CRA finds that sponsorship revenues of a public sector body were not subject to GST/HST

Subject to an exclusion respecting radio, TV or print advertising, ETA s. 135 deems there to be no supply where

a public sector body makes

(a) a supply of a service, or

(b) a supply by way of licence of the use of a copyright, trade-mark, trade-name or other similar property of the body,

to a person who is the sponsor of an activity of the body for use by the person exclusively in publicizing the person’s business … .

A public sector body (PSB) is defraying some of the expense of organizing an event at a particular centre through selling sponsorships, which include logo visibility, branding opportunities, acknowledgement during the event, and use of an exhibition booth. . CRA somewhat generously considered that all of these items fell within the listed s. 135 items other that the exhibition booth, which it characterized as a supply of real estate. However, it then applied the single supply doctrine to find that all of the sponsorship revenues received by the PSB were not subject to GST/HST, stating:

[A]lthough the sponsors receive the use of real property, they also receive a multitude of promotional services as part of the sponsorship package. These packages are all considered a single supply of promotional services, because, amongst other things, it is not possible for a sponsor to choose which benefit it wants and to only pay that price.

This ruling shows CRA using the ‘single’ supply doctrine to find that there is ‘no’ supply.

Neal Armstrong. Summaries of 20 February 2019 Ruling 196070 under ETA s. 135 and 123(1) – recipient.