CRA is reviewing whether a hotel would have a services business for TOSI purposes

The definition of an excluded share for TOSI purposes requires inter alia that less than 90% of the business income of the corporation have been derived from the provision of services. Paul Wilson indicated that a business of car leasing would not be regarded as a services business, whereas a landscaping business (or insurance broker business) likely would be regarded as a services business. CRA has traditionally looked at a hotel business as being a services business, but is considering whether this would be the case in the TOSI context where the only activity of the hotel is renting rooms.

Neal Armstrong. Summary of 2 December 2019 CTF Conference - Paul Wilson in "New Taxation Rules for Private Corporations: So far, so reasonable?" under “Scenario 3” et seq. under s. 120.4(1) – excluded shares – (a)(i).