Online Reseller Taxes Ontario HST 13% & T2125

Who this guide is for

This guide is for Ontario residents who sell physical goods through multiple channels: Facebook Marketplace, Depop, Kijiji, their own website, local markets, or a mix of platforms. If you buy and resell items, sell handmade goods, or flip vintage and used products directly to buyers, this guide covers your GST/HST and T2125 guide obligations.

Note on marketplace facilitators: Platforms like eBay and Amazon are marketplace facilitators. Under Canada's marketplace rules, if you are not registered for GST/HST, the platform generally collects and remits the tax on the qualifying goods you sell through it, so you may not collect it yourself on those sales. This changes once you register. A registered vendor is generally required to charge and collect GST/HST on its own taxable supplies, and the Quick Method can apply to the supplies you are the one required to collect on. So the Quick Method is not automatically off the table just because you also sell through a platform. This guide focuses on resellers who make direct sales and collect the tax themselves.

GST/HST registration threshold

Once your total taxable revenue goes over $30,000 in a single calendar quarter, or over four consecutive calendar quarters, you must register for a GST/HST account with the CRA within 29 days. Ontario uses HST at 13%, federal and provincial tax combined into a single CRA remittance.

The $30,000 threshold is based on your total taxable revenue, not only the sales where you collect the tax yourself. The safe assumption is that sales through platforms like eBay and Amazon count toward your threshold, even when the platform is the one that remits the tax. The marketplace rules change who collects and remits, not whether those sales count toward your registration test. Because the interaction between the marketplace rules and your own threshold can get technical, confirm your position with the CRA or an accountant if most of your sales run through platforms.

What changes when you register

Once registered, you charge 13% HST on every direct sale to an Ontario buyer. For buyers in other provinces, the rate depends on their province. See the place of supply rules.

You can use the Quick Method to simplify remittance. Instead of tracking every expense for GST purposes, you multiply your total revenue including HST by a flat rate. For Ontario goods sellers, the Quick Method rate is 4.4%. For service sellers, it's 8.8%.

T2125 deductions for online resellers

Even before you hit the $30,000 threshold, you must report your reselling income on T2125 guide. Every dollar of profit is taxable. The good news: your legitimate business expenses reduce that taxable income.

Common deductions for Ontario online resellers:

Purchases during the year (Line 8320): What you paid for the items you resold goes on line 8320. Your cost of goods sold is then calculated as opening inventory (line 8300) plus purchases (line 8320) minus closing inventory (line 8500), with the result on line 8518. Purchases are usually the largest part of that total, so keep receipts for every purchase.

Shipping and postage (Line 9275): Shipping costs to send items to buyers, packaging materials, boxes, tape, labels.

Platform and listing fees: Fees charged by selling platforms go on Line 9270 (Other Expenses).

Photography equipment: Camera, lighting, and photography supplies used for product photos, depreciated via CCA.

Home office: If you store inventory and manage your reselling business from home, you may qualify for a home office deduction based on the square footage used for storage and business activities.

Vehicle expenses: If you drive to source inventory, pick up items, or drop off shipments, track your business use of your vehicle with a mileage log. You can deduct the business portion of your vehicle costs with a mileage log.

Advertising: Promoted listings, social media ads, business cards.

Records you need to keep

CRA requires you to keep records for six years. For resellers, this means:

• Purchase receipts for every item you bought to resell
• Sales records showing what each item sold for
• Shipping receipts and tracking records
• Platform fee statements (monthly or annual)
• Mileage log if you drove for business
• Bank and PayPal/e-transfer statements

Key deadlines

Your T1 personal tax return including T2125 guide is due June 15 if you have self-employment income, but any taxes owing must be paid by April 30 CRA deadlines to avoid interest. If you're GST/HST registered, most new registrants file annually, due June 15 for the previous calendar year.