Principal Issues: Will business income earned from the hauling of material both on and off reserve, be exempt from income tax where it is earned by a status Indian living on reserve?
Position: In this particular case, yes
Reasons: Based on the relevant connecting factors, the business income earned by the taxpayer is determined to be strongly connected to the reserve because all of the customers are located on reserve and the majority of the hauling activities are performed either to the reserve or from the reserve such that the business income would be considered tax-exempt for purposes of paragraph 81(1)(a) of the Income Tax Act.