A J Frost:
1 This is an income tax appeal in respect of the appellant's 1972 taxation year.
2 The appeal was set down for hearing on April 18, 1975, and subsequently adjourned pending the filing of written submissions on the understanding that the Board would then render its decision based on the information contained in the said submissions.
3 From January to July of 1972, the appellant was a member of the Legislative Assembly of the Province of British Columbia, receiving $6,700 as salary and $3,300 as an expense allowance. He was also employed during 1972 by Castlegar News Limited, his T4-1972 slip showing earnings of $7,750. In filing his 1972 return, the appellant claimed an employment expense deduction of $150, which was disallowed by the Minister of National Revenue on the ground that, according to the provisions of subsection 8(3) of the Income Tax Act, SC 1970–71–72, c 63 as amended, the amount claimed was not deductible from his income for the year.
4 The appellant contends that, as an employee of Castlegar News Ltd for ten months during 1972 and exclusively a Member of the Legislative Assembly for only two months during the said year, he should be allowed ten-twelfths of the maximum $150 yearly employment expense deduction; or, in the alternative, that he should be allowed half the deduction, that is, for the period July 1 to December 31, on the ground that he ceased to be an MLA in July of the 1972 taxation year.
5 Counsel for the Minister, in his argument, submitted that by virtue of paragraph 8(3)(c) of the Act, the appellant is not entitled to any allowance in 1972 under paragraph 8(1)(a) thereof because the allowance provided for by paragraph 8(1)(a) does not exceed the amount of the appellant's expense allowance as a Member of the Legislative Assembly of the Province of British Columbia, exempt from tax under the provisions of subsection 81(2) thereof.
6 The taxation year for each individual taxpayer is the calendar year of 12 months certain, and a taxpayer cannot carve up the taxation year into segments to suit his purposes unless specifically provided by a special provision of the Income Tax Act. Income received and expenses incurred during a taxation year are for a particular calendar year commencing on January 1 and ending on December 31. Paragraph (b) of subsection 8(3) specifies that no amount is deductible in respect of the employment expense if a taxpayer was at any time in the year, a member of either of the Federal Houses of Parliament, and therefore it is only logical to apply paragraph (c) thereof strictly to persons who were at any time in the year MLA's to whom subsection 81(2) would apply.
7 The Act permits a special employment expense of $150 but this deduction is not available to elected members of a provincial legislature who claim expenses under subsection 81(2) or (3) of the Act in excess of the $150 deduction allowed by paragraph 8(1)(a). The appeal is therefore dismissed on the ground that the amount of $150 claimed by the appellant has been properly disallowed in accordance with the provisions of subsection 8(3) of the Act.
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