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Edited version of your private ruling
Authorisation Number: 1012525073569
Ruling
Subject: Commercial parking station
Question 1
Is the car park located at location x a commercial car parking station for the purposes of applying section 39C of the Fringe Benefits Tax Assessment Act 1986?
Answer
Yes
This ruling applies for the following periods:
Year ending 31 March 2011
Year ending 31 March 2012
The scheme commences on:
1 April 2010
Relevant facts and circumstances
During the years ended 31 March 20XX and 31 March 20YY your office was at a location.
Within one kilometre of the office accommodation there was The Car Park.
The Car Park is located at location x.
The Car Park has over x car spaces available to members of the public.
The public can purchase car parking by inserting money in a meter and obtaining a voucher.
The Car Park parking to members of the public includes:
· $a per hour between 8:00am - 5:00pm Monday to Friday
· $b all day parking
· $c flat rate between 5:00pm - 9:00pm Monday to Friday
· $d flat rate between 8:00am - 9:00pm Saturday to Sunday
Relevant legislative provisions
Fringe Benefits Tax Assessment Act 1986 Section 39C
Fringe Benefits Tax Assessment Act 1986 Subsection 136(1)
Reasons for decision
Question 1 - Is the car park located at location x a commercial car parking station for the purposes of applying section 39C of the Fringe Benefits Tax Assessment Act 1986?
Under section 39C of the FBTAA, the taxable value of car parking fringe benefits is the lowest fee charged for all-day parking on that day by any commercial parking station within a one-kilometre radius of the premises on which the car is parked, less any employee contribution.
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:
(a) if, on that day, there is only one commercial parking station located within a 1 km radius of any of those premises - the lowest fee charged by the operator of the parking station in the ordinary course of business to members of the public for all-day parking on that day; or
(b) …
reduced by the amount of the recipients contribution.
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 Car Park 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?
(a) 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 version 5.0.0 - 01/10/01, defines the word 'permanent' as meaning:
"lasting or intended to last indefinitely; remaining unchanged; not temporary; enduring; abiding. "
The Car Park is located at location x. During business hours, the Car Park offers casual car parking to the public during business hours and on weekends.
The Car Park parking to members of the public includes:
· $a per hour between 8:00am - 5:00pm Monday to Friday
· $b all day parking
· $c flat rate between 5:00pm - 9:00pm Monday to Friday
· $d flat rate between 8:00am - 9:00pm Saturday to Sunday
The term commercial is also not defined in the FBTAA, however The Macquarie Dictionary states
that is:
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 Car Park's accessibility to the public is operated with a view to making a profit and therefore is considered commercial.
This condition is satisfied.
(b) 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:
"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.
As mentioned previously, in the ordinary course of business the Car Park 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.
This condition is satisfied.
Conclusion
The car parking facility located in location x meets the definition of a commercial parking station under subsection 136(1) of the FBTAA.
Question 2 - Can The Car Park's $x.xx all day rate be used as the lowest fee charged for all day parking by a commercial car parking station for the purposes of calculating the taxable value of car parking fringe benefits under section 39C of the FBTAA?
Under section 39C of the FBTAA, the taxable value of car parking fringe benefits is the lowest fee charged for all-day parking on that day by any commercial parking station within a one-kilometre radius of the premises on which the car is parked, less any employee contribution.
As explained at Question 1 above, The Car Park is a commercial parking station which offers all day parking to members of the public during business hours for a fee. The Car Park is within a one-kilometre radius of the premises on which the car is parked.
Therefore, The Car Park's $x.xx all day rate can be used as the lowest fee charged for all day parking by a commercial car parking station for the purposes of calculating the taxable value of car parking fringe benefits under section 39C of the FBTAA for the FBT years ending 31 March 20XX and 20YY respectively.