Inspection of Tourist Accommodation Establishments

Source and warning

This content is an independent and unofficial reformulation of Revenu Quebec publication IN-259(2023-09).pdf . It is provided for information purposes only and does not constitute legal, tax, or professional advice. For any decision, refer to the official document.

Who this document is for

This document is intended primarily for persons who operate a tourist accommodation establishment in Quebec. It applies in particular to operators who offer, for rent, for payment and for a maximum period of 31 days, at least one accommodation unit intended for tourists, such as:

• a bed;
• a room;
• a suite;
• an apartment;
• a house;
• a cottage;
• a ready-to-camp unit;
• a camping site. The document also applies to persons who administer or take charge of activities related to the operation of such an establishment, whether or not they are owners.

Context and purpose

Revenu Quebec regularly carries out inspections and other tax compliance activities in order to verify that the rules applicable to tourist accommodation establishments are respected.

The publication explains how Revenu Quebec frames its inspection activities in this sector. It also specifies:

• the role of inspectors;
• the obligations of tourist accommodation establishment operators;
• the rules related to the registration of these establishments;
• the obligations relating to the lodging tax;
• the possible obligations in respect of GST and QST;
• inspectors' rights of access and verification;
• conduct that may result in fines or penalties. The publication states that it is provided for informational purposes only. The information it contains must not be considered a legal interpretation of the Taxation Act or of any other law.

Full and detailed information

Inspections and compliance activities

Revenu Quebec carries out inspections and other tax compliance activities in the tourism sector to ensure that tax obligations and applicable rules are respected. These inspections may take place:

• throughout the year;
• in the various tourist regions of Quebec;
• in the tourist accommodation establishments concerned. Inspectors may show up at a tourist accommodation establishment without a prior appointment, provided that the visit takes place at a suitable time. During an inspection, inspectors may in particular:
• verify whether the applicable laws are being respected;
• observe the operator's working methods;
• observe staff practices;
• collect information;
• request access to records;
• request to examine supporting documents related to those records.

Definition of an accommodation establishment operator

In this publication, the expression accommodation establishment operator means the

person who carries out activities relating to the operation of the establishment. In general, this is the person who:

• administers an accommodation unit;
• maintains that unit;
• takes care of its rental;
• handles advertising;
• takes charge of the routine repairs related to the establishment. This person may be:
• the owner of the establishment;
• another person to whom these responsibilities have been assigned.

Definition of a tourist accommodation establishment

A tourist accommodation establishment is an establishment where at least one accommodation unit is offered for rent to tourists, for payment, for a period not exceeding 31 days. The accommodation units mentioned in the document include in particular:

• a bed;
• a room;
• a suite;
• an apartment;
• a house;
• a cottage;
• a ready-to-camp unit;
• a camping site.

Terminology under the applicable regimes

The publication specifies that there is a difference in vocabulary depending on the legal or tax framework used:

• under the lodging tax regime, the expression used is accommodation establishment;
• under the Tourist Accommodation Act and its regulation, the expression used is tourist accommodation establishment. To simplify matters, the publication generally uses the expression tourist accommodation establishment.

Registration of the establishment

Except in exceptional cases, anyone who operates a tourist accommodation establishment must meet several registration-related obligations. The operator must:

• have the establishment registered with the Minister of Tourism or with a body recognized by that minister;
• pay the fees required at the time of registration;
• pay the fees required upon annual renewal of the registration;
• provide the establishment registration certificate to any digital accommodation platform through which a rental offer is posted;
• display the registration certificate in a manner visible to the public;
• place this certificate at the main entrance of the establishment;
• if the establishment is located in a building containing several dwelling units, place the certificate at the main entrance of the building;
• indicate the establishment registration number in any advertisement;
• indicate the certificate expiration date in any advertisement;
• include this information in advertisements posted on the Internet, whether or not the site is transactional.

Registration certificate

The registration certificate must be displayed so that it is visible to customers. According to the elements mentioned in the publication, this certificate indicates in particular:

• the registration number;
• the civic address;
• the name of the establishment;
• the category of the establishment.

Advertising and websites

When an operator promotes their tourist accommodation establishment, they must include certain mandatory information. In any advertisement used to promote the establishment, as well as on any website related to its operation, the operator must clearly indicate:

• the registration number;

• the name of the establishment, where applicable;

• the certificate expiration date, according to the obligations described in the registration section. This requirement applies to websites whether or not they allow a transaction to be completed.

