Tax Me If You Can: Remaining in Compliance with the Canadian Cross-Border Tax

Author: Jeffrey Brown

In the shadow of the recent Wayfair decision, more and more Canadian remote sellers now have to deal with state and local sales tax collection responsibilities. All too many are still thinking they can play the catch me if you can game, erroneously citing the US Canada Tax Treaty or assuming the states can’t or won’t come to Canada for enforcement. In my 15 plus years advising clients in Canada, I’ve represented many clients in state sales tax audits and enforcement actions. Not only do they come to Canada, they love to come to Canada, not just for poutine, but for cross-border tax enforcement.

Sales tax compliance can be a costly pain in the butt. Registering as a vendor in each state. Securing exemption certificates from customers who insist they’re not subject to tax. Computing the amount of tax to collect from customers. And not just state taxes; often and more confusingly, local sales taxes as well. Paying over collected taxes to the authorities. Filing tax returns.

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