Does a charity need GST/HST registration?

Charities have unusual GST/HST rules. The small-supplier threshold is higher than for businesses, most charity activities are exempt from GST/HST anyway, and the PSB rebate operates regardless of registration status.

The two charity tests

A charity is a small supplier — and does not have to register — if it passes either of two tests:

1. The taxable-supplies test. Taxable supplies were $50,000 or less over the four preceding calendar quarters (or in any single calendar quarter). This is the charity-specific small-supplier threshold — higher than the $30K threshold for businesses.
2. The gross-revenue test. Gross revenue from all sources was $250,000 or less in either of the two preceding fiscal years. A charity in its first two fiscal years is automatically a small supplier under this test.

Registration becomes mandatory only when the charity fails both tests. Passing either one is enough to stay a small supplier, subject to special rules such as taxable real property sales.

What’s “taxable” for a charity

Many charity activities are exempt from GST/HST under specific rules:

• Most fundraising activities (with conditions)
• Membership fees (typically exempt)
• Most program services delivered to beneficiaries
• Sales of donated goods (yard sales, donated items in thrift shops)

Taxable activities can include:

• Sales of new goods (a charity gift shop selling new merchandise)
• Commercial-style consulting or services
• Some sponsorships, depending on what the sponsor receives
• Bookstore-style sales not eligible for the donation-of-goods exemption

You don’t need to register to claim the PSB rebate

This trips up many small charities. The PSB rebate is available to all registered charities regardless of GST/HST registration. A small charity that has never registered can still file Form GST66 to recover the federal 50% rebate plus the provincial portion. There is no requirement to register first.

See also

• What is the GST/HST PSB rebate?
• PSB rebate calculator