25 March 1999 External T.I. 9904035 - EMPLOYMENT USE OF MOTOR VEHICLE

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:

A school board refused to confirm that a supply teacher was required to use his motor vehicle in connection with his teaching position. The local TSO confirmed that this was the correct procedure. The Board would like this opinion confirmed in writing.

Position TAKEN:

Agreed with TSO decision.

Reasons FOR POSITION TAKEN:

Position taken in other files. IT-522R paragraph 14 states that travelling between home and place of employment is personal travel and the portion of the expenses relating to this travel is not deductible.

XXXXXXXXXX 5-990403
D. Miller
Attention: XXXXXXXXXX

March 25, 1999

Dear XXXXXXXXXX:

Re: Employment Use of Motor Vehicle

This is in reply to your letter of February 10, 1999, regarding use of a motor vehicle by a supply teacher employed by your Board. After conferring with the XXXXXXXXXX Tax Services Office (“TSO”) you refused to sign form T2200 confirming that the use of the employee’s motor vehicle was a condition of his employment. For your records you require the Department’s position in writing.

Our Comments

Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R3, dated December 30, 1996. Where the particular transactions are completed, as in this case, the enquiry should be addressed to the relevant TSO. However, we are prepared to offer the following general comments.

In computing a taxpayer’s income for a taxation year from an office or employment, paragraph 8(1)(h.1) of the Income Tax Act (the “Act”) may provide a deduction for “amounts expended by the taxpayer in the year in respect of motor vehicle expenses incurred for travelling in the course of the office or employment”. In order for an employee to be entitled to deduct motor vehicle travel expenses by virtue of paragraph 8(1)(h.1) of the Act, the employee must satisfy all the requirements of that paragraph. Subparagraph 8(1)(h.1)(i) requires that the employee was “ordinarily required to carry on the duties of his employment away from the employer’s place of business or in different places” and subparagraph 8(1)(h.1)(ii) states that the employee be “required under the contract of employment to pay motor vehicle expenses incurred in the performance of the duties of the office or employment”.

It is our understanding that a supply teacher is hired for each teaching assignment for a period of one or more days. In these circumstances, it has generally been the Department’s position that the employer’s place of business must be determined in relation to each teaching engagement and that, in this regard, is considered to be the school at which the supply teacher teaches. On the basis that the supply teacher would carry out all of his or her duties with respect to an engagement at one particular school the requirement in subparagraph 8(1)(h.1)(i) is not met.

In addition, an individual is only entitled to deduct expenses for motor vehicles in the course of employment. In relation to such expenses, the Department would generally consider the expenses incurred in travelling between a supply teacher’s home and a school and vice versa to be travel of a personal nature and not regarded as having been incurred for travelling in the course of employment. It would also follow that the motor vehicle expenses incurred by the supply teacher would not be considered to be incurred in the performance of his or her employment duties.

We trust that these comments will be of assistance.

Yours truly,

Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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