Who We Help · E-commerce · Etsy & Handmade
Etsy sellers: the platform handles less than you think.
Etsy really does collect US sales tax on every marketplace order — that part is handled. What it never touches: your Canadian income tax, your GST/HST once worldwide sales pass $30,000, the W-8BEN that stops US withholding, and the customs paperwork that now rides on every US-bound parcel. That\u2019s the half that lands on you.
By the AnalytIQ Accounting team · Last reviewed: August 12, 2026
At a glance · Etsy sellers
Not sure which applies to you? Get a free proposal or book 15 minutes.
What Etsy does and doesn't handle
| Layer | Who actually handles it |
|---|---|
| US sales tax | Handled — Etsy is a marketplace facilitator in every sales-tax state; you file nothing in the US for marketplace orders |
| GST/HST on Canadian orders | Handled only while you\u2019re unregistered — once you register and add your GST number, collection on physical items becomes yours |
| Your income tax | Never handled — every dollar of profit is reportable in Canada (T2125 or T2), 1099-K or not |
| US withholding | Your W-8BEN in the tax interview is what prevents it — and it expires every three years |
| Customs on US orders | Yours — and since de minimis ended, every parcel clears customs |
The $30,000 threshold counts your American sales
The GST/HST registration test is worldwide taxable sales — your zero-rated US orders count even though they carry 0% tax. Cross CAD $30,000 in four quarters and you have 29 days to register. Most makers should register early anyway: you collect nothing extra on US sales and reclaim the GST on materials, tools, and Etsy's own seller fees.
Customs just became a maker's problem
The US$800 duty-free threshold is gone — a $40 handmade order to Ohio is now a customs entry. Two things protect your margins: shipping delivered-duty-paid (Etsy is moving US-bound orders that way, and carrier fee claw-backs hit sellers who don't), and the fact that genuinely handmade-in-Canada goods generally qualify as CUSMA-originating — 0% duty, but only with the HS codes and origin documentation done right. We set that up once and it runs.
Micro-business, real books
Etsy fees, offsite-ads fees, shipping labels, refunds, and materials make hobby-looking shops genuinely complicated. We keep it simple: clean monthly numbers, the right registration timing, and a tax return that claims everything you're entitled to — including the home-studio costs most sellers skip.
Sources: Etsy — what Etsy remits to Canadian tax authorities · CRA — GST/HST registrants.
What we take off your plate
Cross-border tax for Etsy sellers, handled.
- GST/HST sorted for the mostly-US buyer base you actually have
- US state sales tax handled so you do not collect what you do not owe
- Canadian and US returns prepared by one team
- Treaty positions and foreign tax credits lined up
- FBAR and T1135 foreign reporting
- ITIN applications certified in-house
Mistakes we fix
Three things that go wrong for Etsy sellers.
- Treating the Etsy deposit as revenue instead of gross sales minus six separate fee lines
- Valuing your own labour at zero when costing a handmade item, so best-sellers are secret donations
- Never valuing December 31 materials and half-finished pieces as inventory for the T2125
Recognise one? Book a call and we will tell you what it is costing you.
Services for Etsy sellers
Six services, one team that knows how Etsy sellers run.
Start with one. Add the rest when it makes sense; the books, payroll and tax already talk to each other.
Free proposal
A fixed fee for your cross-border 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
Common questions.
I didn\u2019t get a 1099-K. Do I still owe tax?
Yes — the 1099-K is a US information form that mostly doesn\u2019t apply to Canadians with a W-8BEN on file. Canada taxes your worldwide profit either way.
Is my shop a hobby or a business for CRA?
If you sell with a reasonable expectation of profit, it\u2019s a business — report the income, deduct the expenses. "Hobby" status mostly means you lose the deductions, not the tax.
Etsy started collecting Canadian tax on my orders. Why?
Marketplace rules — Etsy collects GST/HST for unregistered sellers. Once you register and add your number, physical-item collection shifts to you, which is exactly when sellers should talk to us.
Related reading
Make things. We\u2019ll mind the tax.
Book a consultation and get a plain answer on exactly what applies to you.