CRA states that a principal business determination generally need not be made on an annual basis
Leasing companies and third-party administrators (e.g., insurance companies) might have their mix of exempt and taxable activities fluctuate annually above and below 50%. How is “principal business” determined for purposes of the “financial institution” definition in ETA s. 149, and is the determination made on an annual basis? On the second question, CRA responded:
[G]enerally a person does not need to determine its “principal business” on an annual basis; this determination should be made any time there is a significant change to the person’s business activities.
The factors which CRA would consider in comparing two business activities in this context include the relative: revenues and number of supplies made; assets; and time and efforts required.