30 July 1999 GST/HST Interpretation HQR0001859 - Admissions to Agricultural Fairs

Dear XXXXX

The purpose of this letter is to provide you general information about how the Goods and Services Tax (GST) applies to admissions to agricultural fairs. This issue arose during the meeting of June 1, 1999, when officials of Revenue Canada met with you and XXXXX in XXXXX. At that time, Suzanne Leclaire, who represented this Directorate at the meeting, agreed to provide a written explanation concerning this matter.

We understand that your concern involves the fact that admissions to some agricultural fairs XXXXX are subject to GST, whereas admissions to other agricultural fairs are not. We confirm that such distinct treatment is quite possible under the provisions of the Excise Tax Act (the Act), for two possible reasons:

(i) special exempting provisions in the Act for public service bodies such as charities and non-profit organizations; and

(ii) provisions whereby smaller organizations may choose not to register for the GST.

Concerning (i) above, if the supplier of the admission is a charity (i.e., an organization registered as a charity under the Income Tax Act), the admission would be exempt if the fee was $1.00 or less, or if the admission was made in the course of an occasional fundraising event. Further, for admissions made prior to 1997, the admission would be exempt if at least 90% of the functions were carried out by volunteers. This "volunteer" exemption was available only to charities, and since this provision has been repealed, it does not apply to admissions made after 1996. These are the only exemptions that might apply to an admission to a fair; generally, such admissions are taxable.

Concerning (ii) above, we generally refer to the provisions allowing certain organizations to choose not to register for the GST as the "small supplier" provisions. A charity or non-profit organization is a small supplier if its annual revenues from taxable goods and services does not exceed $50,000. A charity may also qualify as a small supplier if its total revenues in either of its two preceding fiscal years does not exceed $250,000. A small supplier may choose not to register for the GST. As a non-registrant, it would not collect GST on the amount it charges for goods and services, such as fair admissions. It would also be precluded from recovering all of the tax it pays on purchases, although many public service bodies, such as charities and some non-profit organizations, may claim partial rebates.

We trust that the above will explain the legitimate reasons why certain admissions to agricultural fairs may be subject to GST, whereas others may not. If you require further information, or if you are aware of any specific cases that you would like to refer to us, please contact Michael Place at (613) 954-7936.

Yours sincerely,

E.H. Gauthier
Director General
GST/HST Rulings and Interpretations Directorate