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Edited version of private ruling
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Ruling
Subject: Tax offsets - education tax refund
Question:
Does a digital camera qualify as an allowable expense for the education tax refund (ETR)?
Answer: No.
This ruling applies for the following period:
Year ended 30 June 2011.
The scheme commences on:
1 July 2010.
Relevant facts and circumstances
You receive family tax benefit (FTB) Part A.
Your child is in Year 9 at a Secondary School.
Your child is undertaking Multimedia as an elective.
Your child needs to use a camera as part of their multimedia studies.
Your child is not undertaking a school-based apprenticeship or vocational training and does not expect to do so in later years.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 61-610.
Income Tax Assessment Act 1997 section 61-630.
Income Tax Assessment Act 1997 section 61-640.
Reasons for decision
The Education Tax Refund (ETR) is a government initiative to help with the cost of educating primary and secondary school children. Eligible parents, carers, legal guardians and independent students may be entitled to a refundable tax offset equal to 50% of eligible education expenses: Subdivision 61-M of the Income Tax Assessment Act 1997 (ITAA 1997).
To be eligible to claim the ETR, you must be eligible to receive family tax benefit (FTB) Part A for the child attending primary or secondary schooling. If the child received a payment, such as Youth Allowance, which stopped the parent from being entitled to receive FTB Part A, the parent would still be considered eligible to claim the ETR.
Eligible education expenses are defined in section 61-640 of the ITAA 1997 as items that support a child's schooling and education covering the purchase, lease, hire or hire-purchase cost of:
· laptops, home computers and associated costs
· computer-related equipment such as printers, USB flash drives as well as disability aids to assist the use of computer equipment for students with special needs
· home internet connection, including the costs of establishing and maintaining
· computer software for educational use - word processing, spreadsheet, database and presentation software and internet filters and antivirus software
· school textbooks and other paper-based school learning materials - including prescribed textbooks, associated learning materials, study guides and stationery
· tools of trade.
Where an expense does not fall within this definition it will be not be eligible for inclusion in the ETR.
Application to your circumstances
In your case, you expect to incur expenditure in purchasing a camera. This will be used by your child in their high school elective course.
A camera is not considered to be computer-related equipment and would need to be a tool of trade to be considered an eligible education expense. What constitutes a 'tool of trade' is not defined within the provisions and would therefore largely take on its ordinary meaning: an instrument of manual operation (tool) commonly used in a specific occupation.
The definition, therefore, has two elements, the instrument (tool) and the occupation (trade), and it is considered both elements need to be present for the acquisition costs to be an eligible expense for ETR purposes. Thus the cost of tools as part of an elective subject such as woodwork would not necessarily qualify as an eligible expense. The tools would need to be acquired as part of a vocational training subject aimed at developing occupational/trade skills.
In your case, your child is not completing a course of vocational training; they are undertaking an elective subject at their high school. Therefore, a camera is not considered to be an eligible education expense for the purposes of the ETR.
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