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Edited version of your private ruling
Authorisation Number: 1012455153218
Ruling
Subject: Fringe benefits tax - commercial parking station
Question 1
Is the specified car park a commercial car parking station under section 39C of the Fringe Benefits Tax Assessment Act 1986?
Answer
Yes.
This ruling applies for the following periods
1 April 2013 to 31 March 2014
The scheme commences on
1 April 2013
Relevant facts and circumstances
There are three all day car parking stations available to the public within one kilometre of your premises.
The third car parking facility is located farther from your premises than other car parking facilities.
The third car parking facility charges the lowest all day fee to the public.
The third car parking facility provides information relating to the price and availability of their services on their website.
Relevant legislative provisions
Fringe Benefits Tax Assessment Act Section 39C
Fringe Benefits Tax Assessment Act Subsection 136(1)
Reasons for decision
Is the specified car park a commercial car parking station under section 39C of the Fringe Benefits Tax Assessment Act 1986?
Section 39C of the FBTAA states that the taxable value of a car parking fringe benefit provided on a day in connection with one or more premises is equal to:
(b) if, on that day, there are 2 or more commercial parking stations located within a 1 km radius of any of those premises - the lowest fee charged by any of the operators of those parking stations in the ordinary course of business to members of the public for all-day parking on that day;
reduced by the amount of the recipients contribution.
You would prefer to use the lowest day rate of the third car parking facility to calculate the value of your car parking fringe benefits under the commercial parking station method in section 39C of the FBTAA. To do this, you need to satisfy that this car parking facility is a commercial parking station.
A commercial parking station, in relation to a particular day, is defined under subsection 136(1) of the FBTAA as:
…a permanent commercial car parking facility where any or all of the car parking spaces are available in the ordinary course of business to members of the public for all-day parking on that day on payment of a fee, but does not include a parking facility on a public street, road, lane, thoroughfare or footpath paid for by inserting money in a meter or by obtaining a voucher.
Further guidance as to what is a commercial parking station is provided by paragraphs 77 to 81 of Taxation Ruling TR 96/26 - Fringe benefits tax: car parking fringe benefits.
To determine whether the third car parking facility is a commercial parking station, it is necessary to consider the following:
· Is the car parking facility a permanent commercial car parking facility?
· Are any of the car parking spaces in the car parking facility available in the ordinary course of business to the members of the public?
Is the car parking facility a permanent commercial car parking facility?
The word 'permanent' is not defined in the FBTAA. However, the ordinary meaning in The Macquarie Dictionary, [Multimedia], version 5.0.0, 1 October 2001, states:
1. lasting or intended to last indefinitely; remaining unchanged; not temporary; enduring; abiding.
The third car parking facility offers permit and casual car parking to the public. Paid car parks are offered on a long term basis with payment made up to one year in advance with a current waitlist.
The car park is not considered to be temporary. With parking offered on a long term basis, it has intention to last indefinitely. Therefore, it is a permanent car park for these purposes.
The word 'commercial' is not defined in the FBTAA. However the ordinary meaning in The Macquarie Dictionary, [Multimedia], version 5.0.0, 1 October 2001, states:
1. of, or of the nature of, commerce.
2. engaged in commerce.
3. capable of returning a profit: a commercial project.
4. capable of being sold in great numbers: is the invention commercial?
5.….
6. preoccupied with profits or immediate gains.
The third car parking facility charges the lowest all day fee in comparison to other car parking near your premise. However, the car park is located farther away from the majority of commercial premises. The location of the third car parking facility is closer to housing and community facilities where there is greater availability of free car parking. Therefore, the lowest all day fee is not considered to be a nominal fee and is charged with the intention to make a profit for the third car parking facility. By providing information regarding car parking facility on their website, it can be viewed as a method of promoting car parking to the public.
It is considered that the third car parking facility operates with a view to making a profit and therefore commercial.
Are any of the car parking spaces in the car parking facility available in the ordinary course of business to members of the public for all day parking?
Subsection 136(1) of the FBTAA defines all day parking to mean as:
· in relation to a particular day, means parking of a single car for a continuous period of 6 hours or more during a daylight period on that day.
A daylight period is defined in subsection 136(1) of the FBTAA to mean the period between 7am and 7pm.
The third car parking facility offers all day car parking to members of the public during business hours. It is accepted that the car park is offered for a continuous period of more than six hours and during a daylight period for the payment of a fee.
Consequently, the third car parking facility meets the definition of a commercial parking station under subsection 136(1) of the FBTAA. For that reason, it can be used for the purposes of applying section 39C of the FBTAA as the lowest fee charged by a car parking station within a 1km radius of your building.