If it's a sale through CreateSpace, Amazon or an EDC reseller and it's a sale made to a state where the relevant state authority requires sales tax to be collected, they do as they are the ones making the sale on your behalf. They won't give you the information about whether they were required to collect and remit sales tax (nor will they hand over the funds for you to remit the sales tax on their behalf), so it's nothing you have to worry about.
If it's you making the sale and you live in a jurisdiction which requires you, as a seller, to collect and remit sales tax (e.g. CA, NY or NJ), or the sale is made to a state where interstate vendors are required to collect sales tax for sales shipped to that state (e.g. NY or NJ, there are a number of others but I can't think of them off the top of my head), then you need to comply and collect and remit sales tax.
To clarify a bit: If a book is sold through CS, Amazon or anyone else other than you directly, THEY are responsible for collecting and paying any taxes. If you sell direct, say from your own website where YOU send them a book from your personal stash, then you may need to collect and pay tax. I have no idea about the international rules and would suggest you contact CS Support and a local accountant/tax dude.
You'd need to contact your local Tax Office or IRS (or whatever it's called in Canada, whichever government department deals with it) about what you need to do about collecting and remitting GST/PST/HST. I've always found my local Tax Office (and the US IRS) very helpful if I phone them.
In terms of letting CreateSpace know about your EIN, there is a space to enter it in your account information in your Dashboard (in the Royalties section). But you also need to mail a W8-BEN to CreateSpace. I downloaded the W8-BEN from the IRS website (here: http://www.irs.gov/pub/irs-pdf/fw8ben.pdf) and mailed the completed form to:
ATTN: CreateSpace Accounting
8329 W Sunset Road
LAS VEGAS NV 89113
helps me a lot. Big thanks.
By the way, I am not sure how to fill the line 10 of W-8BEN form:
10. Special rates and conditions (if applicable—see instructions): The beneficial owner is claiming the provisions of Article of the
treaty identified on line 9a above to claim a % rate of withholding on (specify type of income): .
Explain the reasons the beneficial owner meets the terms of the treaty article: .
In terms of the W8-BEN, I haven’t checked the US/Canada tax treaty for the Article number (a quick call to the IRS might help there if you can’t find the answer on the IRS website), but I understand that the tax treaty rate between the US and Canada is 0% and the explanation I put (substituting my own country) was “Beneficial owner of royalties is resident in Canada and entitled to have royalties taxed in Canada and have a reduced rate of withholding within the United States pursuant to the US/Canada Tax Treaty”
so if all the sales of my book are through amazon.co.uk, amazon.com or any of the EDC channels, the only tax paid is that withheld by CS or covered by the ITIN, even for non-US authors. Is that right??
Unless CS has a valid tax payer identification number (even from US residents), they will withhold income tax on an author's (or publisher's) revenue and remit it to the IRS. So CS even requires US residents to provide a valid tax payer identification number to reduce the rate at which they will withhold. It's just the rate that will vary when the tax payer identification number is provided. If you've provided an ITIN or an EIN, then CS will only withhold at the relevant tax treaty rate, depending on which country you live in (for Canada, it's 0%, for Australia, it's 5%).
We don't have to worry about sales tax for sales through the Amazon US website or any of the EDC channels as that's their responsibility to charge, collect the sales tax from the buyer and remit it.
Thanks a lot. Also i just called IRS, here is the what I got for line 10 in the form W-8BEN:
Special rates and conditions (if applicable—see instructions): The beneficial owner is claiming the provisions of Article (XII) of the
treaty identified on line 9a above to claim a (0) % rate of withholding on (specify type of income): royalties.
Explain the reasons the beneficial owner meets the terms of the treaty article: (Beneficial owner of royalties is reside in Canada and entitled to a reduced withholding rate of royalties.)
I'm not sure if you're clear on the difference between sales tax and income tax.
Sales tax is collected by the retailer. If your book is sold by Amazon or a bricks & mortar bookstore or anybody other than your personally or a company that you operate, then sales tax is not your problem. They will take care of it. If you set up your own web site to sell books, or if you sell them door to door, or whatever, then you may have to collect sales tax.
Income tax is paid by you directly to the government. Any money you earn on sales of your book is going to be subject to income tax. For US residents, that means you're going to have to fill out a schedule C and attach it to your income tax return. I'm sure there's something similar in Canada.
You may be subject to other taxes. For example, some U.S. states have "personal property tax", which is a tax that applies to equipment and inventory. So if you stock a bunch of books in your garage, you may have to pay personal property tax on them.