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.
July 19, 1996
GST Rulings and Interpretations Business & Publications
10th Floor, Tower C Division
25 McArthur Avenue A.M. Brake
Vanier, Ontario (613) 957-2133
Attn: John Shields
Extended Cab Trucks for CCA Purposes
This is further to your referral dated July 15, 1996 requesting that
we provide an insert, addressing the taxation issue, for your
drafted reply to a letter from XXXXXXXXXX, to our Minister
expressing concern about capital cost allowance and the GST rebate
on extended cab pick-up trucks.
We suggest that the following be inserted as a new paragraph between
the opening and 2nd paragraphs of your draft reply.
The Income Tax Act imposes certain restrictions for capital
cost allowance purposes on the more expensive passenger
vehicles such that their maximum capital cost is $24,000.00,
calculated without reference to the provincial sales taxes or
GST. A passenger vehicle, as defined in the Income Tax Act,
includes a regular or extended cab truck unless one of the
exceptions applies. Basically, the exceptions are based on
the use of the truck in the year of acquisition in the
transportation of goods, passengers or equipment in the
course of gaining or producing income. The exception for a
van or regular pick-up truck that seats a driver and not more
than 2 passengers is based on a primary, or 50%, use test
whereas an extended cab pick-up truck, considered to have
seating capacity for more than the driver and 2 passengers,
has a more onerous all or substantially all, or 90%, use
test. Should a particular van, regular or extended cab pick-
up truck not qualify for exception, it will remain within the
definition of a passenger vehicle, subject to the legislated
restriction. The restriction on capital cost, which
generally relates to assets acquired after June 17, 1987, was
introduced as part of tax reform by the Department of Finance
and an amendment to the Income Tax Act would be required to
remove extended cab pick-ups from the present definition of
You may also wish to modify your response as our suggested insert
may result in duplication of comments, for example, the last
sentence of the current second paragraph has been written into the
insert. We also suggest amending the first sentence of the
penultimate paragraph to read "Any changes to the Income Tax Act and
to the GST legislation...".
Business and Publications Division
Income Tax Rulings and
Policy and Legislation Branch
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