Taxi Business

Table of Contents

Administrative Policy

GST/HST Memorandum 28.3 Passenger Transportation Services July 2019

Restriction of definition to a business

83. The definition only applies to taxable supplies of passenger transportation services that are made in the course of a commercial activity. A person is considered to be making such supplies once the person starts providing commercial ride-sharing services, including commercial carpool services. A commercial activity generally means a business carried on by a person (and in the case of an individual, carried on with a reasonable expectation of profit), except to the extent to which the business involves the making of exempt supplies by the person. The definition does not apply to the part of a business that involves the operation of a sightseeing service or the school transportation of elementary or secondary students, a business or activity of a business prescribed by regulation (to date no business or activity has been prescribed), or the part of a business that does not involve the making of a taxable supply, such as an exempt supply or non-commercial ride-sharing, including non-commercial carpooling.

GST/HST Info Sheet GI-196 “GST/HST and Commercial Ride-sharing Services” June 2016

Extension of definition to commercial ride-sharing

To ensure that the GST/HST applies consistently to taxi services and commercial ride-sharing services, the definition of a taxi business has been amended effective July 1, 2017, to also include persons carrying on a business of transporting passengers for fares by motor vehicle within a municipality and its environs if the transportation is arranged or coordinated through an electronic platform or system, such as a mobile application or website.

The amended definition will only apply to taxable supplies of passenger transportation services that are made in the course of a commercial activity. You will be considered to be making such supplies once you start providing commercial ride-sharing services, including commercial carpool services.

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Tax Topics - Excise Tax Act - Section 148 - Subsection 148(1) 139