Taxes are the least fun part of selling handmade goods, and HST confusion keeps plenty of talented makers up at night. Do you need to charge it? What happens if you cross some invisible line? Will the CRA show up at your market booth? (They will not. Probably.)
Here is a plain-language walkthrough of HST for Ontario craft vendors: what it is, the famous 30,000-dollar threshold, and exactly what to do when your business grows past it. One important note before we start: this is general information, not tax advice. Tax rules change and every situation is a little different, so check the CRA website or talk to an accountant about your specific case.
HST for Ontario Craft Vendors: What Is It, Exactly?
HST stands for Harmonized Sales Tax. In Ontario, it combines the federal GST (5 percent) and the provincial sales tax (8 percent) into a single 13 percent tax charged on most goods and services. When you are registered, you collect 13 percent HST from your customers and send it to the Canada Revenue Agency. The good news: you also get to claim back the HST you paid on your business purchases, which are called input tax credits. More on those later.
The 30,000-Dollar Rule: Small Supplier Threshold
This is the number every vendor needs to know. You are considered a small supplier if your total taxable sales are 30,000 dollars or less over the previous four calendar quarters. As a small supplier, you do not have to register for HST, and you do not charge it. Simple.
But watch the wording: it is 30,000 dollars in a rolling four-quarter window, not per calendar year. If you have a monster holiday season that pushes your last twelve months over 30,000 dollars, the clock starts ticking.
What counts toward the 30,000 dollars?
| Counts toward the threshold | Does NOT count |
|---|---|
| Sales of your handmade products | Gifts and personal items you did not sell |
| Market booth sales and online shop sales | Sales of exempt items (rare for crafters) |
| Custom orders and commissions | |
| Shipping fees you charge customers |
Most craft vendors sell taxable goods, so assume your product sales count. If you are getting close to the threshold, start tracking quarterly. A simple spreadsheet with monthly sales totals is enough.
Do You Need to Register? A Quick Decision Guide
| Your situation | What to do |
|---|---|
| Sales under $30,000 in the last 4 quarters | No registration needed. Do not charge HST. |
| Sales just crossed $30,000 in a single quarter | You must register within 29 days after the quarter ends, and start charging HST. |
| Sales crossed $30,000 gradually over 4 quarters | You must register by the end of the month after the month you crossed it. |
| You want to claim input tax credits now | You can register voluntarily even under $30,000. |
| You only sell at the odd market for fun money | You are almost certainly a small supplier. Relax. |
Voluntary registration is worth knowing about. If you spend a lot on materials and equipment, the HST you pay on those purchases adds up. Registering lets you claim it back through input tax credits, even before you hit 30,000 dollars in sales. The trade-off is paperwork: once registered, you must charge HST and file returns. For many growing vendors, it is worth it. For a casual hobby seller, it is not.
How to Register With the CRA
Registering is free and done through the Canada Revenue Agency. You need a Business Number (BN) first, which you can get when you register. The steps:
- Go to the CRA Business Registration Online service, or call 1-800-959-5525.
- Register for a GST/HST account. You will receive a nine-digit business number with an RT0001 program account.
- Choose your reporting period. Most small vendors report annually or quarterly.
- Note your effective registration date. You start charging HST from that date forward, not before.
The whole thing can be done in one sitting. It is refreshingly un-dramatic for a government process.
What Charging HST Looks Like at a Market
This is where theory meets your booth table. Once registered, every sale needs 13 percent HST. You have two practical options.
Add it at checkout. Price your candle at 40 dollars, and the customer pays 45.20. Your price signs should say “+ HST” so nobody is surprised. Your card reader can be set to add tax automatically.
Include it in your price. Price the candle at 45 dollars tax-included. This keeps checkout simple and your signs clean, which many vendors prefer. You still owe the CRA the HST portion of every sale. The math: divide your tax-included price by 1.13 to find the pre-tax amount. On a 45-dollar candle, that is 39.82 pre-tax and 5.18 HST owed.
Either way, keep records of every sale. Your card reader reports and a simple daily sales log are enough for most vendors.
Input Tax Credits: Getting HST Back
Here is the part that makes registration feel less painful. Every dollar of HST you pay on business expenses can be claimed back as an input tax credit: materials, tools, packaging, market booth fees (yes, the HST on your booth fee counts), website costs, even a portion of your phone bill. Save every receipt. When you file your GST/HST return, you subtract the HST you paid from the HST you collected and remit the difference. Many vendors are surprised how much comes back.
Filing Your Return
How often you file depends on your sales. Most small vendors file annually or quarterly. The CRA assigns your filing frequency when you register, and you can request a change. File even if you had a slow period with no sales. Late filing comes with penalties and interest, and the CRA has a long memory. Set a calendar reminder a month before each deadline. Your future self will be grateful.
Three Mistakes That Trip Up Vendors
Charging HST before you are registered. You cannot collect HST without a GST/HST account. If you are a small supplier, your prices are simply your prices. Do not add 13 percent “just in case.”
Forgetting to register after crossing the threshold. This is the expensive one. If you should have been charging HST and were not, the CRA can assess the uncollected tax against you. Track your rolling twelve-month sales so the threshold never sneaks up on you.
Throwing away receipts. Without receipts, you cannot claim input tax credits, and you cannot prove your numbers if questions ever arise. Photograph every receipt the day you get it. It takes ten seconds.
When in Doubt, Ask a Professional
Tax rules have edge cases, and this post covers the common path for Ontario craft vendors selling taxable handmade goods. If you sell digital products, ship internationally, or have an unusual business structure, a quick chat with an accountant can save you real money and real stress. Think of it as insurance for your business brain.
Keep More of What You Earn at Our Markets
Now that the tax side feels less scary, put your energy where it belongs: selling beautiful work to happy customers. Art & Souls Events runs free-admission markets across the Ottawa area, so every dollar at your booth goes straight to you (minus whatever the CRA is owed, of course). Check our upcoming market dates and come grow your business with us.