21 March 2001 External T.I. 2001-0073855 - EXT. CAB TRUCK REAR SEATS REMOVED

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 an extended cab truck, with rear seats removed, will be considered an automobile per the definition in subsection 248(1) of the Act.

Position: Where the rear seats of a pick-up truck have been removed, it is our general view that the vehicle would still be regarded as having a seating capacity for more than the driver and 2 passengers for the purposes of the definition unless the removal of the back seat could be said to have permanently altered the vehicle such that the folding seats could not easily be refitted into the vehicle.

Reasons: In the latter case, the vehicle would be excluded from the definition of "automobile" since it would have a seating capacity for not more than the driver and 2 passengers, assuming that the use requirement in subparagraph (e)(i) of the definition is also satisfied

XXXXXXXXXX 	J. Gibbons, CGA
		2001-007385
March 21, 2001

Dear XXXXXXXXXX:

We are replying to your letter dated February 23, 2001, in which you requested our views whether the vehicle described below would be considered an "automobile," as defined in subsection 248(1) of the Income Tax Act (the "Act").

As indicated in paragraph 22 of Information Circular 70-6R4 dated January 29, 2001, a request for a written opinion on a completed transaction is generally considered by a taxpayer's local tax services office. Accordingly, you may wish to submit all relevant facts and documentation to the appropriate Tax Services Office for their comments. However, we have provided the following general comments for your benefit.

Facts

• The vehicle is leased by XXXXXXXXXX (the "Taxpayer") for a term of 36 months.
• The vehicle is a XXXXXXXXXX truck with an extended cab and a flip-up bench seat in the rear of the cabin.
• In 2000, business-use of the vehicle was XXXXXXXXXX% and personal-use by an employee was XXXXXXXXXX%.
• Although the vehicle can seat more than the driver and two passengers if the rear bench seat is used, the rear seat has been permanently flipped up to accommodate storage in the rear of the cabin.
• The rear of the vehicle's cabin is used to store tools and materials that are routinely transported to job sites. These tools and materials include welding helmets, paint primer, touch-up paint, hand tools, grinders, mig welding machines, a hammer drill, a torch, a regulator and hose, a reciprocation saw, welding cables and extension cords.
• The vehicle is required by the Taxpayer to accommodate its storage and transporting requirement.
• The Taxpayer has recently removed the rear flip-up seat in the extended cabin and replaced it with storage shelves and hooks for transporting tools materials.

In your letter, you indicated that outside toolbox mounted in the box of a regular cab vehicle would not be a suitable alternative for two reasons:

i. Paints and primers in an outside toolbox would freeze in sub-zero temperature; and

ii. An outside toolbox would create unsafe driving conditions for a regular cab vehicle given the Taxpayer's business of transporting heavy loads of long steel products. An average steel railing is approximately 1000 pounds and 10 feet long. Because the installation of an outside toolbox in a regular cab truck would reduce the useable space in the vehicle's storage box to 5.5 feet, 80 percent of the load weight for the steel railings would fall behind the rear axle and create dangerous steering and load conditions.

The definition of "automobile" in subsection 248(1) of the Act refers to, in part, "a motor vehicle ... that has a seating capacity for not more than the driver and 8 passengers, but does not include ... a motor vehicle of a type commonly called a van or pick-up truck or a similar vehicle that has a seating capacity for not more than the driver and 2 passengers". Where the rear seats of a pick-up truck have been removed, it is our general view that the vehicle would still be regarded as having a seating capacity for more than the driver and 2 passengers for the purposes of the definition unless the removal of the back seat could be said to have permanently altered the vehicle such that the folding seats could not easily be refitted into the vehicle. In the latter case, the vehicle would be excluded from the definition of "automobile" since it would have a seating capacity for not more than the driver and 2 passengers, assuming that the use requirement in subparagraph (e)(i) of the definition is also satisfied.

In our view, an example of the "permanent" removal of rear seats would be where the space previously occupied by the rear seats is filled on a more or less permanent basis with another structure such as, for example, a shelving unit. However, it is our view that the removal of the seat would not be considered permanent if the seat may be easily reinstalled for the purpose of carrying additional passengers.

We trust that these comments will be of assistance.

Yours truly,

John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

??

- 2 -