14 August 2002 GST/HST Ruling 34600 - Tax Status of Electrical Mobility Vehicles "Scooters"

Dear XXXXX:

I am writing to revoke the Application Ruling sent to you on XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of certain electrical mobility vehicles, also known as scooters.

Your letter dated XXXXX, asked for confirmation that zero-rated devices such as wheelchairs, walkers and other similar aids to locomotion would include electric scooters such as XXXXX. This letter amends and replaces our earlier ruling.

Statement of Facts

Our understanding of the facts from your letter and from promotional literature provided by manufacturers of these products is as follows:

1) The electrical mobility vehicles (scooters) are either three or four wheeled one-passenger vehicles powered by a rechargeable battery.

2) They are fitted with contoured supportive seats with adjustable seat back angles. Seat heights can be raised or lowered to provide easier transfer from a bed or chair. Some models provide optional positioning straps on seats to secure riders. In some cases, vinyl seats are available as an option to alleviate concerns of persons suffering from incontinence.

3) Arm rests can be adjusted by angle, both vertically and horizontally or flip up entirely to provide a secure transfer for persons with limited torso movement.

4) Steering on these vehicles is designed to be adjustable by height and degree of inclination. Tillers are adjustable. Controls and switches are ergonomically designed to be within easy fingertip reach. Some models feature lighted soft-touch control panels with digital controls. Other models offer different kinds of throttle levers with varying finger controls (pull versus push). Optional extended throttle levers are also available.

5) These vehicles have carriage steps with low ground clearance to assist riders who have difficulty lifting their feet.

6) The maximum width of the scooters has been designed so the vehicle may easily move through residential doorframes. They have a short turning radius that enables the vehicle to negotiate access ramps with sharp turns.

7) Some models are equipped with rear anti-tip wheels that prevent the vehicle from tipping over if the user ascends a slope of greater degree than recommended. Other models feature internal fault detection, anti roll-back and anti roll-forward mechanisms.

8) The choice of scooters vary from fully equipped with air-spring suspension to basic models that have no suspension at all.

9) Some scooter models are equipped with front and rear bumpers as standard equipment. In many cases, the frames are detachable and lightweight so the vehicle can easily be transported.

10) Some scooters come with driving lights and are marketed for outdoor oriented customers.

11) Other available options include: carrying baskets that attach to the body of the scooter, adjustable headrests, rearview mirrors, forearm and wishbone crutch and cane holders, walker holders, oxygen bottle carriers, safety flags, rear view mirrors, lighting packages, audible back-up warning signals, canopies and choice of colour.

Ruling Requested

Are the following electric scooters, XXXXX zero-rated by section 14 of Part II of Schedule VI to the Excise Tax Act (ETA)?

Ruling Given

Based on the information provided, we rule that the electric mobility vehicles (scooters) listed above are zero-rated, meaning these supplies are taxable at 0%.

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 ETA, or to our interpretative policy; and that you have fully described all necessary facts and transactions for which you requested a ruling.

Explanation

Section 14 of Part II of Schedule VI to the ETA zero-rates "a supply of a chair, commode chair, walker, wheelchair lift or similar aid to locomotion, with or without wheels, including motive power and wheel assemblies therefore, that is specially designed for use by an individual with a disability."

The ETA does not define the term "individual with a disability". However, the World Health Organization defines the concept of "disabled" as "functional limitation due to a deficiency". The Dorlands' Illustrated Medical Dictionary, 27th Edition defines this term as "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to last or has lasted for a continuous period of not less than 12 months." Therefore, an individual with a disability may be described as an individual who is restricted in carrying out the activities of daily living because of some medical impairment.

We consider "specially designed" to be a precise term intended to ensure that only items made to address the specific medical conditions of individuals with a disability fall under the zero-rating provision. The term "designed," relates to the intention of the original designer or manufacturer as to the ultimate use of the goods as reflected in the qualities and features of the items themselves. Goods must be specially designed for the particular use of persons with disabilities. The qualifier "specially" imposes a restriction on the word "designed" which excludes general purpose goods from this zero-rating provision.

Some devices may have been originally designed for a particular purpose (for example, space, military or commercial applications) and are later turned to other uses, including assisting individuals to overcome a disability. While these devices may be of use to persons with a disability, they were not specially designed for use by such individuals. As mentioned in our earlier letter, an example of such a device would be an automatic door opener.

We note that while some manufacturers promote electric mobility vehicles exclusively as devices for persons with disabilities, others are also promoting these products as mobility aids for members of the public who may not have a disability yet who have difficulty walking longer distances (for example, seniors).

Some promotional materials advertise scooters as "safe, economical and environmentally friendly alternative means of transportation" or as a "consumer lifestyle mobility device".

Notwithstanding the manner in which these vehicles are promoted, they will be zero-rated under section 14 of Part II of Schedule VI, if they were specially designed for use by an individual with a disability. This means the vehicles must have been designed at the outset for this purpose and they must exhibit design features, qualities and capabilities that are specifically intended to address the various needs of persons with a disability, namely persons who have limited mobility due to physical disabilities.

From the information provided, we understand that the model vehicles listed in your letter include most or all of the following design features, qualities and capabilities specifically intended to address the various needs of persons with a disability:

•   seats that can be set at different angles and that can swivel and slide to facilitate the transfer of an individual with a disability;

•   seat height that can be raised or lowered to provide easier transfer from a bed or chair;

•   seats and backrests that are padded to alleviate pressure sores for persons who sit in the vehicles for long periods of time;

•   optional positioning straps on seats;

•   optional vinyl seats to alleviate concerns of persons suffering from incontinence;

•   seats that can be ergonomically designed for persons who require pressure relief or lumbar support;

•   arm rests that can be adjusted vertically and horizontally to provide a secure transfer for persons with limited torso movement;

•   arm rests that can be flipped up to enable the individual to remain in the vehicle while working at a desk or table;

•   optional headrests;

•   carriage steps that have low ground clearance to assist individuals who have difficulty lifting their feet;

•   handlebars that are adjustable by height and angle;

•   controls and switches that are ergonomically designed to be within easy reach;

•   thumb or finger controls that enable persons with limited dexterity to operate the vehicle with a spring assisted "wig wag" throttle control;

•   throttle controls that can be switched for either left or right hand operation - designed for persons who have limited use of one hand or partial paralysis on one side;

•   maximum width that is designed so the vehicle may easily move through residential door frames;

•   short turning radius that enables the vehicle to negotiate access ramps with 180 degree turns;

•   rear anti-tip device that prevents the vehicle from tipping over should the user ascend a slope of greater degree than recommended - designed for persons with limited upper body mobility who cannot adjust their body position to increase the stability of the vehicle in this situation;

•   frames that are detachable and lightweight so the vehicle can be easily transported by companions or caregivers, and

•   optional holders for walkers, canes, crutches and oxygen cylinders.

Taking the foregoing into account, we have concluded that the electric mobility vehicles listed in your letter are zero-rated by section 14 of Part II of Schedule VI as a "similar aid to locomotion" specially designed for use by an individual with a disability. As a result, these vehicles are subject to the GST/HST at a rate of 0%.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9590.

Yours truly,

Elaine Bonnah
Municipalities and Health Care Services Unit
Public Service Bodies & Governments Division
Excise and GST/HST Rulings Directorate