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.
HAMILTON DISTRICT OFFICE
Mr. M. R. Cathcart Business Files Audit
HEAD OFFICE Corporate Rulings Division D.S. Delorey 995-1724 (613)
Classification of Trailer Mounted Amusement Park Rides
This is in reply to your memorandum dated November 26, 1980 concerning the proper classification for c.c.a. purposes of certain equipment owned by XXXX
The subject equipment is amusement-park rides which are trailer mounted such that the ride and the trailer form one unit. The taxpayer feels that the unit represents a trailer and therefore is properly included in class 10. You feel however that the unit represents first a piece of equipment and secondly a trailer and conclude that such mobile equipment should be included in Class 8. Alternatively, you would accept a split such that the cost of the trailer portion would represent a class 10 asset, etc.
Since we are dealing with one integrated unit, it is our view that a cost split is not feasible - either it is all class 8 or all class 10. Insofar as the proper class is concerned, our research indicates that where a piece of equipment can properly qualify as property of two different classes, the Department takes the view that "predominant use" determines the proper class. In such a case, it would seem reasonable to conclude that the unit should be put in class 8 given that it is used as an amusement park ride approximately six days of the week. In the case at hand, however, the use of this criterion in and by itself is not valid given the fact that class 10 specifically includes a "trailer". It would seem, therefore, that if the Department wants the unit included in class 8, it would have to prove that the unit does not represent a "trailer".
From our view of the various dictionary meanings of the word "trailer" and of two cases involving the determination of what constitutes a "trailer" (Dubreuil Bros. Ltd. - 78 DTC 1584 and Plaza Equities Ltd. 78 - 3 WWR 390), we are not convinced that the courts would support the view that the units in question do not represent trailers. Technically speaking therefore, it is our view that the taxpayer's argument that the units should be included in class 10 is the better argument and we therefore recommend acceptance of same.
Since it is likely that our problem with the word "trailer" will be repeated, we are forwarding a copy of this correspondence to our Regulations Division with the suggestion that they examine the possibility of removing the present ambiguity (by definition etc.) of the term "trailer".
ORIGINAL SIGNED BY
B.E. Thompson Chief Merchandising, Manufacturing & Construction Section Corporate Rulings Division Corporate Rulings Directorate Legislation Branch
DCD/na 7-1084 class 8 class 10
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