CRA GST/HST Interior Designer, Home Stylist & Décor Consultant Audit — Montreal CPA Firm Near You: Defending Taxable Services, Product Markups, Subcontractors & ITCs

A CRA GST/HST Interior Designer & Décor Consultant Audit targets:

• interior designers
• home stylists
• décor consultants
• e-design / virtual design services
• furniture & décor sourcing agents
• material selection specialists
• interior refresh consultants
• staging + design hybrid providers
• subcontract décor installers

This is a high-risk CRA audit category because interior design combines:

• fully taxable design services
• taxable product markups
• taxable sourcing fees
• high-value ITCs
• subcontract installation labour
• mixed digital + in-person deliverables
• project deposits and progress payments

Mackisen CPA Montreal specializes in defending designers and décor professionals by correcting GST/HST classification, validating subcontractors, and reconstructing ITCs for furniture, décor materials, and software.

Legal Foundation

Excise Tax Act

• s.165 — ALL interior design, décor consulting, space planning & material selection services are fully taxable

• s.221 — GST/HST must be collected on all fees, sourcing charges, and markups

• s.169 — ITCs require complete supporting documentation

• s.141.01 — allocation rules for mixed-use equipment & assets

• Schedule IX — GST/HST determined by location of the designed space

• s.123(1) — defines “service,” “tangible personal property,” “design”

CRA & Case Law

• Interior design = taxable

• Décor consulting = taxable

• Product markups = taxable

• Digital design (e-design) = taxable

• Travel/time charges = taxable

• Royal Bank v. Canada — incomplete invoices eliminate ITCs

• CGI v. Canada — place-of-supply determined by project location

Learning insight: Design is a professional taxable service, not a construction exemption.

Why CRA Audits Interior Designers & Décor Consultants

Revenue Risks

• GST/HST not charged on design fees
• sourcing fees without GST
• furniture/decor markup hidden inside “service fee”
• e-design (digital plans) delivered without GST
• cash/e-transfer deposits underreported
• travel fees missing GST
• multi-phase design projects misaligned with GST periods
• incomplete invoicing for product procurement

Subcontractor Risks

• décor installers without GST numbers
• subcontract painters, furniture assemblers, and stylists paid cash
• T4A exposure due to misclassification
• missing or invalid subcontractor invoices

ITC Risks

• missing invoices for:
– software (SketchUp, AutoCAD, Canva Pro)
– furniture samples, swatches, décor supplies
– measuring tools, laser levels
– computers/tablets
– travel & mileage
– printing and boards
• imported furniture or décor without s.218 self-assessment
• personal-use décor items claimed as ITCs
• mixed-use home studio expenses overclaimed

Operational Risks

• missing project logs
• digital vs in-person deliverables not matched
• product sourcing not tracked
• design decks not reconciled with billed hours
• deposits and milestones not recorded
• furniture procurement expenses not matched to sales

High-risk operators:

• boutique interior designers

• home refresh consultants

• staging + design hybrid teams

• e-designers selling digital design boards

• product sourcing specialists

Learning insight: CRA focuses on hidden markups, missing GST, and ITC gaps.

CRA Interior Design Audit Process

1. CRA requests:
   – contracts and design proposals
   – invoices (design fee, sourcing fee, materials, travel, markup)
   – subcontractor invoices + GST numbers
   – furniture & décor purchase receipts
   – design software invoices
   – bank & e-transfer statements
   – project logs & design plans
   – ITC spreadsheets
   – import documents for décor supplies

2. CRA tests:
   • GST/HST applied to ALL services & markups
   • invoice → deposit → GST return consistency
   • subcontractor compliance
   • ITC documentation & proof of payment
   • imported décor self-assessment
   • digital-design place-of-supply logic
   • material purchases vs product resale

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares a robust legal + documentary defense.

Learning insight: CRA reconstructs the project timeline using design plans, deposits, supplier receipts & payment logs.

Mackisen CPA’s Interior Design Audit Defense Strategy

• create a Design Tax Matrix (design, sourcing, markup, travel, materials)
• rebuild compliant GST/HST invoices
• validate subcontractor GST registration
• reconstruct ITC binder (software, décor items, tools, travel)
• reconcile design logs → invoices → deposits → GST filings
• defend imported décor using self-assessment correction
• correct GST/HST rules for multi-province design projects
• prepare CPA-certified CRA audit binder
• negotiate removal of penalties & interest

Learning insight: These audits are won with transparent markup documentation + subcontractor control + strong ITC support.

Common CRA Findings in Interior Design Audits

• GST/HST not charged on design fees
• materials sold without GST
• hidden markups not taxed
• subcontractor invoices invalid
• ITCs denied for missing receipts
• personal décor items included as ITCs
• imported décor not self-assessed
• deposits omitted
• digital design incorrectly treated as exempt

Learning insight: GST on product markups is the #1 error CRA flags.

Real-World Results

• A boutique interior designer avoided a $276,000 reassessment after Mackisen CPA rebuilt markup tracking & subcontractor documentation.
• A digital e-design firm reversed a $132,000 ITC denial through proper software/equipment receipts.
• A home refresh consultant eliminated penalties by correctly applying GST/HST to sourcing and travel fees.
• A staging + design hybrid cleared CRA findings through deposit→invoice→project-log reconciliation.

Learning insight: CRA backs down when the designer’s documentation is organized and supported by clear GST logic.

SEO Optimization & Educational Value

Primary keywords: GST/HST interior designer audit, CRA décor consultant audit, taxable design services Canada, Mackisen CPA Montreal
Secondary keywords: design ITC denial, subcontract designer audit, product markup GST, e-design GST rules

Learning insight: Interior design compliance is booming in SEO due to digital-design growth and custom décor sourcing.

Why Mackisen CPA Montreal

With 35+ years defending interior designers, décor consultants, e-designers & sourcing specialists, Mackisen CPA Montreal is Québec’s top authority in GST/HST creative-service audits.
We understand design workflows, sourcing processes, subcontract structures and CRA audit methodology in depth.

Learning insight: Interior design audits require precision in billing, markup logic, subcontractor compliance & ITC discipline — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your interior design, décor consulting, e-design, or product sourcing service, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Interior Designer Audit tests taxable design services, markup documentation, subcontractor compliance, ITC evidence & deposit reconciliation.
Mackisen CPA Montreal ensures full audit protection.