Words and Phrases - "significant"
2 June 2015 Ruling 169081
The “Organization,” which is a "municipality" under para. (b) of “municipality” in s. 123(1) and, therefore, a "public sector body," charges membership fees to each member. Before finding that, as the members receive significant direct benefits by reason of their membership which exceed the allowable benefits listed in ss. 17(a) to (f), so that the Organization's supplies of memberships are not exempted, CRA referenced s. 17(e) as exempting “the right to receive a discount for property or services sold by the organization when the total value of all the discounts is insignificant (less than 30%) in relation to the membership fee,” and stated:
For example, a $100 membership fee provides members with a $5 discount for each of 10 admissions to the theatre ($50 discount). This membership would be taxable since the total value of the discounts is significant (30% or more) in relation to the membership fee whether or not the discounts are used.
CRA also stated:
A "benefit" is the right to any property or service of value regardless of the extent to which the right is actually exercised by individual members. All possible benefits accruing to members must be taken into consideration in determining the tax status of a membership.