30 November 1990 External T.I. 9022115 F - CCA Rate for Bar Code Printers

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

19(1)

November 30, 1990

19(1)

Re:  Bar Code Printers

We are writing in reply to your letters of August 22 and October 29, 1990 wherein you requested concerning capital cost allowance for 24(1) In particular you have requested a ruling concerning the application of the new regulations to implement a tax change by which certain electronic point-of-sale equipment used in retail businesses would qualify for a 100 per cent capital cost allowance rate. The tax change was announced by press release on August 8, 1989. Draft regulations were released on February 2, 1990 and the Income Tax Regulations (the "Regulations") were amended September 29, 1990.

We cannot issue the ruling requested because the Department only provides advance rulings in respect of a specific transaction or transactions which a taxpayer is contemplating. Nevertheless, we are prepared to provide the following general comments.

Paragraph (s) of Class 12 of Schedule II of the Regulations states that the tax change applies to the following property (emphasis added):

i)     electronic bar code scanning equipment designed to read product bar codes applied to goods held by the taxpayer for sale in the ordinary course of the business,

ii)     a cash register or similar sales recording device designed with the capability of calculating and recording sales tax imposed by more that one jurisdiction in respect of the same sale,

iii)     equipment and computer software designed to covert a cash register or similar sales recording device to one having the capability of calculating and recording sales tax imposed by more than one jurisdiction in respect of the same sale, or

iv)     electronic equipment and computer software that is ancillary to property described in subparagraph (i), (ii) or (iii) and all or substantially all the use of which is in conjunction with that property.

Subparagraphs (i), (ii) and (iii) include equipment only if it is designed:

i)     to read (barcodes),

ii)     with the capability of calculating and recording (sales tax), or

iii)     to convert (equipment).

Although equipment that prints barcodes is not described in any of (i) to (iii), above, subparagraph (iv) does include equipment which is "ancillary" to property described in subparagraphs (i), (ii) and (iii). However, based on the use by the judge of the ejusdem generis doctrine in, the case of G.T.E. Sylvania Canada Ltd. v. The Queen 74 DTC 6315 (F.C.T.D.), subparagraph (iv) of the regulations which includes ancillary equipment should not be used to extend the general meaning of subparagraphs (i), (ii) and (iii). In particular, the judge said at 6320:

     "The ejusdem generis doctrine is as old as Bacon's maxims. That rule, which I repeat, is that where general words follow an enumeration of particular things they do not introduce changes of a different character.

     In my judgment the familiar rule that where there are general words following particular and specific words of one genus the general words are presumed to be restricted to the same genus as the particular words....

     ....It seems to me that where there are ancillary words of this nature it is a sound rule not to give such a construction to the ancillary words as will wipe our the significance of the particular words which antecede them".

In our opinion, subparagraphs (i), (ii) and (iii) include point-of-sale equipment designed to read and record sales and subparagraph (iv) should not be interpreted so as to extend the meaning to include equipment designed to print the bar codes or sales tags to be read.

We trust that this is the information you require.

for DirectorBusiness and General DivisionRulings DirectorateLegislative and IntergovernmentalAffairs Branch