I am new and doing my quarterly taxes for the first time. I have a US shop and set up Canada taxes in error (upon further reading, I don't hit the threshold required to collect taxes for a few Canadian shipments).
Now I can't "un" set up Canadian taxes. Instead, at this point, I have just put a 0 in all the tax options on the Canadian tax table. Is that sufficient to solve this so I don't charge my Canadian clients any taxes, or do I need to do something else?
Hi there @lara9209!
Don here from Shopify. :)
It should be the case that once you have set all tax rates for a region to 0%, that you would not be charging taxes for that reason.
Could you give us a bit more info on how you first set up these taxes so we can be sure of how that worked?
If you let us know the steps you took initially, that might shed more light on the current situation, but as above, if you have set these rates to be 0% there should be no reason why taxes would be charged for that location.
Thanks for the response Don. I was doing my state taxes for Q3 and I realized I wasn't collecting taxes for Canada sales (as my Etsy account does). So I went to the process to set it up. I went to Settings > Taxes > On Tax Regions I clicked on the SetUp button for Canada. But there weren't any base taxes populated, so I clicked on "reset to default tax rates".
Upon further investigation, I now know that my business is too small to be required to collect Canadian taxes and I understand why Etsy has to and my individual store in Shopify does not need to.
So I went back to try to get the label on Canada in the Tax Regions are to say NOT COLLECTING like it still says for the rest of the world, but am unable to return it to that status.
I have reset all the tax rates to 0 for Canada, so if that solves the problem, I think I am good.
So ... somehow, the Canada tax thing has reset itself to the original version which says "not collecting" and "setup". Since I don't want to disturb that apple cart ... I can't recreate what I did.
But if memory serves me correctly, I clicked on the Edit ... there were boxes next to each of the provinces with a % in them. I simply made all the boxes 0 and saved it. What I don't remember is if I went through any steps to get to the boxes with the % in them.
Here is where I read about the exception for needing to collect Canada sales tax for shipments from US ... https://www.avalara.com/us/en/blog/2019/01/canadian-sales-tax-for-us-sellers.html . It says, "However, you might qualify for the small supplier exception: If you shipped less than $30,000 of orders into Canada over the previous four quarters, you’re not required to collect GST or HST. (Keep in mind that this is a “rolling” period, not a calendar year.)"
I do like 5 shipments a year to Canada ... so I just ignore it.