can result in penalties or permit cancellation.
π¨π¦ Canada Sales Tax
Yes, once taxable Canadian sales exceed CAD $30,000 over four consecutive quarters, registration with CRA is required within 29 days. FBA inventory in Canadian warehouses may trigger the obligation even sooner.
GST (5%) is the federal tax applied everywhere; HST combines GST and provincial tax (Ontario: 13%); QST (9.975%) is Quebec's provincial tax administered by Revenu QuΓ©bec; PST/RST (BC 7%, SK 6%, MB 7%) are separate provincial retail taxes with rules entirely independent of GST/HST.
Yes. Amazon.ca's MPF collection does not eliminate your registration obligation. Failing to register when you've exceeded the threshold results in penalties and loss of Input Tax Credit (ITC) deductions β costing you more than the registration would have.
Generally no β but a corporate tax return is still required. Filing Schedule 91 with CRA demonstrates no Permanent Establishment (PE) in Canada, allowing the business to claim treaty protection from income tax. If a PE exists (e.g., a warehouse or employee), income tax may apply.
Yes. QST is entirely separate from GST/HST and must be registered with Revenu QuΓ©bec independently. Non-resident sellers with sales to Quebec consumers exceeding CAD $30,000 in the past 12 months must register for the simplified QST account.
No. An Annual Report/Return is filed with the corporate registry to maintain the company's legal standing. A tax return is filed with CRA or the provincial tax authority. Both are separate compliance obligations with different deadlines and filing bodies.
Disclaimer: This content is updated as of 2026 and is for general informational purposes only. It does not constitute professional tax, legal, or accounting advice. Please consult a licensed professional for guidance specific to your situation.
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