Registering Your Business and Sales Tax Obligations

9 min · text · Beginner

You hit your jurisdiction's sales tax threshold on a Tuesday. By that Friday, you legally must register. Miss it and the tax authority can backdate your registration, demand 6-12 months of unpaid sales tax, and add penalties. Most dropshippers learn this the hard way at the $80-100k mark when their accountant does the year-end reconciliation. Today: when you must register, when you should register early, and the sales tax math that decides your retail pricing.

The threshold (and why it sneaks up)

Every jurisdiction that levies a sales tax / VAT / GST has a mandatory registration threshold. Once your annual turnover crosses it, you must register and begin collecting tax.

Australia: $75,000 AUD turnover in a 12-month rolling period. Register within 21 days of crossing. United Kingdom: £85,000 in a 12-month rolling period (VAT). Register within 30 days. United States: No single federal threshold — each state sets its own (typically 00,000 in revenue OR 200 transactions). See Module 9.6 for state-by-state details. EU: Varies by country (€10,000-100,000 depending on member state). One Stop Shop (OSS) simplifies multi-country filing. Canada: $30,000 CAD in a single calendar quarter or four consecutive quarters (GST/HST). New Zealand: $60,000 NZD in a 12-month period (GST).

Two triggers apply in most jurisdictions:

Past turnover. You hit the threshold in the last 12 months. Register within the deadline.
Projected turnover. You expect to hit the threshold soon. Register before you reach it.

The second one is the trap. A new operator who ramps from $0 to $8k/month in 4 months has projected annual turnover well above most thresholds. Many tax authorities take the position that registration was required once the projection became clear. Backdated liability is a common audit finding.

What sales tax / VAT / GST registration means

Once registered, you:

Charge the applicable tax rate on domestic sales. A