Last week I had the opportunity to attend a New Exporters to Border States (NEBS) training session hosted by the Ministry of Economic Development and Innovation in partnership with the Canadian Consulate in Buffalo, N.Y. The program was designed to prepare Canadian businesses to start exporting their wares to the United States. We heard from U.S. Customs and Border Protection agents, an immigration lawyer, an American tax accountant, a U.S. banker, a customs broker, and a warehousing company.
Here are a few of the keys facts we learned:
- Do you have to pay income and sales tax?
The requirement to pay U.S. income tax varies depending on how you have chosen to set up your business interactions with the States. A business without a physical presence south of the border, that only sends products to customers, would in most cases not need to file a U.S. tax return. However, if you have a location or staff in the U.S., you would likely need to pay taxes in the States. I was surprised to learn that there are many cases in which you don’t have to pay sales tax on goods being shipped by a Canadian exporter to U.S. customers.
- Is your product allowed in the country?
Much like when foreign products come into Canada, there are a number of requirements that must be met before Canadian products enter the United States. Safety inspections, Food and Drug Administration approval, labeling requirements, trademark and anti counterfeit efforts all come into play. U.S. Customs and Border Protection is responsible for enforcing the rules of many different agencies. Rather than navigate these waters alone, seek help. Start by visiting a Small Business Centre where you can be referred to lawyers, accountants and other applicable government agencies. You may have a great product, and the U.S. could be a great market, but exporting will turn into a nightmare if your product is held up or ultimately rejected at the border.
- Are you allowed in the country?
Perhaps you’ve got your product across the border, but is there a reason you need to travel to conduct business, with or without your product? Maybe you need to install it, deliver some training, or attend a trade show. We learned from the immigration lawyer that there are some fine lines between your ability to freely travel to the United States as a visitor for business, perhaps to attend a tradeshow or to meet a prospective client, and actually working in the United States, conducting activities like taking a sales order, installing a product or providing some consulting. Crossing the border can be stressful, but being prepared with all the right details on why you are traveling, including an understanding of the work permits or visas that may be required, should make for a much smoother passage.
NEBS training is offered quarterly as a two-day “trade mission” traveling to Buffalo. It also is offered as a one-day training in various locations in Ontario. Watch for an upcoming announcement of a New Exporters to Border States training coming to Halton Region this spring.
For more information about any of Halton Region’s Small Business Centre resources and services, and how we can help direct you to the right resources, contact us at 1-866-442-5866, www.haltonsmallbusiness.ca, email@example.com or visit us at 1151 Bronte Road, Oakville. Don’t forget to follow us on Twitter @haltonecdev and Facebook at www.facebook.com/HaltonSBEC.