7 January 1997 Ministerial Letter 9632678 - EXTENDED CAB PICK UP TRUCK AS AN AUTOMOBILE

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 an extended cab truck with rear folding, or folding jump seats behind the driver's bench seat is an automobile for the purpose of the standby charge

Position:

depends on the percentage of use of the vehicle for transporting goods, equipment or passengers in the course of earning income

Reasons:

a club cab, crew cab or extended cab truck has seating capacity for more than driver + 2. Thus it will only be excluded from the def'n of auto for all purposes of the Act if, in the year of acquistion when the usage test is applied, it is used more the 90% for above noted purpose

MINISTER/DEPUTY MINISTER'S OFFICE 96-06664M
ADM'S OFFICE
RETURN TO 15TH FLOOR, ALBION TOWER

	                                    	January 7, 1997

XXXXXXXXXX
Dear XXXXXXXXXX:

I am replying to your letter of September 20, 1996, written on behalf of your constituent, XXXXXXXXXX, concerning the automobile standby charge. I apologize for the delay in responding to your letter.

I have considered XXXXXXXXXX comments on the standby charge which is included in an employee's income when an employer provides the employee with an automobile. The definition of an automobile in the Income Tax Act can include a van or pick-up truck unless specifically excluded from the definition.

A crew cab truck will be treated as an automobile unless it meets the usage test set out in the legislative exception. Specifically, if a crew cab is used all or substantially all the time (more than 90 per cent) for the transportation of goods, equipment or passengers in the first year of ownership, it will not be considered an automobile for income tax purposes. Because this exclusion requires a determination of the extent of use of the vehicle, the facts of each case must be considered separately.

I would also like to note that the amount of any personal benefit resulting from an employee's personal use of a vehicle which is not an automobile under the legislative definition, must still be included in the employee's income under the general provisions of the Act.

I trust these comments will assist you in responding to your constituent's concerns.

					Yours sincerely,

Jane Stewart, P.C., M.P.

Annemarie Humenuk
957-2134
December 6, 1996