Place of supply: whose tax applies?
The rules that decide which province's tax a sale carries — destination for goods, special rules for services — with worked examples.
Goods follow the destination
Ship goods to Ontario and the sale carries Ontario HST at 13% — even if your store is in Alberta. Deliver over the counter and the counter's province rules. The question is always where the customer takes supply.
Services are messier
Services generally follow the customer's address, with carve-outs for real property, events and transport that follow the thing itself. When in doubt, the CRA's place-of-supply memoranda are the authority — or ask your accountant once and encode the answer.
Why software must do this
A business selling into three provinces faces three tax treatments on the same product in the same afternoon. SeroBooks carries a destination-tax matrix by category and region, so each line computes from the rules rather than one hopeful default rate.
The customer's location sets the rate, not yours
Place-of-supply rules are the single most misunderstood part of Canadian sales tax for businesses that ship. A shop in one province selling to a customer in another generally charges the customer's provincial rate, not its own — which means one business can legitimately charge five different rates in a week and be correct every time.
Get this wrong in one direction and you under-collect and owe the difference yourself; wrong in the other and you have over-charged customers, which is its own problem.
Why marketplaces make it sharper
Selling through a marketplace means the shipping province arrives as data rather than as a conversation at a counter, so an order missing its destination cannot be taxed correctly at all. SeroBooks enriches orders with their ship-to province before posting them, and refuses to guess — because a guessed rate filed to the CRA is exactly the outcome nobody wants.
Genuinely exempt buyers — a reseller with a certificate — are recorded as zero-rated rather than as errors, and counted in the return.
How SeroBooks applies this
Tax is decided per line, not per invoice. Each line's treatment comes from the product's tax category and the place of supply, so a GST-only item and a GST-plus-provincial item sit on the same sale without anyone thinking about it. Combined rates split into their federal and provincial halves in the ledger — one payable account per tax actually levied — which is what lets a return be filed from the books rather than rebuilt in a spreadsheet.
The Tax report then reads that same ledger for any period: taxable sales by rate with the base for each, zero-rated sales counted rather than dropped, credit notes netted, and a self-check against the sales ledger that says so out loud when the two disagree. Input tax credits accrue from purchase documents as they are entered.
Tax handled per line, per province, automatically.
The place-of-supply engine inside SeroBooks does this all day.