The tax situation for buying a digital product online from LA from a company based in Toronto for the amount of 150 Canadian is as follows: - The buyer from LA does not have to pay any sales tax to the US or California, since the product is worth less than $150 USD⁶⁷. However, they may have to pay customs duties if the product is subject to them⁶⁸. To estimate the customs duties, you can use the Canada Border Services Agency's tool⁶. - The Toronto company has to charge and remit GST/HST to Canada and Ontario, since their total taxable supplies of digital products or services to Canadian consumers exceed $30,000 CAD over a 12-month period¹². The GST/HST rate depends on the province of the buyer, not the seller¹. In this case, the GST/HST rate is 13%, since the buyer is in Ontario¹. Therefore, the Toronto company has to charge $19.50 CAD as GST/HST on the product. - The Toronto company may also have to charge and remit sales tax to the US or California, if they have a sales tax nexus in the US¹³. This means that they have a physical or economic presence in the US that creates a tax obligation¹³. For example, if they have an office, a warehouse, an employee, or a significant amount of sales or transactions in the US, they may be required to register and file sales tax returns in the US¹³. The sales tax rate varies by state and locality, and may also depend on the type of product³. To find out the sales tax rate for LA, you can use an online sales tax calculator or software³. I hope this helps you understand the tax implications of online purchases of digital products from Canada to the US. If you have any further questions, please feel free to ask.

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