Selling to Canadian Customers From the US: When You Must Register for GST/HST, the $30,000 Small Supplier Rule, and Simplified vs Normal Registration

2026-10-09 · RKube Services

When a US business must register for Canadian GST/HST: the $30,000 CAD small supplier rule, simplified registration for digital sellers, normal registration, rates by province and worked examples.

A lot of US businesses pick up Canadian customers without planning to. A software subscription gets a few sign-ups from Toronto. An online course sells well in Vancouver. A Shopify store starts shipping to Calgary. At some point the question comes up: do we have to deal with Canadian sales tax?

Canada's federal sales tax is the GST, and in five provinces it's combined with the provincial tax into a single HST. Whether a US business has to register depends on three things: what you sell, who you sell it to, and whether you're "carrying on business" in Canada. The dollar figure that shows up in almost every rule is $30,000 CAD, but it's measured differently depending on which rule you fall under.

This guide walks through the three situations US sellers usually land in, with worked numbers for each. Everything here comes from the Canada Revenue Agency (CRA) pages linked throughout.

The rates you'd be charging

First, a quick look at what's at stake. GST/HST rates depend on the province where the customer is. These are the current rates in effect since April 1, 2025:

British Columbia, Manitoba, Saskatchewan and Quebec also have their own provincial sales taxes (7%, 7%, 6% and 9.975%). Those are run by the provinces, not the CRA, and they have separate registration rules. This article sticks to the federal GST/HST.

Situation 1: you sell digital products or services to Canadian consumers

This is the most common one for US businesses: SaaS, apps, streaming, online courses, downloadable templates, paid newsletters, and remote services sold to individuals.

Since July 1, 2021, Canada has had a simplified GST/HST regime for non-resident vendors in exactly this position. It's built for businesses with no presence in Canada, so they can collect and remit tax without going through the full registration.

The $30,000 test for digital sellers

Under the simplified regime, you count revenue from taxable digital supplies made to Canadian consumers and to Canadian businesses that aren't registered for GST/HST. If that total is more than $30,000 CAD in any 12-month period, you're required to register.

A few details from the CRA's threshold page matter in practice:

• The figure is in Canadian dollars. $30,000 CAD is roughly $21,000 to $22,000 USD, depending on the exchange rate. US sellers often assume the threshold is higher than it is.
• Expected revenue counts, not just past revenue. The test looks at revenue that is, or could reasonably be expected to be, from these supplies. If a new Canadian contract will clearly push you over, you don't wait for the money to arrive.
• Sales through a registered marketplace are excluded. If an app store or other distribution platform that's registered for GST/HST makes the sale, that revenue counts toward the platform's threshold, not yours.
• Recalculate regularly. The CRA tells vendors to keep rechecking, because it's a rolling 12-month window.

What B2B sales do to the count

Sales to Canadian businesses that are registered for the normal GST/HST don't count toward the $30,000, and you don't charge them GST/HST under the simplified regime. In practice, you ask the business customer for its GST/HST registration number at checkout or on the contract and keep it on file. A US agency whose Canadian clients are all registered businesses may never reach the threshold, even with a lot of Canadian revenue.

Worked example: an Austin SaaS company

Say a software company in Austin, Texas sells a $45 CAD per month subscription. It has no office, staff or servers in Canada.

Twelve-month total: (6 x $1,800) + (6 x $3,150) = $10,800 + $18,900 = $29,700. That's just under $30,000 CAD. One more month at 70 subscribers would replace a $1,800 month with a $3,150 month, and the rolling total would hit $31,050. At that point the company is required to register under the simplified regime.

Once registered, it charges tax at the rate for each customer's province. An Ontario subscriber pays $45 + 13% HST ($5.85) = $50.85. An Alberta subscriber pays $45 + 5% GST ($2.25) = $47.25. The company files returns and remits what it collected.

How simplified registration works

Simplified registration is done online in one session: the form can't be saved partway through, and it times out after 30 minutes of inactivity. After you submit, the CRA reviews it and issues a business number, and the registration package comes by email.

Two features make it easier for US businesses:

• You can remit in US dollars. Simplified registrants can apply to calculate and pay net tax in a qualifying foreign currency, and the CRA lists the US dollar and the euro.
• It's lighter than normal registration. It's designed for collecting and remitting, so simplified registrants generally don't claim input tax credits the way normally registered businesses do.

You can't be registered under both regimes at the same time. If you qualify, the CRA says you can apply for normal registration instead in certain cases, which is worth considering if you have Canadian costs you'd want to recover.

Situation 2: you sell physical goods to Canadian customers

Here the answer turns on where the goods ship from.

Shipped from the US. If you ship an order from a US warehouse to a customer in Canada, the goods are imported. GST/HST is generally dealt with at the border through customs, and the customer or the courier usually pays it on import. Selling this way doesn't by itself require a GST/HST registration.

Stored in or shipped from Canada. It's different once your inventory sits in Canada, for example in a Canadian fulfillment warehouse. The CRA calls these "qualifying goods": goods delivered or made available in Canada, including goods in a fulfillment warehouse in Canada or shipped from a place in Canada. A non-resident vendor whose sales of qualifying goods to Canadian consumers exceed $30,000 CAD has to register, and the simplified regime isn't available for these sales. You'd register under the normal GST/HST.

