10 November 1994 External T.I. 9426395 - EMPLOYER-PROVIDED PARKING

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 Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

taxability of employer-provided parking

Position TAKEN:

Question of fact. Should have local district office review.

Reasons FOR POSITION TAKEN:

Employer-provided parking is a taxable benefit pursuant to 6(1)(a). Departmental position is that if a value can be determined it should be included in income.

			942639
XXXXXXXXXX	D. Zion

November 10, 1994

Dear XXXXXXXXXX:

Re: Employer-Provided Parking

We are writing in response to your letter of July 21, 1994 a a copy of which you recently forwarded to us by registered mail. Unfortunately, as we advised you in our November 7, 1994 telephone conversation (Zion/XXXXXXXXXX), we had not received your original correspondence.

You have outlined a situation where an employer owns a parking garage which is open to both its employees and members of the public. Parking is provided free of charge by the employer to senior management. You have advised us that parking spaces are available on a first-come, first-served basis as the number of spaces available will be dependent on the number of people from the general public making use of the facility for social events on a given day. We are unable to determine from the information provided whether employees other than senior management of the employer have access to the parking spaces nor whether the employer regularly charges its employees, or the general public, using the parking spaces at its parking garage.

As discussed in the above-noted telephone conversation, the above circumstances relate to an existing situation. For the purposes of obtaining the Department's position on such situations, you should contact your local District Taxation Office. In this regard, as you requested, we have forwarded your correspondence to the Toronto District Office for their consideration and reply. As also agreed, however, we are prepared to provide you with the following general comments.

Our Comments

Where an employer provides parking facilities to its employees at a cost to the employee that is less than the market value, a benefit is conferred on the employee that is taxable under paragraph 6(1)(a) of the Income Tax Act (the "Act") unless the parking is provided for business purposes (i.e., employees are required to use their automobiles on a regular basis in carrying out their employment duties).

Although it is the Department's practice not to assess a benefit in those situations where the value of the parking benefit cannot be determined, such as when there is no identifiable cost to either employer or employee, a taxable benefit under paragraph 6(1)(a) of the Act is assessed an employee when the value of the parking benefit can be reasonably determined. The example situation to which you refer from the "Employers' Guide to Payroll Deductions, Taxable Benefits and Non-Resident Information" illustrates that in certain circumstances it is possible, where there is no control over a very limited number of parking spaces in relation to the total number of employees, that the fair market value of the parking benefit cannot be determined. The determination of the fair market value of employer-provided parking can only be made following a review of all the relevant facts of a particular situation.

We trust our comments will be of assistance to you. Further comments will be provided by the District Office.

Yours truly,

J.A. Szeszycki
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch