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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
CCA classification of gas, hydro and water meters used in the normal business of the distribution of the gas, hydro and water.
Position TAKEN:
Class 1.
Reasons:
Distribution equipment used by distributors of the commodities.
XXXXXXXXXX 2001-010433
T. Young, CA
January 14, 2002
Dear XXXXXXXXXX:
Re: Capital Cost Allowance (CCA) Classification of Hydro, Gas and Water Meters
We are writing in reply to your letter of October 2, 2001, concerning the classification of hydro, gas and water meters used in the normal business of the distribution of electricity, natural gas and water. In your view, the meters would be included in Class 8 under paragraph (i).
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R4, Advance Income Tax Rulings, dated January 29, 2001. However, we are prepared to provide the following comments, which may be of assistance to you.
Paragraphs (m), (n) and (o) of Class 1 in Schedule II of the Income Tax Regulations (the Regulations), property of this class includes property not included in any other class that is:
(m) the generating or distributing equipment and plant (including structures) of a producer or distributor of electrical energy;
(n) manufacturing and distributing equipment and plant (including structures) acquired primarily for the production or distribution of gas, except
(i) a property acquired for the purpose of producing or distributing gas that is normally distributed in portable containers,
(ii) a property acquired for the purpose of processing natural gas, before the delivery of such gas to a distribution system, or
(iii) a property acquired for the purpose of producing oxygen or nitrogen;
(o) the distributing equipment and plant (including structures) of a distributor of water;
Therefore, in our view, hydro, gas and water meters used in the normal business of the distribution of electricity, natural gas and water are Class 1 assets.
We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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