Ask different questions for goods and services
For ordinary goods shipped to a customer, delivery facts are central to the provincial analysis. Retain the shipping address, order terms and delivery evidence. Billing address alone can be misleading when an order is delivered elsewhere.
For many services, the customer address obtained in the ordinary course of business is relevant under the general rule. But there are exceptions and special rules, including certain services connected to property. A consultant’s laptop location or the fact that a meeting happened by video is not a complete tax analysis.
Illustrative comparison: two orders from the same office
A Toronto retailer sells an ordinary taxable product delivered to an Ontario address and an identical product delivered to an Alberta address. Under the usual delivery-based rule for those goods, the Ontario supply attracts 13% HST and the Alberta supply 5% GST. The shipping evidence supports the difference.
Now consider a Toronto consultant engaged for work connected to a particular property. Copying the retailer’s shipping logic into that service invoice would be inappropriate. Retain the contract, customer addresses and description of the work so the relevant service rule can be reviewed. These examples concern GST/HST only; other provincial taxes can require separate assessment.
Turn the reviewed decision into a usable workflow
Document the tax code, reason and supporting record for each common sales scenario. Review exceptions such as customer address changes, pickups, mixed supplies, credits and platform sales. A marketplace report may describe tax it collected, but it should still be reconciled to the underlying transactions.
When uncertain, flag the order before filing rather than choosing the most familiar rate. Changing software defaults retrospectively can affect already-issued invoices and filed periods, so maintain a record of what was corrected and who approved the approach.
Evidence to retain with the sales records
A short decision record is more useful than a note saying “out of province.” Keep enough information for another preparer to reproduce the conclusion.
- What was supplied and whether it is taxable, zero-rated or exempt.
- Relevant customer addresses and delivery terms.
- The applicable general or special place-of-supply rule.
- Who collected tax and how credits or refunds changed it.
- Any separate PST or QST question requiring specialist review.
Put this into practice
Sources and current guidance
A practical next step
Bring the records you have.
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