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.
Dear Sirs:
Re: Class 39
This is in reply to your letter of February 15, 1991 concerning air conditioning equipment as Class 39. We apologize for the delay in responding to your request.
A Canadian taxpayer operates a printing business. The taxpayer moved operations to a different building and subsequently installed the air conditioning equipment. The floor space of the building is devoted primarily to the printing activities.
The air conditioning system is necessary to regulate the temperature and humidity in the area where the printing activities take place. This insures that the inks take to the paper and dry properly. Furthermore, it aids in maintaining the proper moisture content of the paper. This equipment was exempt from federal sales tax since it was considered equipment purchased by a manufacturer or producer for the purpose of controlling moisture content of material being processed.
Paragraph 44 of Interpretation Bulletin IT-145R, as amended by the Special Release of February 28, 1986, indicates that certain activities of a printing business qualify as manufacturing or processing activities. It is your view that the air conditioning system can be included in Class 39 as manufacturing and processing machinery and equipment. Class 39 is the successor to Class 29. Class 29 provided an accelerated write-off of capital cost allowance for depreciable machinery and equipment used in Canada for the manufacturing and processing of goods for sale or lease.
We assume that this a normal building air conditioning system. Such systems are described as component parts of a building included in paragraph (q) of Class 1 of Schedule II of the Regulations. Since this equipment is specifically described in Class 1, and Class 39 (former Class 29) does not include equipment that would otherwise be included in Class 1, the air conditioning system must be included in Class 1 not Class 39.
The types of equipment that were formerly included in Class 29 and with certain exception that are now included in Class 39 are described in paragraph 3 of IT-147R2.
Should you consider that this equipment is not a type described in Class 1 you may wish to provide officials of your local District Taxation Office with the facts and technical details of the equipment for their consideration.s
We trust these comments will be of assistance.
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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