How One Business Navigated Multi-Province Taxes Successfully

A growing Quebec-based e-commerce business was ready to scale across Canada but expanding outside the province brought a new challenge: multi-province sales tax compliance. Each province has its own rules for GST, HST, PST, and QST. The business owner quickly became overwhelmed trying to understand which tax to charge where, how to configure Shopify correctly, and how to avoid penalties from CRA, Revenu Québec, or provincial tax authorities.

This case study shows how the business overcame these obstacles and built a Canada-wide tax-compliant operation that boosted revenue and eliminated audit risks.

The Expansion Challenge

The company was already registered for GST and QST but wanted to sell in:
• Ontario
• British Columbia
• Alberta
• Saskatchewan
• Manitoba
• The Atlantic provinces

New issues appeared immediately:
• Shopify was charging the wrong tax rates
• Some provinces require PST in addition to GST
• Customer addresses were not mapped correctly
• Sales reports did not match accounting entries
• HST provinces were being charged GST/QST instead
• Refunds and returns triggered incorrect tax reversals
• Inventory shipped from different warehouses created tax confusion

The owner realized that expanding without proper tax configuration could lead to:
• audit exposure
• under-collected tax
• penalties
• customer disputes

How Mackisen Resolved the Multi-Province Tax Problem

Step 1 — Full Tax Mapping by Province

Mackisen created a complete tax matrix for the business, detailing:
• provinces using GST only (AB, NT, NU, YT)
• provinces using HST (ON, NS, NB, PEI, NL)
• provinces requiring PST/RST + GST (BC, SK, MB)
• QST rules for Quebec

Each product category was mapped to the correct tax rules.

Step 2 — Shopify Configuration

Mackisen reconfigured Shopify to:
• apply tax rates based on destination
• separate GST/HST/QST/PST correctly
• categorize taxable vs. exempt products
• integrate accurate shipping-based taxation
• fix tax-inclusive pricing errors

This eliminated incorrect automatic tax calculations.

Step 3 — Registration in Other Provinces

Where required, Mackisen registered the company for:
• BC PST
• Saskatchewan PST
• Manitoba RST

Registration avoided penalties and ensured full compliance.

Step 4 — Accounting Software Fix

QuickBooks was updated to:
• separate GST, HST, QST, and PST
• track tax liability by province
• create audit-friendly tax reports
• match Shopify sales to accounting records

This allowed proper reconciliation at month-end.

Step 5 — Training and Documentation

Staff received clear instructions on:
• tax rules by province
• refund and return adjustments
• shipping-origin vs. shipping-destination tax
• tax on digital vs. physical products

The business gained full internal control over tax compliance.

The Outcome

After Mackisen’s intervention:
• the e-commerce store became fully compliant across Canada
• tax was charged correctly in every province
• refund holds and audit risks disappeared
• the business avoided thousands in retroactive assessments
• sales increased due to improved customer trust
• reporting became accurate and effortless

The business is now expanding into the U.S. with a clean compliance foundation.

Key Lessons

• Multi-province sales tax is complex one wrong setting can trigger thousands in liability
• Shopify and other platforms do NOT automatically configure taxes correctly for Canada
• PST rules vary drastically and require proper registration
• Reconciliation between e-commerce platforms and accounting systems is critical
• Clean tax mapping protects against audits

Common Questions

Do I need PST registration to sell in BC or SK?
Yes for taxable physical goods.

Does Shopify automatically charge HST?
Only if properly configured.

Are digital products taxed differently?
In some provinces, yes rules vary.

Can one wrong configuration cause an audit?
Especially in PST provinces.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps e-commerce businesses navigate multi-province GST/HST/QST/PST rules, avoid costly errors, and scale across Canada with complete tax confidence.