GST/HST Info Sheet GI-110
September 2010

This info sheet explains how the rate increase in the provincial part of the Nova Scotia harmonized sales tax (HST) applies to sales of admissions and memberships that straddle the date the rate increase comes into effect.

Background information on the Nova Scotia HST rate increase

The Government of Nova Scotia announced that the rate of the provincial part of the HST increased from 8% to 10% on July 1, 2010. As a result, the combined HST rate increased from 13% to 15%, of which 5% represents the federal part and 10% the provincial part. Amendments to implement the rate increase have been published in the Nova Scotia HST Regulations, 2010.

Before determining whether HST at 13% or 15% applies to sales of admissions and memberships during the period that includes July 1, 2010, suppliers must first determine if the admission or membership is supplied in Nova Scotia. For information, refer to GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax - Place of supply rules for determining whether a supply is made in a province.

For purposes of this info sheet, "Nova Scotia" includes the Nova Scotia offshore area.

In the examples in this info sheet, all supplies are taxable and made in Nova Scotia, and all suppliers are GST/HST registrants. "Taxable" means subject to the HST.

Admissions

The following rules apply to sales of admissions to a place of amusement, a seminar, an event or an activity in Nova Scotia. In this info sheet, the term "event" means any of these places or activities.

To determine whether HST at 13% or 15% applies to sales of admissions to an event that takes place during the period that includes July 1, 2010, suppliers must consider:

• when the event to which the admission relates takes place;
• when an amount for the admission becomes due; and
• whether an amount for the admission is paid without having become due.

The Appendix to this info sheet contains information on when an amount becomes due and whether an amount is paid without having become due.

When 90% or more of the event takes place before July 2010

Regardless of when an amount becomes due or is paid without having become due, HST at 13% applies to any amount for the sale of an admission when 90% or more of the event to which the admission relates takes place before July 2010.

Suppliers account for the tax in their GST/HST returns according to the normal rules. The purchaser, if a registrant, would be able to claim any eligible input tax credit (ITC) according to the normal rules.

When more than 10% of the event takes place on or after July 1, 2010

The following rules apply when more than 10% of the event to which the admission relates takes place on or after July 1, 2010:

• Regardless of when the event takes place, HST at 13% applies to any amount that becomes due or is paid without having become due on or before April 6, 2010.
• Regardless of when the event takes place, HST at 13% applies to any amount that becomes due or is paid without having become due after April 6, 2010 and before May 2010. Certain purchasers have to self-assess the 2 percentage point increase in the provincial part of the HST. For more details on self-assessing, see the information under the heading "Self-assessing the 2 percentage point increase in the provincial part of the Nova Scotia HST".
• When an amount becomes due or is paid without having become due on or after May 1, 2010:
• HST at 13% applies to any amount that relates to the portion of the event that takes place before July 2010; and
• HST at 15% applies to any amount that relates to the portion of the event that takes place on or after July 1, 2010.

Suppliers account for the tax in their GST/HST returns according to the normal rules. The purchaser, if a registrant, would be able to claim any eligible ITC according to the normal rules.

Memberships

A membership includes a right granted by a club, organization or association that entitles its members to services provided by the club, organization or association, or to the use of its facilities, that are not available, or are not available to the same extent or for the same fee to other persons. It also includes a right that is conditional on the acquisition or ownership of a share, bond, debenture or other security.

To determine whether HST at 13% or 15% applies to sales of memberships where the membership period includes July 1, 2010, suppliers must consider:

• the membership period;
• when an amount for the membership becomes due; and
• whether an amount for the membership is paid without having become due.

The Appendix to this info sheet contains information on when an amount becomes due and whether an amount is paid without having become due.

For information on whether HST at 13% or 15% applies to lifetime memberships, see the information under the heading "Lifetime memberships".

When 90% or more of the membership period is before July 2010

Regardless of when an amount becomes due or is paid without having become due, HST at 13% applies to any amount for the sale of a membership when 90% or more of the membership period is before July 2010.

Suppliers account for the tax in their GST/HST returns according to the normal rules. The purchaser, if a registrant, would be able to claim any eligible ITC according to the normal rules.

When more than 10% of the membership period is on or after July 1, 2010

The following rules apply when more than 10% of the membership period is on or after July 1, 2010:

• Regardless of the membership period, HST at 13% applies to any amount that becomes due or is paid without having become due on or before April 6, 2010.
• Regardless of the membership period, HST at 13% applies to any amount that becomes due or is paid without having become due after April 6, 2010 and before May 2010. Certain purchasers have to self-assess the 2 percentage point increase in the provincial part of the HST. For more details on self-assessing, see the information under the heading "Self-assessing the 2 percentage point increase in the provincial part of the Nova Scotia HST".
• When an amount becomes due or is paid without having become due on or after May 1, 2010:
• HST at 13% applies to any amount that relates to the portion of the membership period that is before July 2010; and
• HST at 15% applies to any amount that relates to the portion of the membership period that is on or after July 1, 2010.

