Sales Tax for Crystal Sellers in Canada: GST/HST, PST and QST

Sales tax for crystal sellers in Canada comes down to three questions. When must you register for GST/HST? What do you charge, and where? And how do you keep the money safe until you remit it? None of it is complicated, but neglect compounds. This guide covers the shape of each decision so you know what to ask.

It follows the tax chapters of Arthur Narin's book How to Start a Crystal Business. It is a practical overview, not tax advice. Thresholds, rates and forms are set by governments and they change, so confirm the current rules in the CRA's guidance on canada.ca and with your provincial revenue agency. Before you register, an hour with an accountant is cheap insurance.

Sales tax is not your money

GST, HST, PST and QST are amounts you collect on the government's behalf and hold for a while. In your books they are a liability, not revenue. Income tax is different: it is your money, taxed, calculated on your profit after expenses.

One of the most common crises in a small product business starts right here. A seller counts collected sales tax as sales, spends it on new stock, and cannot remit when the return is due. The fix is simple and it comes later in this guide: a separate Tax Hold account.

When crystal sellers in Canada must register for GST/HST

While you are small, you are a "small supplier" and GST/HST registration is optional. You stay a small supplier while your worldwide taxable supplies, including those of any associates, stay at or under thirty thousand dollars. That limit applies in a single calendar quarter and over the last four consecutive calendar quarters. The two tests work differently.

• Over the limit in a single quarter: you stop being a small supplier immediately. The sale that takes you over is itself taxable, so you charge GST/HST on it, and you must register within 29 days of that sale.
• Over the limit across four quarters, without crossing it in any one quarter: you stop being a small supplier at the end of the month after the quarter in which you went over, and you register from then.

The CRA states this timing precisely, so read its current guidance rather than relying on a summary. In both Canada and the US, penalties and interest generally run from when you should have registered, not from when you noticed. Register before you cross the line, not after.

Should you register voluntarily?

For a business that buys stock, voluntary registration below the threshold is often worth a conversation. As a registrant you can claim input tax credits for the GST/HST you pay on business purchases. That includes the GST paid on imports at the border.

This changes your pricing maths. For a registrant, recoverable GST/HST is not part of the landed cost of a stone, while duty is. Our guide to crystal landed cost shows where each line belongs.

The trade-off is that you must charge GST/HST to your customers and file returns on the schedule the CRA assigns you. In one worked example, a market seller called Maya registers early for this reason. Almost all of her early spending is taxable purchases from registered Canadian businesses: her stock order and its shipping, packaging, a card reader, signage and booth fees. Claiming back that tax means it is not a cost to her. Her accountant agreed it suited a business that spends heavily before it sells. Yours might reach a different answer.

What rate to charge, and the provinces with their own tax

Once registered, the rate you charge depends on where the goods are delivered, not where you are. A parcel shipped from Ontario to Nova Scotia carries the HST rate of the destination province. A correctly set-up selling platform can usually calculate this for you, so check that setting before your first out-of-province order.

Four provinces add their own layer. British Columbia, Saskatchewan and Manitoba charge a separate PST, and Québec charges the QST. Each has its own registration rules for businesses inside the province and, in some cases, for sellers outside it who ship in. GST/HST registration does not cover any of them, so check each province you sell into.

Event sales count too. Some jurisdictions ask for a temporary permit or vendor licence to sell at a market, so ask the organiser when you book. Our guide on whether you need a licence to sell crystals in Canada covers the rest of the paperwork.

The Tax Hold account

Open a second business account or sub-account and call it Tax Hold. Every week, on a fixed day, move two separate amounts into it:

1. The sales tax you collected the week before, read straight off your sales reports.
2. Your income-tax reserve.

Use it for nothing else. Tax Hold never funds a stock order. Set the income-tax reserve with your accountant from your actual profit, not as a flat percentage of revenue from a blog. Two businesses with the same sales can have very different profits. Revisit the reserve once you have a few months of real numbers.

This only works if business money lives in a business account. Point every payout at it, pay every supplier from it, and stop using your personal card for the business.

Books that keep the tax honest

A deposit is not revenue. One processor payout can bundle product sales, shipping charged, sales tax collected, refunds and fees. Record it as "sales" and your tax is buried and your margin is fiction. Split each payout into its parts from the payout report. The parts should add up to the deposit, and the deposit should match your bank.

Inventory is an asset until it sells. The stones on your shelf are generally an asset, and their cost becomes cost of goods sold when they sell. That is why you can show a profit while your bank account is tight. Count and value inventory at year end at landed cost, not supplier cost.

Keep sales tax by jurisdiction from day one, whether you use a spreadsheet, accounting software or a bookkeeper. Move to software when the monthly reconciliation takes more than about an hour, or when you start importing.

Keep records long enough. CRA business records are generally kept for six years from the end of the tax year they relate to. CBSA import records are generally kept for six years too. Keep commercial invoices, customs entries and broker invoices in their own folder, because they prove your landed cost. Keep them even when a broker handled the entry.

A short checklist

• Write down your registration test and the figure that triggers it, or decide with your accountant to register now.
• List the provinces you ship to and check whether any PST or QST applies.
• Open Tax Hold and set a weekly transfer day.
• Split one payout into its parts and check it adds up to the deposit.
• Book a conversation with your accountant to set the income-tax reserve from your own numbers.

When the paperwork is in place, plan your first order. Stonebridge offers wholesale crystals in Canada with no minimum order. Start with tumbled stones or ready-made crystal kits, and see the full path in our guide on how to start a crystal business.

Frequently asked questions

Do I have to charge GST/HST if I am a small supplier?

No. While you are a small supplier, registration is optional and an unregistered seller does not charge GST/HST. Once you pass the small supplier limit you must register and start charging. Check the CRA's current guidance for the exact timing.

How do I get registered for HST?

You register for GST/HST with the Canada Revenue Agency, using a Business Number, which is free. It is one registration for GST/HST. PST in British Columbia, Saskatchewan and Manitoba, and QST in Quebec, are separate registrations with their own rules.

Can I claim back the GST I pay on imported crystals?

If you are registered for GST/HST, you can generally claim input tax credits for the GST/HST paid on business purchases, including the GST paid on imports at the border. Duty is not recoverable that way and stays in your landed cost.

Which province's rate do I charge when I ship a crystal order?

Once you are registered, the rate depends on where the goods are delivered, not where you are. An order shipped from Ontario to Nova Scotia carries the Nova Scotia HST rate. A correctly set-up selling platform can usually calculate this for you.

How long should I keep my sales tax records?

CRA business records are generally kept for six years from the end of the tax year they relate to, and CBSA import records generally for six years as well. Confirm the rule for your situation with your accountant.

Stock it for your shop

Stonebridge has no minimum order and ships from Kitchener, Ontario. Open a wholesale account or plan your opening order.