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XXXXX
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February 16, 1995
XXXXX
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Dear XXXXX
Thank you for your enquiry of December 8, 1994 (with attachments) concerning the application of the Goods and Services Tax (GST) to the following transaction:
Our understanding of the facts, the transaction and the purpose of the transaction is as follows:
Statement of Facts
1. The XXXXX assesses the value of all real property in XXXXX This activity is carried out by XXXXX for purposes of determining property tax. Property tax is levied by both the province of XXXXX and each of its municipalities. The Assessment Act provides authority for XXXXX to ensure that all real property in XXXXX is assessed.
2. Under its XXXXX Plan, the XXXXX proposes to implement a charge to municipalities and local service districts for the cost of assessment services performed by XXXXX is an entity within the province of XXXXX
3. An amendment to the XXXXX may be required to provide XXXXX with authority to charge for its assessment services. An amendment to the Municipalities Act may be required so that funding required to cover these costs can be included in local service district budgets.
4. In order to determine the amount recoverable from municipalities and local service districts, XXXXX apportioned its estimated 1994 costs of assessment services based on the ratio of provincial taxes levied in 1994 to municipal taxes levied in 1994.
5. On or about October 1, 1994 and 1995, XXXXX will advise XXXXX of the amount owing by each municipality and local service district in respect of its assessment services for 1995 and 1996 respectively. The amount owing by each municipality and local service district for assessment services is calculated by the XXXXX in consultation with the provincial XXXXX
6. Amounts recoverable in respect of XXXXX services to individual municipality/local service districts for 1995 and 1996 will be calculated by determining the percentage of each municipality/local service district's tax base over the total tax base of all municipalities and local service districts for 1994. The percentage established for each municipality/local service will then be applied against XXXXX total cost of assessment services for that particular year.
7. On or about April 1 of each year commencing in 1995, XXXXX will invoice each municipality directly for the amount owing for its assessment service.
8. On or about April 1 of each year commencing in 1995, XXXXX will invoice XXXXX for amounts owing for assessment services supplied to local service districts. XXXXX will pay these assessment costs since the majority of their services to the community (e.g. fire protection, snow plowing, and policing) are supplied by the province. Local service districts are lightly populated with few responsibilities outside of what the province provides.
9. Any and all balances outstanding as of December 31 each year will be deducted from transfer payments due and payable to each municipality and local service district by the province of XXXXX
10. On or about September 30, 1996, XXXXX will submit a fee schedule to XXXXX indicating the amount recoverable from it in respect of assessment services supplied to local service districts, as well as that recoverable from each municipality. This fee schedule is in respect of amounts recoverable by XXXXX commencing in 1997. When changes are required, new fee schedules will be submitted to XXXXX by XXXXX
Ruling Requested
1) Is XXXXX required to charge GST in respect of the amount it invoices to each municipality for the supply of its assessment services?
2) Is XXXXX required to charge GST in respect of the amount it invoices to XXXXX for the supply of its assessment services to local service districts?
Ruling Given
Based on the facts and the transaction set out above, we rule that
1) XXXXX is required to charge GST in respect of the amount it invoices to each municipality for the supply of its assessment services as no exempting provision within the Excise Tax Act applies.
2) XXXXX is not required to charge GST in respect of the amount it invoices to XXXXX for the supply of its assessment services to local service districts since XXXXX as the recipient of the supply, is within the same entity as that of XXXXX Supplies made within the same entity are outside of the scope of GST.
This ruling is subject to the general limitations and qualifications outlined in the GST Memorandum 100-3. We are bound by this ruling provided that none of the above issues are presently under audit, objection or appeal, there are no relevant changes in the future to the Excise Tax Act, and provided that you have fully described all necessary facts and transactions for which you requested a ruling.
Should you have any questions in this regard, please call Marilyn Viger, Manager, Governmental Sector and Federal/Provincial Relations at (613) 954-3551, or Lynn Renner, Policy Officer at (613) 952-9262.
Yours truly,
J.A. Venne
Director
Tax Policy - Special Sectors
GST Policy and Legislation
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J.A. Venne
Lynn F. Renner XXXXX |
XXXXX
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