6 September 1995 External T.I. 9515525 - TRAVEL EXPENSES BETWEEN TWO JOBS

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:

whether employee can deduct travel costs incurred between regular place of employment and evening part-time job

Position TAKEN:

no

Reasons FOR POSITION TAKEN:

despite arguments made by client under equity and 81(3.1) of the Act, ss. 8(2) clearly limits the scope of deductions which an employee may take from income from an office or employment

		951552
XXXXXXXXXX	Sandra Short

September 6, 1995

Dear XXXXXXXXXX:

Re: Deductibility of travelling expenses between places of employment

This is in reply to your letter of May 30 which requests an income tax ruling with respect to the deductibility of travelling and automobile expenses incurred by you in travelling between your regular place of employment and your part-time evening employment for the 1992, 1993 and subsequent taxation years where the circumstances remain the same.

An advance income tax ruling, for which a fee is charged, is a written statement given by the Department stating how it will interpret specific provisions of the Income Tax Act (the Act). The interpretation is binding on the Department. An advance income tax ruling is only given in respect of proposed transactions and hence we are unable to provide a ruling in your situation. We are, however, prepared to offer our comments to the situation outlined by you.

As we understand from the information forwarded by you, you have a full time salaried day job and a part-time evening job which compensates through salary and commissions. You travel 50 kilometres between your regular place of employment and your part-time place of employment. You are not ordinarily required to carry on the duties of your employment away from your employer's place of business or in different places. You are not reimbursed for travel expenses incurred by you in travelling between your two places of employment. You have asked whether you may be able to deduct those travel costs incurred in travelling between these two locations.

You have expressed the opinion that it is within the spirit of the legislation respecting travelling expenses, reimbursements and allowances that, where travelling expenses are incurred in getting from one place of employment to another, under conditions which are particularly onerous, that the expenses should qualify as a deductible expense. You have pointed to subsection 81(3.1) of the Act as an indication of the legislators' acknowledgement that travelling expenses incurred in respect of an individual's part-time employment while employed or in business elsewhere is a special circumstance. While subsection 81(3.1) of the Act makes reference to a distance of 80 kilometres from both the individual's ordinary place of residence and principal place of employment or business, it is your opinion that a distance of 50 kilometres on a crowded highway in a busy metropolis is akin to 80 kilometres in more idealistic motoring conditions.

It is our opinion that you are not entitled to deduct those travelling costs incurred by you when travelling from your principal place of employment to your part-time position. As you noted in your correspondence, subsection 8(2) of the Act clearly limits the scope of deductions which a taxpayer may make in a taxation year from income from an office or employment to those deductions which are available under section 8 of the Act. You have stated that you are not entitled to travelling expenses as permitted under section 8.

Supplementary information which accompanied the 1980 budget introducing subsection 81(3.1) of the Act states the following:

Travelling allowances or reimbursements of travel expenses for part-time employees will be made exempt from tax in certain circumstances....This will generally parallel the tax treatment of full-time employees for travel undertaken in the ordinary course of their employment. The new exemption will apply to part-time employees working at least 50 miles away from both their residence and their principal work location. It will be of particular assistance in facilitating the recruiting of part-time lecturers by universities and other educational institutions located outside the major metropolitan areas.

The reference to 50 miles was amended in 1982 to its metric equivalent, 80 kilometres. The legislation does not permit the reference to 80 kilometres to be reduced in any circumstances nor does it appear, based on the comments made by the Department of Finance in 1980, that it is intended to parallel travelling expenses which are permitted to be deducted in section 8 of the Act. Where subsection 81(3.1) of the Act serves to exempt from income travelling allowances or reimbursements of travel expenses for part-time employees in certain circumstances, paragraph 6(1)(b) of the Act similarly excludes from an employee's income from an office or employment a number of allowances in certain circumstances, including certain allowances for travel, as listed in subparagraphs 6(1)(b)(i) to (ix).

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch