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:
Whether an "all terrain vehicle" (ATV) is "automotive equipment" described in paragraph (a) of class 10 of Schedule II of the Income Tax Regulations (the Regulations).
Position:
Yes.
Reasons:
The phrase "automotive equipment" is interpreted broadly (we have previously stated that it includes outboard motors and air cushion vehicles known as hovercrafts). Given the ordinary meaning of the word "automotive", it is reasonable to conclude that an ATV is "automotive equipment" that is described in paragraph (a) of class 10 of Schedule II of the Regulations.
June 6, 2002
Edmonton Tax Services Office HEADQUARTERS
Ms. Arlene J. Morin Randy Hewlett, B.Comm.
Client Services Division 613-957-8973
2002-014136
Classification of an All Terrain Vehicle (ATV)
We are writing in response to your inquiry of May 16, 2002, regarding the above-noted issue. You request our view on whether an ATV is included in class 8 or class 10 of Schedule II of the Income Tax Regulations (the Regulations).
Your Views
In your letter, you indicated that an ATV "has four wheels, is self-propelled by a motor, and can be driven on a road or a highway although it is capable of being driven off road." In your view, an ATV is included in class 10 of Schedule II of the Regulations. In support of your view, you state that it "appears as if the CCRA is interpreting the term automotive equipment quite broadly". You indicate that paragraph 4 of Interpretation Bulletin IT-285R2 Capital Cost Allowance - General Comments, dated March 31, 1994, states that "automotive equipment in class 10 of Schedule II includes outboard motors and air cushion vehicles popularly known as hovercraft". Further, you noted that the "dictionary meaning of automotive is 'self propelling, of or relating to self propelling vehicles' (from Merriam Webster)".
Paragraph (a) of class 10 of Schedule II of the Regulations includes "property not included in any other class that is ... automotive equipment, including a trolley bus, but not including (i) an automotive railway car acquired after May 25, 1976, (ii) a railway locomotive, or (iii) a tramcar". In general terms, the CCRA has interpreted the phrase "automotive equipment" to have a broad meaning. For example, as you correctly point out, IT-285R2 indicates that it includes an outboard motor and a hovercraft. Consequently, we are in general agreement with your view that the ATV described above is included in class 10 of Schedule II of the Regulations, by virtue of paragraph (a) thereof.
For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the CCRA's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the electronic library version, or they may request a severed copy using the Privacy Act criteria, which does not remove client identity. You should make requests for this latter version to Mrs. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.
John Oulton, CA
Manager
Individual and Business Section
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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