Sharing Daily Discoveries About Personal Finance And Business Topics

Charging The Wrong Sales Tax Online

With more people trying to get their business offerings online I noticed one interesting thing in regards to invoicing customers that purchase products and services that are outside of the operator’s home territory. Here in Canada we generally have two types of sales tax on most items. First you would be charged a federal tax and then you would be charged a provincial tax where the amount varies depending on where you shop.

Now normally for most goods even if you sell it online to a customer that is located in say a different province you are supposed to charge them the provincial tax that is applicable to where the person is located. But what I have noticed is a ton of people have setup their systems to only charge taxes as if they were simply selling to customers within their area. So that could be a significant savings to the customer due to this oversight. But as the business I can imagine you would get in trouble for that.

If you recently created an online shop for your business to handle transactions you may want to double check that.

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