15 September 2000 Internal T.I. 2000-0008807 - STANDBY CHARGE-MULTIPLE PLACES OF BUSINESS

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether use of employer provided vehicle between home and various store locations is personal in nature.

Position: Travel Personal

Reasons: Questions of Fact. However, we have previously taken the position that an employee can have more than one regular workplace. Since the employees visit each of the store on regular basis, each store is considered a regular place of business and thus travel to and from each store is considered personal.

							September 15, 2000

	XXXXXXXXXX  Tax Services Office	HEADQUARTERS
							Karen Power, CA
	Attention: XXXXXXXXXX 			(613) 957-8953

2000-000880

XXXXXXXXXX (the "Company")

We are replying to your facsimile of February 18, 2000, in which you requested our views on the use of automobiles by the Company's employees. The Company's views in this regard were set out in a letter to you dated February 17, 2000, which was enclosed with your memorandum.

Briefly, the facts, as we understand them, are as follows:

• Most employees who are required to use the Company's automobiles must travel significant distances to visit Company stores in their district.
• District managers ('DM') have a "home" store to which the DM regularly reports, i.e., the DM picks up mail or voicemail and uses the facilities at this store.
• XXXXXXXXXX do not report to a home store, since they are required for security reasons to maintain confidential information at their residences.
• In certain instances, a DM will go directly to a Company store in his or her district without first stopping at the home store or will return to his or her residence directly from a Company store in the district at the end of the day without stopping at the home store.
• The Company described the following districts, which it felt was a representative sample of all of the districts:

XXXXXXXXXX.

Company's views

It is the Company's view, based on the case of McDonald v. The Queen, 98 DTC 2151, that no portion of the distance from the DM's residence to the non-home stores is personal, and, accordingly, no portion of the kilometres should constitute a taxable benefit to the employee.

It is also the Company's view that all of the distances traveled by a XXXXXXXXXX to Company stores should be treated as personal travel, since the XXXXXXXXXX is required to maintain offices in his or her home for security reasons.

Our views

As stated in our letter to you dated October 28, 1999, we expressed the view that an employee may have more than one regular place of employment, and it is the nature of some employment situations that more than one location may be viewed as a regular workplace. We also stated our opinion, based on the information that had been provided at that time, that travel by the Company's employees from their homes to a Company facility would be considered personal, but travel between the Company's various facilities would probably be considered employment related.

The Company refers to the McDonald case (98 DTC 2151) for guidance, but it is our view that this case is of limited value since it was heard under the informal procedure. Nonetheless, we do note that Judge Rip provided the following comments:

"The characterization of the locations visited by an employee is important in determining advantage to the employee. This will largely be a matter of fact. One may want to consider the frequency to which a particular location is visited, its relation to the employee's home as opposed to the fixed work location, and the degree of traveling required by the employee regardless of the destination. In the case at bar, the logs indicate that the appellant traveled most workdays to multiple locations. Given the numerous places the appellant visited during the taxation years in issue, I am of the opinion that none of them can fairly be classified as "places of business to which the employee reports regularly". The word "regularly" means "... constantly ... steadily ...".

Judge Rip's statement therein that the characterization of the various locations visited by an employee is largely a matter of fact agrees with our approach in these situations. Accordingly, the question of whether or not travel by a DM or a XXXXXXXXXX from his or her personal residences to one of the Company's various locations should be treated as personal or employment-related must be based on the particular facts related to these work locations.

In the McDonald case, none of the work sites were considered as a place of business to which the taxpayer reported regularly. However, in our view, if a DM or XXXXXXXXXX reports with some regularity to all of the Company's different locations located in his or her particular region, as would appear to be the case from the excerpts of the travel logs provided, it is likely that these different work locations can be considered regular work locations. The fact that an employee has a home location to which he or she reports to more frequently than the others does not affect the status of the other work locations as regular work locations. Thus, the travel by any particular DM or XXXXXXXXXX between his or her home and any of these other regular work locations should likely be considered personal.

XXXXXXXXXX

Roberta Albert, CA
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch