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.
Principal Issues: Should payments from a school board to compensate parents for the cost of transporting their children to school, in communities that have discontinued school bus service, be considered taxable?
Position: No
Reasons: The compensation to be received by parents is not income from a source for purposes of the Act
March 2, 2004
HEADQUARTERS HEADQUARTERS
Iindividual Programs CSD Shaun Harkin, CMA
Attention: Ms. Lara Castaneda
2003-005416
Technical Interpretation Request: Payments from school board
This is in reply to your facsimile of December 23, 2003 wherein you request our view on whether payments from a school board to compensate parents for the cost of transporting their children to school are taxable.
Your letter explains that parents, in communities that have discontinued school bus service, are compensated twenty cents per kilometer to a maximum of $19 a day for the cost of transporting their children to school. For special needs children, parents are compensated the cost of the equivalent taxi rate.
Written confirmation of the tax consequences inherent in a particular transaction or series of transactions are given by this Directorate only where the transaction(s) are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. Notwithstanding the foregoing, we are prepared to provide the following comments.
The Income Tax Act (the "Act") taxes income by source, such as employment, office, business and property. Since the compensation to be received by parents is not income from a source for purposes of the Act, it will not be subject to income tax.
We trust that these comments will be of assistance.
Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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