15 March 1985 Income Tax Severed Letter 5-7381 - [850315]

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.

P.K. Tang (613) 995-1787

March 15, 1985 Dear Sirs:

This is in reply to your letter of February 1, 1985 wherein you request an "official ruling" as to whether or not the screening of a film in a public access theatre for the purposes of entering the Genie Awards would constitute "first commercial use" of the film under subsection 1104(2) of the Income Tax Regulations (the Regulations).

XXXX

As stated in paragraph 9 of IT-441 it is our position that the clause "day of its first commercial use" in subsection 1104(2) of the Regulations normally refers to the first day of commercial, theatrical or television showing of a film or tape, and the showing of a "sneak preview" or similar promotional use of the film in a limited market and limited period for market testing purposes will normally not be considered to represent first commercial use.

Therefore, in your situation, although the film was screened in public access theatres to the public at a charge it appears to us that the screening could be viewed as for promotional use rather than a commercial use since the screening was made only for the purpose of entering into the XXXX and it was made at non commercial hours. Further, at the time of the screening, it was yet an uncomplete film. Accordingly, we are inclined to agree with you that these screenings would not constitute "first commercial use" of the film for purposes of subsection 1104(2) of the Regulations.

Please note that the above represents merely an expression of opinion by us and is not a formal advance income tax ruling and is hence not binding on the Department.

Yours truly, ORIGINAL SIGNED BY

for Director Corporate Rulings Division Legislation Branch