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    1. emon878 is offline

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      #1

      Canadian business buying from US Drop Shippers - Do I apply for a US tax ID?

      Hey I am located in Canada and I am looking to do business with US drop shippers how would I go about doing that? Would I some how need to get a buisness ID from the US?

      Thanks
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    2. WholesaleMod's Avatar
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      #2
      Hi Emon878,

      Welcome to Wholesale Forum

      US suppliers need you to provide them with a US tax ID number before they will trade with your business. In order to buy from any US supplier a foreign business needs to apply for an Individual Taxpayer Identification Number (ITIN) with the Internal Revenue Service (IRS). To apply for an Individual Taxpayer Identification Number you cam complete the following IRS application form called W-7:For more information about applying for a Individual Taxpayer Identification Number and taxation of non US residents you can visit the following link Taxation of Nonresident Aliens

      If you are planning to buy from US suppliers on a regular basis you should consider incorporating your business in the US. Once you are a US business entity you can apply for a sales tax ID number, or Employer Identification Number (EIN) with the IRS which will exempt your business from paying sales tax.

      Once your business is incorporated in the US you will be expected to pay income tax on your profits and you will receive a foreign tax credit for any taxes you have paid the IRS on your Canadian tax return.

      To read more about applying for a US tax ID and incorporating your business in the US for non US residents you should have a look at the following threads:If you decide to incorporate your business in the US, you should investigate which state would be the best to incorporate your business in. The US has a couple of states, like Delaware where they have a 0% state wide sales tax rate.

      Hope this helps
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    3. the_sLiDe is offline

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      #3
      I am in the same situation... so as a sole proprietor in Canada registered in Ontario with a business number (from Canada) and a business identification number (in Ontario) everything should be in order? Am I correct to assume that offering goods to everyone but Canadians (me operating from Canada) is the simplest way to do things tax wise? Can I take orders from around the world and pass them on to a US drop shipper? How do the taxes work? Thanks!

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