Selling into the US without a US entity — do I need an adviser, or can I do it alone?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: federal income tax turns on whether there is a US trade or business and a permanent establishment under the treaty.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Do I need a US company to sell to American customers?
Not necessarily. Plenty of foreign sellers supply US customers for years with no US entity at all, invoicing from home and shipping across the border. What changes the answer is presence rather than revenue: an employee working in the United States, stock held in a US warehouse, or a contractor with authority to conclude contracts in your name. Any of those can create a US trade or business, and the treaty then asks whether there is a permanent establishment behind it. A separate question runs alongside, on its own timetable: state sales tax registration, which does not wait for a company to be formed and is usually the first US obligation a foreign seller acquires.
Does hiring a US contractor create a US tax filing obligation?
It depends on what the contractor is permitted to do. Someone who generates leads, demonstrates the product and passes the order back to you for acceptance sits in a different position from someone who agrees price and terms and binds you. Authority to conclude contracts is the feature that turns a contractor into a presence, and it is judged on what actually happens rather than on the label in the agreement. The practical step is to read the contractor agreement before it is signed and, where the commercial relationship allows, keep acceptance of orders with the home company. Where that authority has already been exercised, the analysis has to start from the facts as they stand.
Does keeping inventory in a US warehouse mean I owe US tax?
Warehoused stock is one of the facts that most often changes a foreign seller's position, and it can change it on two fronts at once. For federal income tax, holding goods in the United States for sale there feeds into the trade-or-business analysis, and the treaty's permanent establishment test then decides whether the United States may tax the profit. For state sales tax, physical stock sitting in a state is generally enough on its own, with no treaty relief available, because states apply their own nexus rules. Fulfilment arrangements that shift your goods between warehouses in several states can therefore create registrations in places you have never dealt with directly.
Why am I being asked to collect US sales tax with no US entity?
Because sales tax nexus and income tax are separate systems with separate triggers. States test economic nexus on your own sales into that state, measured by value or by transaction count depending on the state, and they do not apply the Canada-United States treaty when they do it. A seller with no US company, no US bank account and no US staff can still cross a state threshold purely on the volume of orders shipped there. That is why collection obligations usually arrive before any federal income tax question does, and why marketplace arrangements need reading closely to establish who is treated as the collector on which sales.
Will the Canada US tax treaty stop me paying tax in the States?
The treaty works on business profits. It does not reach everything a state can charge. Where you are resident in Canada and have no permanent establishment in the United States, the treaty allocates business profits to Canada, but that position has to be claimed and supported rather than assumed. It gives no protection against state sales tax, and a number of states decline to follow the federal treaty position for their own income taxes as well. So the treaty can be a complete answer to one exposure and no answer at all to the exposure that tends to arrive first.
When should I actually incorporate in the United States?
Incorporation is a response to facts, not a precaution taken in advance. Forming an entity before there is anything for it to do creates federal and state filings, and those filings continue in years with no revenue at all. The usual triggers are hiring someone in the United States, taking on premises or stock, needing a customer-facing entity for contracting or credit reasons, or reaching a point where the exposure is real and containing it inside a subsidiary is worth the compliance that comes with it. Each trigger points to a different answer on entity type and state of formation, so the sequence matters: identify the trigger, then choose the structure.
How does the treaty tie-breaker work when both countries say I am resident?
As a sequence, stopping at the first test that gives an answer: where you have a permanent home available; if in both or neither, where your centre of vital interests is; then habitual abode; then nationality; and if all of those tie, the two tax authorities decide by agreement. It is evidential rather than elective — you do not choose your treaty residence, you demonstrate it, which makes the record of homes, family and time the substance of the claim. See tie-breaking dual residency.
Do Canada and the United States share tax information?
Yes, through more than one channel. The treaty has an exchange-of-information article that supports both routine and on-request exchange. Separately, an intergovernmental agreement has Canadian financial institutions identify US-reportable accounts and report them to the CRA, which passes them to the IRS, with the reverse flow for Canadian residents. Most other country pairs use the Common Reporting Standard for the same purpose. See FATCA reporting.
