Pool and spa contractor cross-border tax: the US is your supplier, not your market

Your supply chain crosses the border every week

Pumps, filters, heaters, salt chlorinators and automation from Hayward, Pentair and Jandy, vinyl liners, hot tubs from US manufacturers, and a large share of the chemical supply are either made in the US or priced in US dollars, so the cross-border side of a pool business shows up as imports, USD invoices and dealer programs rather than US sales. Not everything is imported — Hydropool builds hot tubs and swim spas in Mississauga, and Arctic Spas builds in Alberta — but an Ontario pool company that never touches a US supplier is rare. We treat the border as part of the bookkeeping rather than a special event.

Importing equipment and chemicals: the paperwork behind the ITC

Commercial imports require an importer-exporter (RM) account under your business number, and since October 2024 the CBSA's CARM system requires importers to register in the CARM Client Portal and post their own financial security rather than relying on the broker's. Miss that step and a customs broker can decline to release a shipment. At the border, 5 percent GST is charged on the value for duty of commercial goods; the Ontario portion of HST is not collected on goods imported for use in your commercial activities, and the GST paid is an input tax credit on your next return — provided the customs accounting document is in the file. A courier invoice with a lump-sum duties-and-taxes line is not enough on its own.

Duty depends on the tariff classification and the origin of the goods, not on where the brand is headquartered. A pump built in Asia and shipped from a US warehouse and a pump built in the US carry different treatment, and the CUSMA preferential rate is available only when the supplier provides a certification of origin. Canada's surtax lists on US goods have been imposed, amended and rolled back more than once since 2025, so we check the schedule in force on the date of import rather than assume anything from the prior season.

USD invoices, dealer money and the books

Early-buy orders placed in November and paid in April are often priced in USD, which means the cost that lands in inventory and the amount that leaves the bank can differ materially. We record each USD purchase at the exchange rate on the invoice date and book the difference at payment as a foreign exchange gain or loss, so the retail margin reflects the product cost and not the currency move. A USD bank account for supplier payments simplifies this, and our answer on recording USD transactions in Canadian books walks through the mechanics.

Money coming the other way — manufacturer dealer rebates, co-op advertising funds and warranty labour reimbursements from a US manufacturer — is Canadian business income earned for work done in Canada. There is no US withholding on it, though a US payer may ask for a W-8BEN-E to document that you are a foreign company, and we book it as a reduction of cost or as other income depending on the program's terms.

US franchise systems: the one place withholding appears

If you sign with a US-based pool-service franchisor, royalties and brand-fund contributions paid to it make you a withholding agent. Royalties paid to a non-resident are subject to 25 percent Part XIII withholding, reduced to 10 percent under the Canada-US treaty for franchise royalties once the franchisor has provided a W-8BEN-E supporting its treaty claim; the withheld amounts are remitted to the CRA monthly and reported on NR4 slips by the end of March. Franchise agreements drafted in the US often contain a gross-up clause that makes the franchisee bear the withholding, which changes the real royalty rate. We quantify that before signing rather than after the first remittance is missed.

The owner's winter: snowbird rules for a seasonal business

A business that shuts down in November makes a Florida or Arizona winter possible, and many pool company owners take it. The US counts days under the substantial presence test, a three-year weighted formula that can be met by someone who never spends more than about four months a year in the US. A Canadian who meets the count but keeps a closer connection to Canada files Form 8840 by June 15 to stay outside US resident taxation; skip it and the default is a US resident return on worldwide income. Our answer on when a snowbird should file Form 8840 and our snowbird tax rules guide cover the day counts, provincial health-coverage minimums and the US property questions that follow. Running the off-season from a laptop in Florida — quoting, ordering, planning — does not by itself give the corporation a US permanent establishment, but a US home office where employees work or contracts are habitually concluded is a different fact pattern, and we review it before the arrangement becomes routine.

If an owner is a US citizen or green-card holder, the corporation itself becomes a US reporting item — Form 5471 and the GILTI regime apply to a US person's Canadian company — and that is where this page hands off to our dual-citizen tax guide. The occasional job for a US customer, a pool for a family friend in Buffalo, is US-source income; a single residential build does not create a treaty permanent establishment, but it raises state contractor licensing and state sales-tax questions the treaty does not switch off, so we look at the state before the contract is signed. Our pool contractor bookkeeping page covers the landed-cost and inventory records that make all of the above routine.

Source: CBSA — CARM: CBSA Assessment and Revenue Management.