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.
T.D. Peters
January 23, 1981
This is in reply to your letter of December 4, 1980 requesting our opinion as to the proper treatment, for capital cost allowance purposes, of certain propane tanks.
In our opinion the small propane tanks filled from a bulk container and delivered to customers should be considered returnable containers and we would therefore refer you to our Interpretation Bulletin IT-165 for the proper treatment of the cost of such containers.
The larger tanks described as generally used at the retail level at the client's place of business and refilled from a bulk container carried on a truck would not appear to be considered a storage tank as envisaged by class 6(e) of Schedule B to the Income Tax Regulations and therefore would be included in class 8.
The medium sized bulk tanks which are permanently attached to a truck would be considered part of the truck for capital cost allowance purposes and therefore included in the same class as the truck. The large bulk tanks which remain at the distributor's place of business and are used to fill the other tanks previously mentioned would be considered an oil storage tank and therefore should be included in class 6.
Notwithstanding that the words in Class 6(e) specifically refer to "an oil or water storage tank" it is our view that propane tanks also fall properly within the intent of those words inasmuch as propane is a derivative of petroleum which, by definition, is a hydrocarbon oil.
Yours sincerely,
Original Signed By Original Signé Par
XXXX
for Director Non-Corporate Rulings Division
Schedule B Class 6(e)
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