Lodging tax

The lodging tax may apply when an accommodation unit is rented. It applies when the unit is located in an accommodation establishment that is:

• either a general tourist accommodation establishment;
• or a principal residence establishment. To be covered, the establishment must also be located in a tourist region where the lodging tax applies. The publication specifies that youth tourist accommodation establishments are not subject to this tax. When the lodging tax applies, the operator must:
• register for the lodging tax file;
• collect the tax from their client;
• remit this tax to Revenu Quebec. The publication mentions that additional information is presented in publication Lodging Tax (IN-260).

Exception to registration for the lodging tax file

An accommodation establishment operator does not have to be registered for the lodging tax file if all of the following conditions are met:

• they offer their accommodation units only through digital accommodation platforms;
• these platforms are operated by persons already registered for the lodging tax file;
• these platforms receive all amounts paid in consideration for renting the units. In this situation, the obligation to collect, report and remit the lodging tax belongs to the persons operating the digital accommodation platforms.

Registration for GST and QST files

As a general rule, a person who rents taxable accommodation units must register for the GST and QST files. This obligation may apply regardless of the means used to rent the units, including:

• through a digital platform;
• through another rental method. However, a person is generally not required to register for the GST and QST files if they are considered a small supplier.

Small supplier

The publication specifies that a small supplier is generally a person whose total taxable sales do not exceed $30,000:

• in a given calendar quarter;
• nor for all of the four preceding calendar quarters. To determine this total, taxable sales made worldwide by the following must be taken into account:
• the person themselves;
• their associates. Capital property sales are not included in this total. The publication gives the sale of a building as an example.

Special cases and exceptions

Consent required to enter a residence

An inspector who wishes to enter a residence must obtain the occupant's consent. This requirement is separate from the inspector's power to enter, at a suitable time, a place related to the operation of a tourist accommodation establishment or to the keeping of business records.

Youth establishments excluded from the lodging tax

Youth tourist accommodation establishments are not subject to the lodging tax under the publication.

Exception for certain rentals made only through a digital platform

An operator does not have to register for the lodging tax file when their units are offered exclusively through digital accommodation platforms that meet the following conditions:

• the persons operating these platforms are registered for the lodging tax file;
• these platforms collect all amounts paid for the rental of the units. In this case, it is the platform operators who must collect, report and remit the tax.

Small supplier for GST and QST

Registration for the GST and QST files is generally not required when a person is a small supplier. The threshold mentioned is $30,000 in taxable sales, calculated according to the following rules:

• the threshold must not be exceeded during a given calendar quarter;
• it must also not be exceeded for all of the four preceding calendar quarters;
• the calculation includes the person's worldwide taxable sales and those of their associates;
• capital property sales, such as a building, are excluded.

Difference between the expressions used

The publication draws attention to the use of two similar expressions associated with different frameworks:

Expression	Context of use
Accommodation establishment	Lodging tax regime
Tourist accommodation establishment	Tourist Accommodation Act and its implementing regulation
The publication usually uses the expression tourist accommodation establishment.

English publication available

The publication states that an English version exists under the title Inspections of Tourist Accommodation Establishments (IN-259-V).

Steps and procedures

When an establishment must be registered

The operator must follow the following steps and obligations, except in exceptional cases:

1. Have the establishment registered with the Minister of Tourism or a body recognized by that minister.
2. Pay the fees required for registration.
3. Renew the registration annually.
4. Pay the fees required upon each annual renewal.
5. Provide the registration certificate to any digital accommodation platform used to post a rental offer.
6. Display the registration certificate in public view:

• at the main entrance of the establishment;
• or, if the establishment is located in a building containing several dwelling units, at the main entrance of the building.

7. Indicate in any advertisement:

• the registration number;
• the certificate expiration date.

8. Include this information in advertisements posted on the Internet, whether or not the site is transactional.

When an establishment is subject to the lodging tax

If the lodging tax applies, the operator must:

1. Register for the lodging tax file.
2. Collect the tax from the client.
3. Remit the tax to Revenu Quebec. This obligation applies to accommodation establishments that are:

• general tourist accommodation establishments;
• or principal residence establishments; and that are located in a tourist region where the lodging tax applies.

When a digital-platform-related exception applies

The operator does not have to register for the lodging tax file if:

1. all of their accommodation units are offered only through digital accommodation platforms;
2. the persons operating these platforms are registered for the lodging tax file;
3. these platforms receive all amounts paid for the rental. In this situation, the operators of the digital platforms take responsibility for:

• collecting the tax;
• reporting the tax;
• remitting the tax to Revenu Quebec.

