Holding files with GST and HST. Stock photo by Getty Images
As with almost anything tax-related, the question of when to register for and charge GST/HST can be confusing. Here are the basics.
Almost every business needs a GST/HST number. If you operate a sole proprietorship, partnership or corporation that provides taxable property or services and has gross sales of more than $30,000 in a fiscal year, you are required to collect GST on behalf of the federal government.
Businesses that make less than $30,000 in a fiscal year are deemed “small suppliers” and do not need to register.
One exception applies to taxi or limo operators, who must register even if they’re a small supplier.
There are also different rules and income thresholds for charities, non-resident businesses and some other public bodies. For example, a charity remains a small supplier if it brings in less than $250,000 in gross revenue.
Even if you’re not required to register for a GST/HST number, you can still register voluntarily.
And why would you want to volunteer yourself for anything tax-related? It could end up benefiting you, since you may collect tax credits that can recover paid or payable taxes.
If you run a small business and aren’t sure whether you’ll make more than $30,000 in a fiscal year, you can still register and start charging once you cross the $30,000 threshold.
So if you’ve made $29,500 and you make another $500 sale, you would charge GST/HST on that sale and each successive one.