Revenue Management Practices
Applications of Sales Tax to External Revenue Sources
Following the audit in the 2015/2016 fiscal year, it was noted that the College had several transactions with misclassified tax exemptions. Various external revenue sources were noted across all academic departments which may have been misclassified as tax exempt during the invoicing and/or deposit process.
Below are examples of the most noted occurrences and a general guide to follow when trying to determine the tax eligibility of revenue sources as provided by the Controller’s Office. For a general list of the tax eligibility of external revenue, please view the “University of Guelph HST Status Table for Sales to External Parties”. [Financial Services → HST → HST Status Table]
For more complex transactions, or if any additional information is required, please contact: email@example.com or Mark Torcoletti in the Dean’s Office.
Admission Fees for Professional Events
Professional events include but are not limited to; Performances, Athletic events (where the athletes are being paid), Graduation, Convocation, Speeches and Forums. Admission fees to these events are subject to taxation unless they qualify as a direct cost recovery. Direct cost recovery can not include the overhead costs or the salaries of staff involved. Example: A speaker is being paid to give a speech to paying guests. Since the speaking is being paid, this classifies as a professional event in which case the revenue collected from guests is subject to taxation.
Admission Fees for Amateur Events
Amateur events include events in which the competitors are not receiving pay. Admission fees to these events are exempt from tax. Example: Tickets are sold to watch the finale game of an intermural league. The players are unpaid and do not classify as professional, therefore the revenue from the event is not subject to taxation.
Sale of Lab Manuals
Lab/classroom manuals and supplies such as lab coats that are sold to students for various courses are subject to taxation unless they qualify as a direct cost recovery. Direct cost recovery cannot include the overhead costs or the salaries of staff involved. Example: Lab manual is sold for a first year course at cost plus a markup and therefore would be subject to tax.
Equipment rentals include but are not limited to; AV Equipment, Laboratory, Musical Instruments, and Furniture. All equipment rentals fees are taxable. But if the rental is to another internal department, the rental is an internal transfer rather than a sale. Example: A laptop and projector are rented for two days for an event by an external party. The rental would be taxable because all equipment rentals are taxable.
Space / Room Rentals
Space/Room rentals are taxable depending on the length of the rental
If the space is rented for less than 30 days, the rental is taxable
If the space is rented for 30 or more days with continuous occupancy, the rental is tax exempt
In addition, if the user is an internal department, the rental is an internal transfer rather than a sale. Example: A conference room is booked for 2 consecutive months by the same party maintaining continuous occupancy. The rental would be tax exempt due to the rental being longer than 2 months.
Camps are tax exempt depending on two different factors; Children’s age, and the time activities take place
If the camp has overnight supervision, it is taxable
If the camp does not have overnight supervision, see below
Tax exemption is granted if the majority (50%+) of children are 14 years of age or younger
The camp is subject to taxation if the majority (50%+) of children are over 14 years of age
Example: A camp is offered every Monday afternoon over a six-week period for children between the ages of 7 and 10. The camp is tax exempt because it is offered to children 14 years of age or under and there is no overnight supervision. Example: A camp is offered for one week to children aged 10-13. Students arrive on Monday morning and depart on Sunday afternoon. Although the majority of children in the camp are under the age of 14, the camp is subject to taxation because it offers overnight supervision.