I’m setting up a POD store and I’m wondering about what tax I need to charge. I live in Ontario, Canada but the POD warehouse is located in the United States. I plan to sell in the United States and Canada, so do I only need to add tax for Canada and all options (PST, HST, GST, etc) or do I need to also include the United States?
Great question! I definitely understand how complicated sales tax can be for a business. Especially US sales tax, it is especially tricky.
If your warehouse is located in the USA then there is a good chance you will need to pay taxes in the states, as a warehouse location can be considered a nexus (physical location for your business). Each state in the USA has their own rules and thresholds for this. And as each business is unique as well, the taxes you need to collect and remit could also vary based on what you sell.
I strongly recommend hiring a tax professional to help you with setting up your taxes and understanding the thresholds for paying taxes to the appropriate tax entities. In the interim, Avalara is an amazing resource with some great info on nexus’ and tax rates: Small Business Tax Questions and Answers - Avalara.