Worked example: a Seattle e-commerce store

A Seattle store sells outdoor gear. In year one it ships every Canadian order from its Washington warehouse. In year two it moves 400 units into a fulfillment centre near Vancouver to speed up delivery. Year two Canadian consumer sales from that stock are $52,000 CAD. Because those goods are now qualifying goods sold from inside Canada and the total is over $30,000 CAD, the store needs a normal GST/HST registration and charges tax on those sales. Its year-one sales, shipped from Washington, didn't create that requirement.

Situation 3: you're carrying on business in Canada

The third route is the general rule that applies to everyone. If a non-resident is carrying on business in Canada and makes taxable supplies there, it has to register for the normal GST/HST unless it's a small supplier.

"Carrying on business" isn't the same as having an office. The CRA notes you can be carrying on business in Canada without a permanent establishment there. Staff or agents in Canada, a Canadian place you work from, contracts concluded in Canada, and regular in-person work for Canadian clients all point that way. It's a facts-and-circumstances question, and it's the one to get professional help on.

How the small supplier rule works

You're a small supplier if your worldwide taxable revenue, together with your associates, is $30,000 or less. Note that this one counts worldwide revenue, not just Canadian sales, so most established US businesses that carry on business in Canada won't qualify. There are two tests:

1. Single calendar quarter. If you go over $30,000 in one quarter, you stop being a small supplier on the sale that takes you over. You register with an effective date no later than that sale, and you charge GST/HST on that sale.
2. Four consecutive calendar quarters. If you go over $30,000 across the last four quarters (but not in a single quarter), you stop being a small supplier at the end of the month after the quarter you went over. You register by your first sale after that point.

In either case, the CRA's examples say you have to register within 29 days.

Registering as a non-resident under the normal regime

Non-residents register for the normal GST/HST by sending Form RC1 by fax or mail to the CRA's non-resident tax services office. The CRA generally asks non-residents for a security deposit, with an exception when estimated annual taxable sales are $100,000 or less and annual net tax falls between $3,000 owing and $3,000 refundable.

Normal registrants can claim input tax credits for GST/HST paid on business costs, which is why some sellers with Canadian expenses choose it even when the simplified regime is open to them.

A quick way to find your situation

Mistakes we see

Reading the threshold in US dollars. The $30,000 is Canadian. Convert your Canadian sales before you decide you're under it.

Counting business customers. Under the simplified regime, sales to registered Canadian businesses aren't in the count. Collect their numbers and you may stay under the threshold legitimately.

Moving inventory without checking. Sending stock to a Canadian fulfillment centre changes the rules overnight. Plan the registration before the first pallet crosses.

Forgetting the provinces. Registering for GST/HST doesn't cover Quebec's QST or the PSTs in British Columbia, Manitoba and Saskatchewan. Each has its own rules for out-of-province sellers.

Not tracking customer location. You need each customer's province to charge the right rate, and your books need to show tax collected by rate. Set that up in your checkout and accounting software from the start.

What this means on your US books and return

GST/HST you collect from Canadian customers is not your money. On your books it belongs in a liability account (for example "GST/HST payable") until you remit it to the CRA, not in revenue. If it lands in sales, your US income looks higher than it is and your Canadian return won't tie to your ledger.

It also doesn't turn into a US tax break. The IRS foreign tax credit covers foreign income taxes, and a sales or value-added tax like GST/HST doesn't qualify (IRS Publication 514). For tax year 2026, any GST/HST you pay on Canadian costs and can't recover is simply part of that cost, deductible as a business expense where the expense itself is deductible (IRS guidance on deducting business expenses).

Frequently asked questions

Does a US business have to charge GST/HST to Canadian customers?

Only in certain cases: if it sells digital products or services to Canadian consumers above $30,000 CAD in 12 months, sells goods from inventory in Canada above $30,000 CAD, or carries on business in Canada and isn't a small supplier.

Is the $30,000 threshold in US or Canadian dollars?

Canadian dollars, for both the small supplier rule and the simplified regime threshold.

Can I pay GST/HST in US dollars?

Simplified registrants can apply to calculate and remit net tax in US dollars or euros. Normal registrants report in Canadian dollars.

Do I charge GST/HST on sales to Canadian businesses?

Under the simplified regime, not if the business is registered for the normal GST/HST. Keep its registration number on file.

Can I claim back GST/HST I pay on Canadian costs?

Normal registrants can claim input tax credits. Simplified registrants generally can't, which is a reason some sellers choose normal registration when they're allowed to.

Where RKube fits

We do bookkeeping and tax prep for US businesses and Canadian businesses, including GST/HST tracking and filings for US sellers with Canadian customers. We can look at your Canadian sales, tell you which situation you're in, and set your books up to track tax by province. Start with a free scoping call and our 30-day bookkeeping trial. Call (984) 234-7030 or visit rkubeservices.com.

General information, not tax or legal advice. Rules and rates are current as of October 2026 per the CRA pages linked above; check them before you register or file.