Do I charge GST/HST on sales to US customers?

Goods shipped to a US address are zero-rated, as long as they actually leave Canada

Under the Excise Tax Act, an export of goods is a zero-rated supply. You charge GST/HST at a rate of 0%, which in practice means the invoice shows no tax, but the sale is still a taxable supply for every other purpose. The condition is that the goods are delivered or made available outside Canada, or shipped to a destination outside Canada, and that you can prove it.

Proof means documents, kept with your records for six years: the courier or postal shipping label, tracking history, the commercial invoice, and any customs declaration. The CRA does not ask to see them when you file, but an auditor reviewing zero-rated sales will, and a sale you cannot support is reassessed as if you had made it in Ontario at 13%.

The exception is a US customer who takes possession in Canada. If a buyer from Buffalo picks up an order at your Mississauga shop, the supply is made in Ontario and HST applies, subject to narrow rules that allow zero-rating when the buyer exports the goods promptly and gives you evidence. Selling at a Canadian craft fair or trade show to a visiting American is a taxable Canadian sale.

Services supplied to non-residents are generally zero-rated, but the exceptions turn on where the work lands

A service you supply to a non-resident of Canada is zero-rated in most cases: design work for a US agency, consulting for a US company, software development for a US startup, bookkeeping for a US client. Where the customer is a business, hold something that shows they are non-resident, such as a US address on the contract and payment from a US account.

The exceptions matter, and each one pulls the service back into Canadian tax:

• A service supplied to an individual who is in Canada while dealing with you about it. A US tourist getting a massage in Toronto pays HST.
• A service relating to real property in Canada, such as managing or renovating a Canadian building owned by an American.
• A service performed on goods located in Canada, such as repairing or storing a US customer's equipment here, unless the goods are exported straight after.
• Certain agency, telecommunication and transportation services, which follow their own rules.

Advisory, consulting and professional services to non-residents have a zero-rating provision of their own, which is why most remote knowledge work for US clients ends up at 0%.

Digital products and online subscriptions sold to US customers are zero-rated as well

E-books, templates, software licences, online courses and memberships are intangible personal property for GST/HST purposes. Supplied to a non-resident who is not registered for GST/HST, and not for use primarily in Canada, they are zero-rated. Your checkout can charge 0% to a US buyer and the correct provincial rate to a Canadian one based on the billing address the customer gives.

The reverse case is where Canadian creators get caught. A course sold to a buyer in Alberta carries 5% GST, one sold to a buyer in Ontario carries 13% HST, and platforms that do not collect on your behalf leave that to you once you are registered. We cover the domestic rules in how GST/HST is charged on digital products and online courses.

Zero-rated is not exempt: you still register, still claim credits, and still report the sales

This distinction is the single most valuable thing to understand on the topic. Zero-rated supplies are taxable at 0%, so they count toward the $30,000 small-supplier threshold, they entitle you to input tax credits, and they go on line 101 of your GST/HST return. Exempt supplies do none of those things. Our explainer on zero-rated versus exempt supplies goes deeper.

Three consequences follow for a business selling mostly to the US:

1. Once worldwide taxable sales, including your zero-rated exports, pass $30,000 over four consecutive calendar quarters, you must register, even if you would never charge a dollar of tax.
2. Because you collect nothing but pay HST on Canadian rent, software, freight and supplies, your returns will usually show a refund. That is normal for an exporter, and it is a reason to register voluntarily before you reach the threshold.
3. Your return must still show the zero-rated sales as total sales, in Canadian dollars, so keep your export sales converted at a consistent exchange rate.

Refund returns attract more CRA review than payment returns, which is one more reason to keep the export documentation tidy.

US sales tax is a separate system and is not replaced by zero-rating

Charging 0% GST/HST says nothing about whether a US state can require you to collect its sales tax. That depends on nexus: physical presence, such as inventory in a US warehouse, or economic nexus, commonly US$100,000 of sales into a state in a year. A Canadian seller can correctly zero-rate a sale for GST/HST and still owe Texas sales tax on the same order. Our US sales tax guide for Canadian e-commerce businesses and the e-commerce accounting hub cover that side, and the blog post on GST/HST for online sellers covers the domestic filing routine.

How we handle GST/HST for businesses selling to the US

We set up your invoicing or checkout so each sale is classified at the moment it happens, export, non-resident service or domestic taxable, with the supporting field captured, such as the ship-to country or the client's non-resident status. Your GST/HST return then reports zero-rated sales and input tax credits correctly without a year-end scramble, and we keep the export evidence in your cloud file so a refund review is answered from the records rather than from memory. Where US sales are growing, we add a nexus check to the same review.

Source: CRA — GST/HST for businesses.