Are you a private campground owner or operator in Canada looking for ways how to navigate small business tax issues? Worry no more as Canadian Camping and RV Council’s Shane Devenish has authored a guide that will help campground owners across Canada.
Designed to assist small businesses, particularly those with five or fewer full-time employees year-round, this comprehensive guide sheds light on an often-overlooked tax provision that could significantly impact their bottom line.
Understanding the “small business deduction” (SBD) is essential for Canadian-Controlled Private Corporations (CCPC), including a large proportion of private campgrounds.
The SBD allows these small enterprises to access deductions on up to CA$500,000 of active business income. However, the rules around these tax breaks can be complicated, particularly for campground owners who often operate seasonally and struggle to maintain the five full-time employee threshold year-round.
Devenish’s guide provides a clear roadmap for navigating this complex landscape. It explains how campgrounds can still qualify as “active businesses” by demonstrating the provision of substantial additional services and amenities that are crucial for their operations.
The range of additional services can be broad, encompassing food preparation (room service), reservation services (concierge type services), entertainment offerings, Wi-Fi, free parking, and more.
The more comprehensive the services provided and their significance to the campground’s financial success, the greater the likelihood of the business qualifying for the SBD. This approach could also be applicable to other small lodging businesses with similar employee counts.
In a world where technology and online presence are increasingly important, the guide emphasizes the value of having a robust digital footprint.
Not only does an active online presence attract potential campers, but it is also crucial for informing the Canada Revenue Agency (CRA) about the range of services and amenities the campground offers.
Features such as a well-maintained website with detailed information, online booking functionality, and active social media engagement are instrumental in demonstrating the business’s active status.
Another crucial aspect Devenish covers is the strategy to avoid reassessment by the CRA. To achieve this, businesses need to offer significant additional services. These could range from traditional amenities like convenience stores, coin laundry facilities, and recreational areas to innovative ones like Euchre tournaments, yoga classes, and live music acts. These services not only enhance the customer experience but also contribute to the classification of the business as active rather than passive.
Importantly, the guide advocates seeking the help of a knowledgeable accountant familiar with the specifics of the campground industry and its tax rules. This expert advice will help campground owners understand and navigate the complex tax landscape to ensure they qualify for the SBD.
The guide is a significant tool for small campground businesses. It demystifies the process of claiming the small business deduction and provides practical steps to enhance eligibility for this tax break. In essence, it champions a strategic approach to business operation and taxation, including diversifying services, boosting online presence, and seeking professional advice.
This guide, highlighted by the BC Lodging & Campgrounds Association (BCLCA), ensures that the Canadian Camping and RV Council is steadfast in its commitment to supporting the continued success of the Canadian camping industry by providing valuable resources, advice, and support.
With this, Canada’s private campground owners can look forward to better navigating the complex terrain of tax deductions, ultimately ensuring their continued contribution to Canada’s vibrant outdoor industry.