22 February 1996 Internal T.I. 9605666 - INDIANS - EMPLOYMENT INCOME

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 the employees of XXXXXXXXXX College are exempt from tax on their salary income by virtue of either Guideline 2 or 4 of the Indian Act Exemption for Employment Income Guidelines.

Position:

It is a question of fact.

		February 22, 1996

	Appeals Branch	HEADQUARTERS
	Appeals & Referrals Division	J.D. Brooks
	Don Beamish, Section Chief	957-2103

	Attention: Alex Lowe
									960566

XXXXXXXXXX

Re Guideline 4, it is a question of fact as to whether the College serves Indians who presently live on reserve or who formerly lived on reserve. In dealing with this same issue with the XXXXXXXXXX (see attached letter), we pointed out that the fact that students may have to leave the reserve if they want further education does not alter the fact that the students may have changed their place of residence. In the Indian Act Exemption for Employment Income Guidelines, the meaning given to the phrase "Indian lives on the reserve" is that "the Indian lives on the reserve in a domestic establishment that is his or her principal place of residence and that is the centre of his or her daily routine."

If the students do not for the most part live on reserve while attending the College, the employees would not fit the requirements of Guideline 4. Depending on the actual facts, we could give this situation a further review to determine whether it does fit or whether it might warrant exemption on the basis of exceptional circumstances.

With respect to Guideline 2, it is noted that the College is only 15 Km. away from the reserve at XXXXXXXXXX which is the reserve for more than one-half of the Indians served by the College. Thus, it is reasonable that many employees may live on reserve, although this remains a question of fact to be resolved.

With respect to the fact that the College is situated near the reserves, consider the case of Norway House (92 DTC 2267 (TCC)) which concerned E.A. Poker and F.M. Folster. Folster was found to be taxable on her employment income since the place of her employment was not located on the reserve. She performed her duties of employment at a hospital in the vicinity of, but not within the geographical boundaries of, the reserve. The courts have not been sympathetic to extending the actual boundaries of reserves to notional boundaries.

R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch