TaxCycle | Products | Pricing | Training | Documentation | Support | News

Building Permit - GIFI code

When entering an expense amount for a Building Permit is GIFI code 8760 (Business taxes, licenses, and memberships) the correct one to use?

Thank you kindly

Licenses makes the most sense.

A building permit implies something is being built or renovated. So, the project is either a capital asset or a repair & maintenance expense. Expenditures are allocated by the purpose, or the asset/expense to which they relate. A building permit is part of the cost of a capital asset or a repair project, no different than the materials & labour involved. But it’s certainly not a business tax or license.

2 Likes

Agree fully with @jhd.hemeon

… and if the Building Permit is being obtained by a contractor on behalf of a customer who has engaged them to construct or renovate a building, it would be a Cost of Sales item. :slightly_smiling_face:

1 Like

Business license, subscriptions, memberships, fees, etc are all viewed from the point of view of your own business operations and the fees associated with your professional and operational costs.

  • City Business License or Permit
  • Professional License
  • Professional Memberships
  • Professional Subscriptions
    etc.

If you are renovating your own building, then the permit would be cost of one of the following:-

  • Maintenance if simply repairing or maintaining an existing structure. There may be dollar value limits for maintenance vs capital cost depending upon the class or upon recent tax rulings.

  • Capital cost if renovating, changing, or upgrading an existing structure. In this case the class would vary depending on your ownership or rent status.

1 Like

To clarify, the temporary city building permit is for an event container and required because the container is over a certain sqft and on City property.
How would this cost be treated? Containers are on site for no more than a few days.

Here is an example, https://conterm.ca/en/container-applications/pop-up-kiosks/

Thanks kindly

For business, Tax reporting follows accounting reporting, being accounting reporting modified for tax rules.
In turn, accounting reporting is based on the underlying bookkeeping.

When the recording procedures are built from the ground up, the tax treatment follows.

I would examine the accuracy and appropriateness of the accounting…

1 Like

Thank you for all your responses!