E-commerce and Online Retail Accounting in Alberta

The CRA already has your numbers

Under the reporting rules for digital platform operators, platforms that let sellers earn income from goods and certain services collect and verify information about reportable sellers and file it with the CRA each year. The Part XX information return for a calendar year is due by January 31, and the platform also has to give each reportable seller a copy of what it reported.

So the starting point has moved. Where the practical position used to be that small online activity went largely unobserved, the CRA now receives seller-level data annually. If a copy of that report arrives and it does not match what went on the return, the conversation is a short one. Reconciling the platform report to your own records at the start of the year is a great deal easier than explaining a difference later.

Three places sales tax hides for an Alberta seller

Provinces that have their own tax

Alberta has no provincial sales tax, which is why sellers here are the ones most often caught out. British Columbia requires a business located in Canada but outside BC to register where it causes goods to be delivered into the province, subject to a revenue threshold of 10,000 dollars, and registration is required before you supply taxable software for use on a device ordinarily situated in BC. Saskatchewan and Manitoba operate their own retail sales taxes with their own registration rules.

These are provincial taxes, entirely separate from GST, filed with the province rather than the CRA. Registration also takes time, so it is worth reviewing where your customers actually are before the volume into another province becomes significant.

GST paid at the border

GST on imported goods is payable to the CBSA at the time of import, calculated on the duty paid value. As a registrant you recover it through input tax credits, but entitlement depends on the facts, including who actually imported the goods for use in their own commercial activity. Sellers using third-party logistics or a supplier that acts as importer of record sometimes find the tax was paid by someone who is not them.

The documentation is the claim. Customs accounting documents matter as much as supplier invoices, and they are the records most often left with the broker rather than filed with the books.

GST across the provinces you ship to

Once registered, the rate you charge on goods generally follows where they are delivered rather than where you are, so an Alberta seller charges HST on shipments into participating provinces. This is a storefront configuration issue more than an accounting one, and it is worth verifying against a real order to each region rather than trusting the default settings.

Inventory is not an expense until it sells

Section 10 of the Income Tax Act sets the valuation rules. You may value each item at the lower of its cost and its fair market value at year-end, or value the whole inventory at fair market value, and cost includes what you paid to get the item to your location and ready to sell. Having chosen a method you continue with it in later years.

The consequence trips up growing sellers every year. Buying stock does not reduce this year’s income; selling it does. A business that has put its cash into inventory can be short of money and taxable at the same time, and the first time that happens is usually the year it grew fastest. Knowing your closing inventory before year-end, rather than in March, is what makes that manageable.

Selling into the United States

US state sales tax obligations can arise from sales volume alone, without any physical presence, and the rules differ state by state. That is outside Canadian tax law and outside what this page can answer. If a meaningful share of your orders ships to the United States, get advice from someone qualified in that jurisdiction, and get it before the volume builds rather than after a state makes contact.

How we work with online sellers

A side business on one marketplace and a brand shipping from a fulfilment centre have the same underlying questions, at different volumes.

• Bookkeeping reconciled to platform payouts, so fees, refunds, and chargebacks are visible instead of netted away.
• GST registration and filing, with place of supply checked against how your storefront is actually configured.
• Provincial registration reviews for BC, Saskatchewan, and Manitoba as your customer mix changes.
• Inventory and cost of goods sold handled properly, with a method chosen and kept.
• Import documentation gathered so the input tax credits you are entitled to can be claimed.
• Corporate and personal returns, including whether incorporation is worth it at your stage.