8 June 1999 GST/HST Interpretation HQR0001805 - Charity Golf Tournament Fees

Dear XXXXX

Thank you for your facsimile May 19, 1999, (with attachments) concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to golf tournaments held by charities. You attached various newspaper articles discussing the Department's view that charities are precluded from issuing charitable donation receipts with respect to golf tournament fees unless prizes awarded to participants are of nominal value (i.e., their fair market value does not exceed the lesser of $50 or 10% of the tournament fee).

Interpretation Requested

Although charity golf tournament fees are not exempt under section 2 of Part V.1 of Schedule V of the Excise Tax Act (the Act) where the charity is precluded from issuing a charitable donation receipt, are such fees exempt from GST/HST under section 3 of the same Part?

Interpretation Given

In accordance with section 3 of Part V.1 of Schedule V of the Act and subject to the exceptions specified in that section, a supply of a right to participate in a golf tournament made by a charity in the course of a fund[-]raising activity would be exempt provided the charity does not make (or agree to make) such supplies on a regular or continuous basis throughout the year or a significant portion of the year. We view the period that the tournament registrations are sold in the year as the critical period in applying section 3 of Part V.1, rather than the period of the tournament itself.

Please note that charity golf tournament fees may also be exempt under section 2 of Part V.1 where the charity is able to issue charitable donation receipts for any portion of the tournament fees (e.g., where prizes awarded to participants are of a nominal value).

On April 1, 1997, the harmonized sales tax (HST) replaced the goods and services tax (GST) and the provincial sales tax (PST) in the three participating provinces of Nova Scotia, New Brunswick and Newfoundland with a harmonized tax rate of 15%. Should you require additional information regarding the application of the HST to your activities, please contact the undersigned.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Department with respect to a particular situation.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-0420.

Yours truly,

Lorrie Grannary
Charities and Non-profit Organizations Unit
Public Service Bodies and Governments Division
GST/HST Rulings and Interpretations Directorate