Are you selling online? Whether you’re trying to set up an e-commerce business on your own platform or you’re using an existing outlet such as Amazon or Walmart, you will incur some sort of tax issues if you’re trying to sell between the US and Canada.
Learn more about e-commerce accounting in this video.
If you prefer reading, you can find the transcription below the video.
E-commerce businesses
Hello, friends. My name is Naurin Moledina and I’m here from RMI. I am a US CPA from the state of California and I’m here to speak to you about e-commerce businesses.
As COVID has turned our lives upside down, we are exploring more and more options to go in and buy online. Thus, e-commerce businesses have gained tons of popularity in recent times. That being said, I’m here to discuss with you the issues that arise when we’re trying to set up e-commerce businesses.
Whether you’re trying to set up an e-commerce business on your own platform or you’re using an existing outlet such as Amazon or Walmart, you will incur some type of tax issues
if you’re trying to sell between the US and Canada.
selling from canada to USA
So, the complications that might be triggered when we’re trying to sell into the US, number one, is the type of company that you choose to set up. When you go to a US CPA
or a CPA that is a resident in the United States the first company that they suggest is an LLC. An LLC is a great way for them to set up a corporation in the US.
However, when you come into Canada, an LLC is not greatly looked upon because of
the fact that we might incur double taxation from that standpoint.
US state taxes
The other issue that we might have is state taxes.
Every state in the U.S. has its own laws. Every state in the U.S. goes through and has its own state taxes that are established in order to make sure that we are paying taxes on the necessary sales incurred in that particular state.
To avoid any complications with the state filing, we would recommend getting state filing exemptions that would ensure that you’re not filing extra or have the necessary paperwork and documentation in place in order to go in and do the necessary state filings.
tax identification numbers
Lastly, another issue you might face is getting proper identification numbers.
Whether it’s you personally setting up a company or whether it is you getting a corporation being set up you might need something called an ITIN number which is an individual tax identification number. That is a number assigned to you personally.
Or it could be an EIN number which is an employer identification number. That number essentially is a representation of your corporation. So, those are the two numbers that could be addressed as well when you’re trying to set up a company in the US.
Speak with cross-border tax accountants in calgary
That being said, is there a lot of information in this video? Of course, there is because it involves US taxation and Canadian taxation and its cross-border works.
It does include a lot of information but not to worry, we are here to help you. We’re here to take care of your American and Canadian tax needs and help you succeed and focus on what you do best. Which is selling online the products that you really like and care about.
Nonetheless, feel free to subscribe to our YouTube channel, comment below, and ask questions. We’re always here to answer your questions at any time. You can also give us a call at 403-457-4232 or you can simply Google us – RMI LLP (formerly RMI Professional Corporation).
Thank you very much for taking the time to listen to us today and we look forward to speaking with you soon.
Need tax advice on your next e-commerce business adventure? Book a Free consultation today or contact us at 403-457-4232 or by email at info@rmillp.com.
