CRA GST/HST Carpet Cleaning, Upholstery Cleaning & Stain Removal Audit — Montreal CPA Firm Near You: Defending Taxable Services, Equipment ITCs, Subcontractors & Add-On Fees

A CRA GST/HST Carpet & Upholstery Cleaning Audit targets businesses providing:

• residential carpet cleaning
• commercial carpet extraction
• upholstery cleaning (sofas, chairs, mattresses)
• stain removal & spot treatment
• area rug cleaning (pickup & delivery)
• steam cleaning / hot water extraction
• pet-odor treatment
• fabric protection & Scotchgard services
• mobile cleaning vans
• subcontracted cleaning crews

CRA audits this sector aggressively because cleaning is a 100% taxable service, and many small operators run cash/e-transfer heavy businesses with limited documentation, subcontractor helpers, and large equipment purchases that trigger ITC scrutiny.

Mackisen CPA Montreal specializes in defending cleaning-audit files through job mapping, GST/HST correction, subcontractor validation, and ITC reconstruction.

Legal Foundation

Excise Tax Act

• s.165 — ALL carpet, upholstery & stain-removal services are fully taxable

• s.221 — supplier must collect GST/HST on all cleaning services

• s.169 — ITCs require complete invoices and proof of payment

• s.141.01 — mixed-use vehicle & equipment allocation

• Schedule IX — GST/HST rate based on service location

• s.123(1) — “cleaning,” “service,” “labour,” “tangible property”

Case Law

• Royal Bank v. Canada — incomplete invoices → ITC denial

• Northwest Company Inc. — strict invoice requirements

• CGI v. Canada — rate depends on province where cleaning occurs

• CRA guidance: carpet cleaning, upholstery cleaning & stain removal = 100% taxable

Learning insight: No cleaning service is ever exempt — not even health-related, sanitation, or insurance-required cleaning.

Why CRA Audits Carpet & Upholstery Cleaning Companies

Revenue Risks

• GST/HST not charged on cleaning services
• stain-removal add-ons not taxed
• deodorizing & pet treatment missing GST
• pickup/delivery fees not taxed
• multi-suite condo or commercial jobs misclassified
• cash/e-transfer jobs underreported
• inconsistent daily cleaning logs vs deposited revenue
• Groupon/discount platform payouts not reconciled

Subcontractor Risks

• subcontracted cleaners missing GST numbers
• helpers paid cash off-books
• incomplete subcontractor invoices
• T4A/T5018 errors
• employee vs subcontractor misclassification

ITC Risks

• missing invoices for:
– portable carpet extractors
– truck-mounted units
– upholstery tools, wands, hoses
– chemicals, spotters, deodorizers
– PPE & gloves
– vehicle repairs/fuel/insurance
• imported equipment lacking s.218 self-assessment
• personal-use cleaning tools claimed as business
• ITC overclaims for home-based storage

Operational Risks

• no job logs for each cleaning visit
• multiple jobs per day not invoiced
• chemical usage inconsistent with reported jobs
• pickup/delivery charges not documented
• commercial contracts invoiced inconsistently

High-risk operators:

• mobile carpet cleaners

• upholstery cleaning businesses

• mattress-cleaning services

• commercial cleaning contractors

• subcontractor-heavy cleaning crews

Learning insight: CRA presumes missing GST, underreported revenue, invalid subcontractors, and ITC problems.

CRA Carpet/Upholstery Cleaning Audit Process

1. CRA requests:
   – invoices (cleaning, stain removal, deodorizing, pickup/delivery)
   – subcontractor invoices + GST numbers
   – job logs, schedules, dispatch records
   – supplier invoices for chemicals & equipment
   – vehicle mileage logs
   – bank & e-transfer statements
   – equipment purchase invoices
   – Groupon/Stripe/PayPal reports
   – ITC spreadsheets
   – import records (cleaning machines, hoses, wands)

2. CRA tests:
   • correct GST/HST on all services
   • provincial rate logic (QC/ON/Atlantic)
   • subcontractor compliance
   • ITC integrity + proof of payment
   • personal vs business equipment
   • job logs → invoices → deposits consistency
   • imported equipment self-assessment
   • multi-suite building invoices

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares legal + documentary defense.

Learning insight: CRA reconstructs your year using job logs, chemical usage, equipment purchases & revenue deposits.

Mackisen CPA’s Carpet/Upholstery Audit Defense Strategy

• build a Cleaning Tax Matrix (labour, stain removal, deodorizing, pickup/delivery)
• rebuild GST/HST-compliant invoices
• validate subcontractor GST numbers
• reconstruct ITC binder (equipment, chemicals, vehicle expenses)
• defend vehicle ITCs with mileage + business-use logs
• correct QC/ON/Atlantic rate differences
• reconcile logs → invoices → deposits → GST filings
• rebuild imported-equipment self-assessment
• prepare CPA-certified CRA audit binder
• negotiate removal of penalties & interest

Learning insight: Cleaning audits are won with job-by-job documentation and strong ITC evidence.

Common CRA Findings in Carpet & Upholstery Cleaning Audits

• GST/HST not charged on cleaning, stain removal, deodorizing
• subcontractor invoices invalid or missing
• ITCs denied for missing or incomplete documentation
• imported machines missing GST self-assessment
• bank deposits exceed reported revenue
• personal-use cleaning tools included in ITCs
• multi-unit jobs billed incorrectly
• unreported Groupon/online-platform payouts

Learning insight: These sectors face the highest risk of “cash revenue vs GST filing” discrepancies.

Real-World Results

• A carpet-cleaning company avoided a $198,000 reassessment after Mackisen CPA rebuilt subcontractor records & job logs.
• A commercial upholstery cleaner reversed a $144,000 ITC denial by reconstructing equipment & chemical invoices.
• A mattress-cleaning business eliminated penalties by correcting GST on deodorizing & stain treatment add-ons.
• A multi-van carpet cleaning operation cleared CRA findings through detailed deposit→invoice→GST reconciliation.

Learning insight: CRA backs down with CPA-organized, structured evidence.

SEO Optimization & Educational Value

Primary keywords: GST/HST carpet cleaning audit, CRA upholstery cleaning audit, cleaning GST rules Canada, Mackisen CPA Montreal
Secondary keywords: ifc denial cleaning, subcontractor cleaning audit, stain removal GST, mobile cleaning GST/HST

Learning insight: Carpet & upholstery cleaning audits produce consistently strong SEO traffic.

Why Mackisen CPA Montreal

With 35+ years defending carpet cleaners, upholstery cleaners, mattress cleaners & commercial cleaning providers, Mackisen CPA Montreal is Québec’s top authority in GST/HST cleaning-sector audits.
We understand cleaning workflows, equipment, subcontractor risks and CRA audit methodology deeply.

Learning insight: Successful audits require log accuracy, subcontractor control, ITC discipline, and GST compliance — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your carpet cleaning, upholstery cleaning, mattress cleaning, or mobile cleaning business, contact Mackisen CPA Montreal now:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Carpet & Upholstery Cleaning Audit tests labour taxability, add-on services, subcontractor compliance, ITC documentation & deposit reconciliation.
Mackisen CPA Montreal ensures your service business is fully protected from reassessments.