6 March 1995 Ministerial Letter 9502058 - INDIAN ACT EXEMPTION - BAND RELOCATING - FISHERMEN

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:

Possible exemption for Indian Band in the process of relocating to a reserve.

Position TAKEN:

Only property on a reserve is exempt from taxation.

Reasons FOR POSITION TAKEN:

Indian Act

ADM'S OFFICE
RETURN TO RULINGS, 15TH FLOOR, ALBION TOWERS
AUTHOR
SUBJECT OR CORPORATE FILE

March 6, 1995

XXXXXXXXXX

Dear XXXXXXXXXX:

The Honourable David Anderson, Minister of National Revenue, has asked me to reply to your letter of November 2, 1994, addressed to the Minister of Indian and Northern Affairs, a copy of which you also sent to Mr. Anderson, concerning the relocation of your Band to a new reserve and the taxation of off-reserve income. I apologize for the delay in replying.

In your letter, you stated that you have been able to demonstrate an on-reserve office base in the past in order to qualify for tax exemptions. However, as you have noted, this factor alone will not be sufficient to connect income to a reserve for tax exemption purposes under the Indian Act Exemption for Employment Income Guidelines which were finalized in June 1994. A copy of the Guidelines is attached for your information.

In determining whether the income earned by an Indian is situated on a reserve and thus exempt from taxation, the approach taken by the Supreme Court of Canada in the case of Williams v. Her Majesty The Queen must be followed. In the 1992 Williams decision, the Supreme Court ruled that the proper approach to determining the situs of intangible personal property is to evaluate the various connecting factors which tie the property to one location or another. Draft guidelines interpreting the Williams decision were issued on December 15, 1993, to some 200 Indian organizations and individuals. As it was realized that the late release of these guidelines would not give individuals affected by these changes sufficient time to put their tax affairs in order, the Government decided to extend the transition period to December 31, 1994. It is our view that the Guidelines represent a fair and reasonable interpretation of the Supreme Court decision.

You stated that you would like to receive a tax exemption based on your efforts to establish a reserve. However, this department is not in a position to offer an exemption from taxation beyond what is already available to Bands on reserves and provided for in the Guidelines.

You raised concern for the members of your band and referred to the fishing industry on the west coast. If you would like us to consider specific employment situations, may I suggest that you submit the applicable facts to your local Tax Services office which will provide you assistance. The Director of Vancouver Island Tax Services is Mr. Ron Frolek and he may be contacted at the following address and telephone number:

1415 Vancouver Street
Victoria, British Columbia
V8V 3W4
(604) 363-3169

I trust that these comments will be of assistance.

						Yours sincerely,
						Pierre Gravelle, Q.C.

Attachment

J.D. Brooks
957-2103
March 6, 1995