Suppliers account for the tax in their GST/HST returns according to the normal rules. The purchaser, if a registrant, would be able to claim any eligible ITC according to the normal rules.

Self-assessing the 2 percentage point increase in the provincial part of the Nova Scotia HST

Certain purchasers that are non-consumers have to self-assess the 2 percentage point increase in the provincial part of the HST when an amount that relates to the portion the event that takes place, or an amount that relates to the portion of the membership period that is, on or after July 1, 2010, becomes due or is paid without having become due after April 6, 2010 and before May 2010, and:

• more than 10% of an event takes place on or after July 1, 2010; or
• more than 10% of a membership period is on or after July 1, 2010.

This self-assessment rule applies to a person that is a sole proprietor, a business, an organization, a public service body, or any other entity.

A non-consumer that purchases an admission or a membership must self-assess the 2 percentage point increase in the provincial part of the HST if the non-consumer:

• does not purchase the admission or membership for consumption, use or supply exclusively (90% or more) in its commercial activity;
• is using a simplified accounting method to calculate its net tax;
• is purchasing an admission or membership that is subject to ITC recapture;
• is a charity that uses the net tax calculation method for charities; or
• is a registrant that is a selected listed financial institution.

The non-consumer accounts for the 2 percentage point increase in the provincial part of the HST:

• if a registrant, on line 405 of its GST/HST return for the reporting period in which the amount became payable; or
• in any other case, by completing FormGST489, Return for Self-Assessment for the Provincial Part of Harmonized Sales Tax (HST) and paying that amount on or before the last day of the month following the calendar month in which the amount became payable.

Lifetime memberships

The Canada Revenue Agency considers a lifetime membership to be a membership that entitles a member to rights in a club, organization or association during the member's life.

Special rules apply to lifetime memberships in a club, organization or association when an amount becomes due or is paid without having become due after April 6, 2010 and before July 2010. In this case, HST at 15% applies to the amount that exceeds 25% of the total amount for the lifetime membership.

Where the HST applies at 15% to an amount that becomes due or is paid without having become due after April 6, 2010 and before July 2010:

• the club, organization or association accounts for HST at 13% on the amount in its GST/HST return according to the normal rules; and
• the purchaser accounts for the 2 percentage point increase in the provincial part of the HST on the amount that exceeds 25% of the total amount for the lifetime membership:
• if a registrant, on line 405 of its GST/HST return for the reporting period in which the amount became payable; or
• in any other case, by completing Form GST489 and paying that amount on or before the last day of the month following the calendar month in which the amount became payable.

The purchaser, if a registrant, would be able to claim any eligible ITC according to the normal rules.

Appendix - When an amount becomes due or is paid without having become due

The following rules explain when an amount becomes due and when an amount is paid without having become due. These rules apply to supplies of services, tangible personal property, and intangible personal property.

Amount becomes due

Generally, an amount for a supply becomes due on the earliest of the following days:

• the date of an invoice for that amount for the supply;
• the day the supplier first issues that invoice for the amount;
• if there is an undue delay in issuing that invoice, the day the supplier would have issued the invoice; and
• the day the client is required to pay that amount under a written agreement (other than a written agreement for the supply of property by way of lease, licence or similar arrangement).

An amount for a supply of property made by way of lease, licence or similar arrangement under a written agreement becomes due on the day the client is required to pay that amount under the written agreement.
For information on what is a written agreement for GST/HST purposes, refer to GST Memorandum 300-6-4, Agreements in Writing.

Amount is paid without having become due

An amount is paid without having become due when a client pays an amount for a supply:

• before the date of an invoice or before a supplier issues, or would have issued, the invoice;
• before the client is required to pay the amount under a written agreement (other than a written agreement for the supply of property by way of lease, licence or similar arrangement) and no invoice has been issued; or
• before the client is required to pay the amount under a written agreement for the supply of property by way of lease, licence or similar arrangement.

More than one invoice or payment

Sometimes, more than one amount becomes due or is paid without having become due. This could happen when, for example, a supplier issues more than one invoice or when the client is required to make more than one payment under a written agreement. In this case, for each amount, the supplier must determine whether HST at 13% or 15% applies to that amount based on the applicable transitional rules for the Nova Scotia HST rate increase.