7 May 1990 Income Tax Severed Letter RRRR360 - Costumes used in a live theatre production

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.

xxxxx 5-9656
R.S. Primeau
(613) 957-2060

xxxxx

Dear Sirs:

Re: Costumes Used in a Live Theatre Production

This is in reply to your letter of February 21, 1990. We apologize for the delay in our response.

You have asked for our opinion as to whether a costume used in a live theatre production would qualify as a "uniform" under paragraph (i) of class 12 of Schedule II of the Income Tax Regulations.

It is your view that, if the costumes in question were acquired by a taxpayer in the course of earning income from a live theatre production business and were worn only by actors and only during rehearsals and performances, they would qualify under class 12, paragraph (i), based on the following reasoning:

• 1. The word "uniform" does not appear to be defined in the Act.
• 2. An exclusive definition of the term "uniform" also does not appear to exist in the case law.
• 3. However, in Frederick Ian Brownlee v. MNR, [[1978] C.T.C. 2780] 78 DTC 1571, it was noted that the term "uniform" cannot be so restricted as to exclude many other items of clothing and could even include regular business suits.
• 4. The common everyday meaning of the term "uniform" as defined in Webster's New World Dictionary is "the official or distinctive clothes or outfit worn by the members of a particular group when on duty". 5. Since the actors would wear the costumes only during rehearsals and performances, they would be wearing them only when "on duty".

Our Comments

The word "uniform", when used with respect to clothing, connotes the idea of sameness or unity in appearance. Such a connotation exists, in our opinion, in the webster's definition quoted in 4 above as well as in the definition for "uniform" given in The Concise Oxford Dictionary:

• uniform a., n., & v.t. 1. a. Not changing in form or character, the same, unvarying, (present a uniform appearance; all of uniform size and shape; ...); .... 2. n. Uniform distinctive dress worn by members of same body, e.g. by soldiers, sailors, policemen, nurses, schoolchildren. 3. v.t. Make uniform; clothe in uniform (a uniformed officer).

A theatrical costume does not, in our opinion, follow this rule of sameness or unity in appearance. Rather, each costume is uniquely suited to a particular role. Thus, there would be a variety of costumes owned by a taxpayer in a theatrical production business because of the different roles in the plays produced.

We do not think that the above-mentioned Brownlee case, which involved the tax treatment of a business suit worn by a police officer in the course of carrying out his duties, has any relevance with respect to the proper tax treatment to be given to theatrical costumes.

Finally, and most importantly, while paragraph (i) of class 12 refers to "a uniform", paragraph (k) of that same class refers to "apparel or costume, including accessories used therewith, used for the purpose of earning rental income". Thus, there is a clear distinction to be made, for purposes of class 12, between a uniform and a costume. If a costume is not used for the purpose of earning rental income, it cannot be included in class 12 and must instead be included in class 8. Such treatment is, by the way, consistent with paragraph 11(1) of Interpretation Bulletin IT-525 (copy attached), which indicates that class 8 treatment is given to a wardrobe acquired by a performing artist specifically to earn self- employment income.

We trust that the above comments will be helpful to you.

Yours truly,

for Director
Business and General Division
Specialty Ruling Directorate
Legislative and Intergovernmental
Affairs Branch