6 October 1997 GST/HST Interpretation HQR0000736 - Registration of Taxi Owner/Operators in

                                                                        GST/HST Rulings and
 Interpretations Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Road
Vanier, Ontario
 XXXXX                                                                                K1A 0L5

Dear XXXXX

Thank you for your e-mail of June 12, 1997 concerning whether or not taxi owners and operators in XXXXX are required to be registered pursuant to subsection 240(1.1) of the Excise Tax Act (ETA).

Interpretation Requested

You wish to know whether taxi owners and operators who are small suppliers in XXXXX fall within the definition of "taxi business" found in subsection 123(1) of the ETA and are therefore required to be registered pursuant to subsection 240(1.1) of the ETA. In particular, you wish to know whether the fares charged in XXXXX XXXXX can be considered to be regulated under the laws of Canada or a province, as required in the definition of "taxi business" found in the ETA.

Our understanding of the relevant facts is the following:

 XXXXX

 XXXXX

 XXXXX

 XXXXX

 XXXXX

Interpretation Given

Based on the information provided, taxi owners and operators in XXXXX who are engaged in a business of transporting passengers by taxi for fares are carrying on a "taxi business" as that term is defined in the ETA. Such taxi owners and operators in XXXXX are therefore required to be registered under subsection 240(1.1) the ETA.

The definition of "taxi business" found in subsection 123(1) of the ETA requires that the taxi owner or operator charge fares that are "regulated under the laws of Canada or a province." Here, the province of XXXXX has delegated its authority to regulate taxi fares to XXXXX XXXXX When a province delegates its power to regulate fares to municipalities, this is considered to be the regulation of fares "under the laws of ... a province", as required. This is because in enacting such delegating legislation, the province has exercised its power to regulate taxi fares.

Thus taxi fares in XXXXX are considered to be regulated under the laws of a province whether or not the City has passed a by-law on the subject of taxi fares. Similarly, taxi fares in XXXXX are regulated under the laws of a province whether or not the local taxicab association determines the fares charged by its taxis in XXXXX

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at 613 954-8253.

Yours truly,

Gregory Smart
A/Rulings Officer
Industries Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate

Legislative References: s. 123, "taxi business", s. 240(1.1)

NCS Subject Code(s): 12000-3