When a person rents taxable accommodation units

A person who rents taxable accommodation units must generally:

1. determine whether they are required to register for the GST and QST files;
2. take into account their taxable sales and those of their associates worldwide;
3. check whether they exceed the threshold of $30,000:

• in a given calendar quarter;
• or in all of the four preceding calendar quarters;

4. exclude capital property sales from the calculation, such as the sale of a building. If they are a small supplier, they are generally not required to register.

How an inspection is conducted

When an inspector appears at a tourist accommodation establishment, the operator or their representative must, upon request, cooperate with the inspection. The operator or their representative must allow the inspector to enter, at any suitable time, any place where:

• the business is operated;
• property is kept;
• business activities are carried out;
• records are kept;
• records should be kept. The operator or their representative must also:
• allow the inspector to examine the records;
• allow the supporting documents related to those records to be examined;
• provide access to documents in their original form or storage medium, whether paper or electronic;
• provide all documents requested by the inspector for the purposes of the inspection;
• provide all information requested by the inspector for the purposes of the inspection;
• give the inspector any reasonable assistance needed during the inspection. The operator or their representative must never interfere with the inspector's work.

Important warnings

Obstructing an inspector's work

The operator or their representative must in no way prevent, hinder or interfere with an inspector's work during an inspection.

Access to residences

Even though an inspector may enter certain places related to the operation at a suitable time, they must obtain the occupant's consent to enter a residence.

Offences that may result in fines

Certain omissions or actions by an operator may constitute offences and lead to fines. The publication gives the following examples.

Operating without proper registration

An operator commits an offence if they operate a tourist accommodation establishment without it being registered in accordance with the Tourist Accommodation Act.

Operating despite a refused, suspended or cancelled registration

An operator may be penalized if they operate a tourist accommodation establishment when the registration for that establishment has been:

• refused;
• suspended;
• cancelled.

Failing to display the registration certificate

An operator may be in violation if they do not display the establishment registration certificate:

• at the main entrance of the establishment;
• or, in the case of a building containing several dwelling units, at the main entrance of the building;
• in a manner visible to customers. The certificate must in particular indicate:
• the registration number;
• the civic address;
• the name of the establishment;
• the category of the establishment.

Failing to properly indicate the registration number or name in advertising

An operator may be penalized if they do not clearly indicate:

• the registration number;
• and, where applicable, the name of the tourist accommodation establishment; in:
• an advertisement promoting the establishment;
• a website used in connection with the operation of the establishment.

Making a false statement

An operator commits an offence if they make a false statement in a document provided for by law.

Providing a false or inaccurate document

An operator may be penalized if they provide a document that is:

• false;
• inaccurate;
• or that they should have known was inaccurate.

Transferring the registration to another person

An operator may not transfer the registration of their tourist accommodation establishment to another person.

Failing to hold the required civil liability insurance

An operator may be in violation if they do not take out or maintain in force a civil liability insurance policy that meets the requirements. The publication specifies that this insurance must:

• be for at least $2 million per event;
• guarantee compensation for bodily injury or property damage;
• cover damages caused in the course of operating the establishment.

Using an invalid registration number in an accommodation offer

An operator may be penalized if they enter into an accommodation offer a registration number that is:

• false;
• inaccurate;
• expired.

Failing to provide required information or a required document

An operator commits an offence if they fail to provide information or a document required by the Tourist Accommodation Act.

Continuing to display or use a sign

An operator may be penalized if they do not stop displaying or using their sign in their advertising or promotion.

Limited scope of the publication

The publication specifies that its content is for information only. It does not constitute a legal interpretation of the Taxation Act or of any other law.

Summary

Revenu Quebec carries out inspections in tourist accommodation establishments in Quebec in order to verify compliance with the applicable tax rules and obligations. A tourist accommodation establishment is a place where at least one unit, such as a room, cottage, apartment or camping site, is rented to tourists for payment for a period of no more than 31 days. Except in exceptional cases, the operator must have the establishment registered, pay the required fees, display the registration certificate and indicate the registration number as well as the certificate expiration date in its advertisements, including on the Internet. When the lodging tax applies, the operator must generally register for that tax file, collect it from the client and remit it, unless all rentals are made only through registered digital platforms that collect the amounts. Renting taxable accommodation units generally creates an obligation to register for the GST and QST files, except for small suppliers whose taxable sales generally do not exceed $30,000 according to the prescribed periods. During an inspection, the operator must provide access to the relevant places, records and supporting documents, provide the requested information and cooperate reasonably, without obstructing the inspector's work. An inspector must nevertheless obtain the occupant's consent to enter a residence. Several failures, including operating without registration, the absence of civil liability insurance of at least $2 million per event, the use of a false or expired registration number, or the submission of inaccurate documents, may constitute offences punishable by fines.