17 June 1998 GST/HST Ruling HQR0001019 - Application of the GST/HST to Annual Dues of Members that Fund the Operating Costs of a Not-for-profit Campground

                                                                        GST/HST Rulings and Interpretations
Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, ON K1A 0L5

                                                                        June 17, 1998

Dear XXXXX

We are writing in reply to a letter dated December 29, 1997 (with attachments) from XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transaction described below.

Statement of Facts

Our understanding of the facts, the transactions, and the purpose of the transactions is as follows:

1. XXXXX is incorporated under the XXXXX is a not-for-profit corporation, the objects of which are to organize a campground community and provide recreational facilities for members and to manage and operate the facilities and property of the campground community.

2. XXXXX is neither a condominium corporation nor a cooperative housing corporation.

3. The corporation operates a recreational campground facility ("the Campground") in XXXXX The Campground is on XXXXX acre parcel of land owned by the corporation and contains XXXXX sites. There are XXXXX additional sites available for rental on a seasonal basis and XXXXX sites available for overnight rental. XXXXX l which are operated year round. There are also washroom facilities, a recreation hall and playgrounds.

4. Persons wishing to use the Campground purchase a share in XXXXX Each shareholder receives a membership certificate. This certificate entitles the member to legally occupy a specified site as long as the membership is maintained in good standing. XXXXX retains ownership of the sites. A membership is in good standing if all rules and regulations are complied with and all dues and accounts are fully paid.

5. Section x of the rules and regulations sets out the type of trailer which can be situated on a site This section provides that trailers must be XXXXX The trailers may be up to XXXXX feet wide with a maximum lentgth (tongue and bumper not included) of XXXXX feet.

6. The trailers are not permanently affixed to the sites. The trailers are set on cement piers or other stabilizing methods are used. The trailers are not bolted down, fastened to or strapped down with hurricane straps.

7. The water, sewer, electricity and gas lines are suitable for year-round use. The park facilities are accessible all year long and there is year round security.

8. XXXXX is billed directly and incurs on its own account all costs of operating and maintaining the Campground.

9. Each year, an operating budget is presented to the members for approval. The cost of operating the Campground is divided equally among the XXXXX members. The members' pro-rata share of expenses is assessed as membership dues which are payable by XXXXX of each year. Payment of these dues is required to keep the membership in good standing.

Ruling Requested

You have requested confirmation that the annual dues assessed to members to fund the operating costs of the campground are exempt from GST.

Ruling Given

Based on the facts set out above, we rule that the supplies of a campsite by XXXXX to a member of the corporation is an exempt supply pursuant to subparagraph 7(b)(ii) of Part I of Schedule V to the Excise Tax Act. The annual dues assessed to the member are periodic payments which are consideration for this supply and are, therefore, not subject to GST.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to departmental interpretative policy; and that you have fully described all necessary facts and transactions for which you requested a ruling.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9212.

Yours truly,

Michael Warren
Real Property Unit
Financial Institutions and Real Property Division
GST/HST Rulings and Interpretations Directorate