R-Xtra – Tax Court of Canada accepts that a hotel business generates services revenues

C Miller J accepted that the services provided by a motel or hotel to its customers are sufficient to transform the related revenues so that it does not have a business of principally earning property income (i.e., so that there is no "specified investment business").   However, this approach was inapplicable to a storage unit rental business’s revenues notwithstanding potential ancillary services (e.g., moving items into or out of storage), as what was being paid for was the storage.

This affirmation that hotels do not have businesses of earning property income is relevant elsewhere, e.g., the foreign accrual property income rules (see American Hotel offering).

Neal Armstrong. Summaries of 0742443 B.C. Ltd. [R-Xtra] v. The Queen, 2014 TCC 301 under s. 125(7) and General Concepts – Onus.