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: For appointed members of a municipal committee, whether any portion of the honoraria received is considered non-taxable. As well, whether a reimbursement of parking expenses and a per-kilometre allowance is taxable.
Position: The entire amount of honoraria is taxable. In this situation the parking is also taxable, but the per-kilometre allowance is exempt.
Reasons: Paragraph 6(1)(c) of the Act requires that the honoraria be included in income. Since the members are not elected officials, the exemption in subsection 81(3) of the Act does not apply. The parking is taxable under paragraph 6(1)(a) of the Act because it relates to parking at a regular place of employment and is therefore, considered personal. The per-kilometre allowance is exempt under subparagraph 6(1)(b)(vii.1) of the Act because it relates to travel between the members' homes and various points of call that are not considered regular places of employment.
Randy Hewlett, B.Comm.
XXXXXXXXXX 613-957-8973
2002-018094
February 28, 2003
Dear XXXXXXXXXX:
Re: Honoraria & Reimbursement of Travel Expenses
We are writing in response to your letter of December 19, 2002, regarding a technical interpretation request on the above-noted issue, as it pertains to XXXXXXXXXX (the Committee). We also acknowledge additional information provided in your telephone conversation with Randy Hewlett on February 26, 2003.
Our understanding of the facts is as follows:
? The Committee is a XXXXXXXXXX, appointed by City Council to XXXXXXXXXX.
? The Members are not elected officials, but ordinary residents of the City that submit an application expressing interest in sitting on the Committee.
? The Members each receive a XXXXXXXXXX honorarium that is based on the number of meetings attended. The maximum annual amount is $XXXXXXXXXX for the Chairman, $XXXXXXXXXX for each of the XXXXXXXXXX Vice-Chairs and $XXXXXXXXXX for each of the XXXXXXXXXX other Committee Members.
? XXXXXXXXXX, Committee meetings were regularly held at XXXXXXXXXX, at which location the Members were reimbursed for parking costs incurred to attend the meetings. XXXXXXXXXX, the meetings were regularly held in XXXXXXXXXX where there is free parking for the general public.
? In addition to attendance at the regular meetings of the Committee, the Members are often required to perform site checks at XXXXXXXXXX locations that are the subject of Committee business. The Members are reimbursed $XXXXXXXXXX per-kilometre for travel between their homes and the various XXXXXXXXXX sites. The Members are not reimbursed for travel between their homes and the Committee meetings.
You inquire whether any portion of the honoraria is considered non-taxable. As well, you inquire about the taxable status of the parking reimbursement and the per-kilometre allowance.
We outline below our views for each of the items on which you request an opinion:
(a) Honorarium
In our view, the entire amount of honorarium received by each Committee Member must be included in employment income pursuant to paragraph 6(1)(c) of the Income Tax Act (the Act). As discussed, no portion of the honorarium will be excluded from employment income under subsection 81(3) of the Act, since the Committee Members are not elected municipal officers or elected officers of a municipal utilities board, commission, corporation, or similar body. For more information on the exemption under subsection 81(3) of the Act, see Interpretation Bulletin IT-292 Taxation of Elected Officers of Incorporated Municipalities, School Boards, Municipal Commissions and Similar Bodies.
(b) Parking
We are also of the view that the parking reimbursement for attendance at Committee meetings at City Hall is required to be included in income pursuant to paragraph 6(1)(a) of the Act. The reimbursement of parking costs at a regular place of employment under the circumstances described above is considered personal and therefore, constitutes a taxable employment benefit.
(c) Per-Kilometre Allowance
Paragraph 6(1)(b) of the Act requires that a taxpayer include in employment income all amounts received as an allowance for personal or living expenses by virtue of an office or employment. There are exceptions to this general rule, such as subparagraph 6(1)(b)(vii.1) of the Act, which exempts a reasonable allowance for the use of a motor vehicle received in respect of travelling in the course of performing the duties of an office or employment. When an employer requires an employee to proceed directly from home to a point of call other than the employer's place of business to which the employee reports regularly (or returns home from such a point), the travel is considered to be employment related. In our view, a XXXXXXXXXX site that is the subject of Committee business is not a regular place of employment for a Committee Member and therefore, the per-kilometre allowance for travel between the Committee Member's home and the XXXXXXXXXX sites is not taxable.
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
Policy and Legislation Branch
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