13 October 1994 Internal T.I. 9420847 - CONTRIBUTIONS TO POLITICAL PARTIES BY WAY OF CREDIT CARD

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether credit cards can be used to make contributions to registered political parties or candidates.

Position TAKEN:

Credit cards can be used.

Reasons FOR POSITION TAKEN:

An administrative position was taken in 1989 that a credit card contribution is equivalent to a cash contribution.

		October 13, 1994

	Charities Division	Head Office
	Technical Interpretation and	Rulings Directorate
	  Communication	C. Chouinard
	Attention: Carl Juneau	957-8953
	           Assistant Director

		7-942084

Contributions to Registered Political Parties and
Candidates by Way of Credit Cards - Subsection 127(4.1) of the Income Tax Act

This is in response to your memorandum of August 15, 1994 wherein you requested our opinion on the acceptability of contributions made to registered political parties and candidates by way of credit card, in light of the wording of subsection 127(4.1) of the Income Tax Act (the "Act") which requires such contributions to be by way of cash or negotiable instrument.

It would appear from a letter dated August 17, 1989, from Otto Jelinek, Minister at the time, to XXXXXXXXXX that the Department has already taken a position regarding the use of credit cards to make contributions to political parties. In this respect, the above-mentioned letter states:

"In order to be eligible for the tax credit, the contribution must be in the form of a cash or negotiable instrument. Since a credit card slip would likely be regarded as a negotiable instrument, a contribution to a registered party made by way of credit card would satisfy this requirement."

A similar statement was made in a subsequent letter from Pierre Gravelle, Q.C. to a taxpayer:

"If a person uses their credit card rather than cash to make a direct contribution to any registered political party, then the person would be eligible for the same tax benefits as if he or she had contributed in cash."

Should you wish to see the full text of the above-mentioned letters, we can provide you with copies thereof.

XXXXXXXXXX

R. Albert
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch