4 February 1992 Income Tax Severed Letter 2000106 - Municipal Officer's Expense Allowance

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.

February 4, 1992

Gerald Zagrosh                         Source Deductions
Source Deductions Section                Division
Edmonton District Office               D.O./T.C. Support
                                         Services Section
                                       E. Hammond
                                       (613) 954-1304

                                       HAK-4903-9-0

Subsection 81(3) I.T.A. - Municipal Officer's Expense Allowance

As requested, this is further to our recent telephone conversations concerning the above-noted matter.

As I understand it, you have been asked to clarify the income tax implications of a per kilometre allowance received by a municipal officer for travel relating to the duties of his office. The municipal officer is not required to report to any particular establishment, but rather travel between his residence and various other locations.

As a general rule, travel between one's residence and work location is considered to be personal travel. An exception arises where the employer requires,, or allows, the employee to proceed directly form home to a point of call other than a settled workplace, or return home from such a point. Such trips are considered to be employment-related rather than personal driving, and any reasonable allowance paid in connection with such milage is consider to be non-taxable pursuant to subparagraph 6(1)(b)(vii.1).

With respect to municipal officers specifically, as indicated in TOM 36(18)2(1), travel to and from school board, council meetings, etc., is considered to be personal travel. Any allowance paid in connection with such travel is taxable pursuant to paragraph 6(1)(b) and would be considered as "other remuneration" for purposes of subsection 81(3). Therefore, it is necessary to determine the exact nature of the allowance received by the municipal officer. If, based on the circumstances, the allowance is not considered taxable by virtue of subparagraph 6(1)(b)(vii.1), it would also not be considered for purposes of calculating the exempt portion provided for by subsection 81(3).

I hope you will find the foregoing comments to be of assistance.

Eric Hammond Policy and Legislation Officer D.O./T.C. Support Services Section Source Deductions Division