Charging taxes on wholesale

[AshleyR]

So I'm pretty sure I have my first wholesale customer. They are interested in buying guest soaps for their motel rooms (just a small place), and full sized bars for their gift shop.

Since the guest bars for the rooms won't be for resale, they will have to pay PST on them, correct? I'm not sure how that works. I know I don't pay PST on supplies I buy FOR my business... but I use my supplies IN my product obviously. I'm not sure how it works when the product (my soap) is FOR their business but is not being used IN anything of theirs. See why I'm confused?

The bars they are buying to sell in their gift shop they won't pay taxes on because they will be for resale. But.... what about the room soaps?

This tax stuff confuses me so much!

 

[AshleyR]

Keep in mind I'm in Ontario, Canada! I have tried doing research on this myself but can't seem to figure out exactly what I'm looking for.

 

[Tabitha]

The room soap is figured in to the cost of the overnight stay, the package deal. It should be all inclusive & they charge taxes on that.

 

[AshleyR]

The room soap is figured in to the cost of the overnight stay, the package deal. It should be all inclusive & they charge taxes on that.

So I should not charge them taxes on the room soap OR the soap for the gift shop then?

 

[IanT]

The room soap is figured in to the cost of the overnight stay, the package deal. It should be all inclusive & they charge taxes on that.

So I should not charge them taxes on the room soap OR the soap for the gift shop then?

I dont think you need to charge them taxes for either unless the items are not for resale...

I think they need to provide you with their wholesaler ID number though..

 

[donniej]

I dont think you need to charge them taxes for either unless the items are not for resale...

I think they need to provide you with their wholesaler ID number though..

In the USA, this is exactly what I would do.

 

[IanT]

I dont think you need to charge them taxes for either unless the items are not for resale...

I think they need to provide you with their wholesaler ID number though..

In the USA, this is exactly what I would do.

oh wait forgot about the Ontario part lol woops

 

[Tabitha]

IN the US I would not. I would assume it is the same in Canada. They are reselling the room soap, it is just bundled with the room, meal, maid service, etc.

 

[AshleyR]

Thanks everyone! Funny, I just FINALLY got my PST information in the mail yesterday. I registered for it months ago but it took forever to come, so I was confused about a lot of this tax stuff. It's all clear now! Thanks again!

 

[MsBien]

By the way, congratulations on getting that account. I remember when you asked a question about pricing, and it looks like you've figured that out.

How many soaps will be they ordering every month?

Stacie

 

[AshleyR]

By the way, congratulations on getting that account. I remember when you asked a question about pricing, and it looks like you've figured that out.

How many soaps will be they ordering every month?

Stacie

Thanks! It's not 100% "official" yet, but it looks pretty good. They received my samples and were very happy with them. They're a small motel that closes during the winter months, so they're interested in getting soap for their next season starting in the spring. We're going to discuss all the details over the next few months, and they won't actually be buying the soap until the new year probably.

 

[AshleyR]

Okay, so I just got off the phone with ONT TAXS, just to confirm what I was supposed to charge before I sent another quote off to my potential wholesale customer.

They told me I DO need to charge BOTH GST (I registered)and PST on the motel room soaps! I mentioned about the cost of the soap being factored into the cost of the room, and the lady I spoke with put me on hold to double check with another person if what she told me was right. She came back on the phone and told me that YES, BOTH taxes need to be charged.

Soooooooooooo, if you're selling wholesale soap to any hotels/motels/B&B's/etc. (for their rooms) in ONTARIO, you need to charge both taxes.... apparently!