Guides
GST/HST Registration for a Printmaking Business in Ontario
When an Ontario print seller must register for GST/HST, how the CAD 30,000 small supplier threshold is counted, and the steps to register with the Canada Revenue Agency.
What to take away
- A printmaker in Ontario is a small supplier, and does not have to register for GST/HST, while worldwide taxable sales stay at CAD 30,000 or less in any single calendar quarter and in the last four consecutive calendar quarters.
- Going over CAD 30,000 in one quarter ends small supplier status immediately, on the very sale that crosses the line. You then have 29 days to register.
- Ontario's HST rate is 13%. Once registered, you charge it on taxable sales and can claim back the tax you pay on studio supplies.
- You need a business number first. You register through Business Registration Online or with Form RC1.
- Small suppliers can register voluntarily, which is worth thinking about if your inks, paper and press costs are large.
What counts toward the CAD 30,000
The Canada Revenue Agency (CRA) tests your revenue from worldwide taxable supplies, and includes the revenue of associates. It leaves out financial services, sales of capital property, and goodwill from selling a business. For a print studio, that means the money you take from selling prints, workshops, commissions and similar taxable work counts. The sale of a used press does not, since it is capital property.
The test is not a calendar-year total. The CRA says you are a small supplier if your revenue is CAD 30,000 or less in any single calendar quarter and also in the last four consecutive calendar quarters. Two things follow from this.
First, a busy quarter can trigger registration by itself. A studio that sells an entire edition to a gallery and a run of workshop places in one three-month stretch can pass CAD 30,000 in that quarter even if the rest of the year is quiet.
Second, steady sales can also cross the line gradually. If every quarter stays under the limit but the four-quarter total goes over, you stop being a small supplier at the end of the month that follows, and you have 29 days from your first sale as a non-small supplier to register.
Keep a simple running sheet with quarterly totals. A spreadsheet row per quarter, with print sales, workshop income and commissions in separate columns, is enough to see the position at a glance. The notes in how to price supplies for printmaking inks and paper show how to track costs in the same sheet.
What happens when you pass the threshold
If you exceed the limit in a single quarter, you stop being a small supplier immediately. You must charge GST/HST on the supply that pushed you over, even though you are not registered yet. The effective date of your registration is that supply's date, and you must register within 29 days.
In practice, that makes the threshold easy to miss. A print studio with a large order pending should check the totals before accepting the order. If one sale would put the quarter over CAD 30,000, the HST applies to that sale itself, and your price has to account for it.
Failing to charge tax when you were required to does not remove the liability. The CRA says that if you were required to charge GST/HST but did not, you are still liable and must report it for the period in which you should have charged it. For a small studio that can turn a few unpriced sales into a bill taken from your own margin.
Voluntary registration
Small suppliers may register even when they do not have to. The effective date is usually the date of application, though the CRA may accept an earlier date within 30 days of receiving the application.
The reason to consider it is input tax credits. A registrant can recover GST/HST paid on purchases and expenses used in commercial activities. For a printmaker, that can include ink, paper, plates, tools, studio rent where HST is charged, and software. The CRA lists conditions: the purchase must be for use in your commercial activities, you must have been registered in the period the tax was paid, tax must actually have been payable, you must hold the required documentation, and you must claim within the time limit, which is four years for most registrants. Certain items cannot be claimed, such as personal-use purchases, club memberships, and only part of meals and entertainment.
The trade-off is that you must charge 13% HST on taxable sales, file returns, and keep the records. For a studio with small sales and small costs, staying unregistered is usually simpler. For one with large material costs and customers who are businesses (galleries, shops, designers) that recover the tax themselves, registering voluntarily can make sense. Work out your own figures, and compare them against the costs described in what printmaking supplies may cost.
How to register
You need a business number before you register for GST/HST. You can then register through Business Registration Online, or send Form RC1.
After registration:
- You are liable for GST/HST on the earlier of the day you receive payment and the day payment is due.
- An invoice issued before payment must have its GST/HST included in the reporting period that contains the invoice date, even if you have not collected the money.
- Registered suppliers should provide invoices showing their GST/HST business number, together with the other required information.
- You must file a return for every reporting period.
The CRA assigns the reporting period from your revenue. Businesses with annual taxable supplies of CAD 1,500,000 or less are assigned an annual period, with monthly and quarterly filing as options. Annual filers generally file within three months after the fiscal year-end. A sole proprietor with a 31 December year-end and business income has until 15 June to file, and until 30 April to pay. Monthly and quarterly filers have one month after the end of the period. If a due date falls on a weekend or public holiday, the next business day is on time. Returns are filed electronically.
Quick Method for a small print business
Registered businesses with revenue of CAD 400,000 or less (tax included) can elect the Quick Method, under which you remit a percentage of your tax-inclusive sales instead of subtracting input tax credits. You still charge 13% HST to customers, but you do not claim credits on ordinary operating expenses such as ink and paper. For Ontario, the CRA's table shows a rate of 8.8% for businesses in the services group and 4.4% for the goods-for-resale group. The goods group applies only if purchases of goods for resale in the prior year were at least 40% of annual taxable supplies, which a studio that makes its own prints will not usually meet.
The Quick Method also gives a 1% credit on the first CAD 30,000 of eligible sales each year. If you are weighing it, compare your own year of purchases with the remittance rate. High material costs tend to favour the regular method, and low material costs tend to favour the Quick Method.
Studio habits that make registration easier
- Separate your accounts.Use a dedicated bank account for the studio so quarterly totals are easy to pull.
- Record the tax separatelyon every taxable sale once you register, so the HST collected can be totalled for the return.
- Keep supplier invoices, with the supplier's name, date, amount and, for larger purchases, the GST/HST registration number.
- Know your customers.Sales to buyers outside Canada raise other questions. The guide on selling linocut and screen prints into Canada covers customs and labels for that side.
- Plan for grants.Public arts funding has its own reporting, as in Canada Council grants for printmaking presses and studio rent.
If your shared studio rent is a large part of your costs, the Montreal and Toronto shared studio cost comparison is a good reference for what Ontario artists pay.
