Answers · Topic 1 of 10
E-commerce, Creators and US Sales Tax answers.
Selling online and earning from platforms: GST/HST, US sales tax nexus, platform withholding and how marketplace income is taxed in Canada. 20 questions, each answered in the first paragraph.
By the AnalytIQ Accounting team · Last reviewed: September 6, 2026
Are book royalties taxable in Canada, and how are KDP royalties reported?Yes, book royalties are taxable income in Canada.Are brand deals and gifted products taxable income for Canadian influencers?Yes.Can I deduct a home office for my online business in Canada?Yes, if your home is your principal place of business, meaning you run the business from there or use the space regularly and exclusively to meet clients.Do Canadian Amazon FBA sellers owe US income tax?Usually not, at the federal level.Do Etsy sellers in Canada need to register for GST/HST?Yes, once your worldwide taxable sales, including zero-rated exports to the US and elsewhere, exceed $30,000 over any four consecutive calendar quarters, the small supplier threshold no longer protects you and registration becomes mandatory.Do I charge GST/HST on sales to US customers?Usually no.Do I need a business number to sell online in Canada?Not right away.Does Amazon collect US sales tax for Canadian FBA sellers?Yes.How do Canadian creators stop the 30% US withholding on YouTube, Twitch, or OnlyFans income?The default 30% rate applies to a non-US creator only when no tax information has been filed with the platform, so the fix is submitting a Form W-8BEN, or a W-8BEN-E if you have incorporated, in that platform’s tax centre and claiming the Canada-US treaty benefit.How do I record Amazon settlements and fees in QuickBooks?Post each Amazon settlement as a journal entry that separates gross sales, referral and FBA fees, advertising spend, refunds, and the reserve held back, rather than entering the single bank deposit as revenue.How do I record PayPal and Stripe fees and payouts for tax?Record the full amount a customer paid as revenue and the fee PayPal or Stripe deducted as a separate expense, rather than recording only the smaller net amount that actually lands in your bank account.How is dropshipping income taxed in Canada?Dropshipping income is taxed the same way any retail business income is: the full amount a customer pays you is revenue, and the amount your supplier charges you to fulfill that order is cost of goods sold, with the difference being your gross margin before other expenses.How is GST/HST charged on digital products and online courses?A digital product or online course is intangible personal property for GST/HST purposes, and the tax follows the customer, not the seller.How is OnlyFans income taxed in Canada?OnlyFans earnings are self-employment income for a Canadian creator, reported on Form T2125 as a sole proprietor or through a corporate T2 return once incorporated.How is Shopify store income taxed in Canada?Shopify store income is business income in Canada, reported on Form T2125 attached to your personal return if you operate as a sole proprietor, or on a corporate T2 return if you have incorporated.How is YouTube and AdSense income taxed in Canada?YouTube and AdSense income is business income for a Canadian creator, reported on Form T2125 as a sole proprietor or on a T2 return once incorporated, and it is fully taxable regardless of whether Google issues a slip.How should an e-commerce business account for inventory and cost of goods sold?Inventory is an asset on your books until the unit actually sells, and only at the point of sale does its cost move to the income statement as cost of goods sold.What is a marketplace facilitator law and does it cover Canadian sellers?A marketplace facilitator law is a US state law.What is a protective Form 1120-F and why do Canadian companies file one?A protective Form 1120-F is a US corporate income tax return that a foreign corporation files even though it believes the Canada-US tax treaty shields its profits from US tax, paired with a treaty-based disclosure on Form 8833.What is US economic nexus and when does a Canadian online seller cross it?US economic nexus is the rule that lets a state require an out-of-state seller to register for, collect and remit its sales tax once the seller's sales into that state pass a dollar threshold, even with no warehouse, staff or office there.
Where we do the work
Rules at a glance · E-commerce, Creators and US Sales Tax
Not sure which applies to you? Get a free proposal or book 15 minutes.
GST/HSTZero-rated exportsSales to US customers are zero-rated exports: charge 0% but still claim input tax credits on costs.
Threshold$30,000 worldwideWorldwide sales, including zero-rated US sales, past $30,000 in four quarters force registration.
Watch forUS economic nexusMost states expect a permit once sales into that state pass US$100,000 in a year.
Key formProtective 1120-FFBA sellers with no US permanent establishment still file a protective return to keep deductions.
What we take off your plate
Tax services for online sellers and creators, handled.
- GST/HST zero-rating and the $30,000 threshold tracked by platform
- US economic nexus checked state by state, not left to guesswork
- T2 and owner T1s filed together, deadlines tracked
- GST/HST returns and instalments handled
- CRA letters and reviews answered for you
- Salary-versus-dividend plan reviewed every year
Mistakes we fix
Three things that go wrong for online sellers and creators.
- Charging no GST/HST on a digital product sold to a Canadian customer because the sale is online
- Assuming Amazon collecting US sales tax removes the need to register once nexus is crossed
- Never filing a protective Form 1120-F and losing the right to deduct expenses if the IRS disagrees
Recognise one? Book a call and we will tell you what it is costing you.
How we can help · E-commerce, Creators and US Sales Tax
Where we do the work.
Fixed fees, quoted after a short discovery call. Canadian and US filings under one roof.
Tax servicesGST/HST on exports, digital products and marketplace sales sorted out platform by platform.Tax services →BookkeepingAmazon, Shopify, PayPal and Stripe settlements reconciled to what actually lands in the bank.Bookkeeping →Cross-border taxForm W-8BEN filed with every platform so the 30% US withholding drops to the treaty rate.Cross-border tax →
Free proposal
A fixed fee for your tax work, in writing.
- Tell us about your business. The form takes about a minute.
- A short discovery call. Fifteen minutes to confirm what you need.
- A fixed fee in writing. We reply within one business day. No hourly surprises.
- Canadian and US filings under one roof
- Cloud-first: QuickBooks Online, Dext, Wagepoint
- Brampton, Ontario, with clients across Canada and the US
Answers
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