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Charging GST

Expert: Julie King

Ellen asked:

Do I have to charge gst when placing my handmade clothing in retail stores on a consignment basis?

Julie King answered:

All business owners and organizations must charge GST when they reach the appropriate volume of sales, regardless of the type of activity.

A couple of key things tell you when to pay the GST:

  • How much money do you earn in? If it is under $30,000 for every four quarters you do not have to charge the GST. Also, if you earn 1/4 of $30,000 in any quarter you must then register for and charge the GST.
  • If you are a sole proprietor or partnership, you need to combine the income from all of your business. So, if you earn $12,000 a year selling items on consignment, but also earn $20,000 running another type of business, you would still need to charge GST as your total revenue would be $32,000.

These two articles should help you understand both the GST and your general tax obligations:

Demystifying the GST

Help! What Taxes Must I Pay?

About the author

Julie King is the co-founder and managing editor of CanadaOne, Canada's first small business portal.

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