Words and Phrases - "common carrier"

The taxpayer uses the services of subcontractors to have the goods transported, but handles all other aspects of the business and remains responsible to both the sending and receiving customers. In finding that the lack of ownership of the vehicles need not be an impediment to exemption of the taxpayer’s profits under Art. VIII of the Canada-U.S. Convention, CRA stated:

In our view, a person who carries on the business of providing, for consideration, a service of transporting property from one place to another and who generally offers its services to the public, is a common carrier. In our view, such a person could operate such a transportation business without owning the vehicles used for such transportation. The person could even use subcontractors (who provide their trucks and pay their own expenses) to perform the transportation portion of the business. However, in order to claim that it is the taxpayer who provides the transportation service and who is engaged in the operation of motor vehicles as a common carrier, it would be necessary for the taxpayer to have some involvement in the operations of the business by maintaining, for example, a certain degree of control and supervision over the transportation service. … [I[f the facts indicate that the taxpayer … is otherwise a common carrier, that the taxpayer is engaged in all aspects necessary for the proper operation of a business providing a transportation service for the transportation of goods (other than the transportation itself) such as rate setting, billing, advertising, the establishment of service standards, the establishment of drop-off points, the receipt of orders from shipper customers, and that the taxpayer remains liable to both shipper and receiver customers, we could conclude that the taxpayer is engaged in the operation of motor vehicles as a common carrier for the purposes of paragraph 4 of Article VIII of the Convention.