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 Extended cab pick-up trucks that seat the driver and in excess of 2 passengers are class 10 or Class 10.1.
Position:
Determination of fact based on the use of the truck in the year acquired. A passenger vehicle as defined in subsection 248(1) of the Income Tax Act (the "Act") "means an automobile...". The definition of automobile as contained in subsection 248(1) of the Act would otherwise include a regular or extended cab truck unless it fell within one of the exceptions set out in paragraphs (b) through (e). Since the trucks seat the driver and more than two passengers, they cannot fit within the subparagraph 248(e)(i) exclusion.
Reasons:
Paragraph (e) specifically deals with a van or pick-up truck or a similar vehicle. The subparagraph (e)(i) applies where the seating capacity is for a driver and not more than 2 passengers together with a requirement that more than 50% of its use be the transportation of goods or equipment in the course of gaining or producing income. Subparagraph (e)(ii) does not have a seating requirement but has a greater use requirement for the pick-up in that "the use of which, in a taxation year in which it is acquired, is all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income".
961190
XXXXXXXXXX A.M. Brake
Attention: XXXXXXXXXX
May 23, 1996
Dear Sirs:
Re: Classification of Extended Cab Trucks for CCA Purposes
This is in reply to your letter of March 25, 1996 wherein you requested our opinion as to whether 1996 Chevrolet extended cab trucks are considered passenger vehicles for capital cost allowance ("CCA") purposes. You are concerned with extended cab trucks which have rear folding seats or folding jump seats in the back of the cab.
A passenger vehicle as defined in subsection 248(1) of the Income Tax Act (the "Act") "means an automobile...". The definition of automobile as contained in subsection 248(1) of the Act would otherwise include a regular or extended cab truck unless it fell within one of the exceptions set out in paragraphs (b) through (e). Subparagraph (e)(i) deals with a van or regular pick-up truck that seats a driver and not more than 2 passengers and contains a primary use test. Subparagraph (e)(ii) deals with a van or pick-up truck or a similar vehicle "the use of which, in a taxation year in which it is acquired, is all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income". The subparagraph (e)(ii) exception does not contain a seating restriction but the use requirement is more onerous in that "all or substantially all" is considered to be more than 90% of the use made of the vehicle.
In our view, the extended cab trucks are considered to have seating capacity for more than the driver and 2 passengers and it will, therefore, be a determination of fact based on the use of each particular extended cab truck, in the year it was acquired, whether that vehicle fits within the subparagraph (e)(ii) exclusion in order that it not be considered a passenger vehicle that falls within Class 10.1 for CCA purposes. If it fits within the exception it would be Class 10.
The foregoing comments are given in accordance with the practice of providing opinions referred to in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990 and are not binding on Revenue Canada, Taxation.
We trust our comments will be of assistance to you.
Yours truly,
R. Albert
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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