Edited version of your written advice

Authorisation Number: 1012776790815

Ruling

Subject: Car parking fringe benefits

Question 1

Is the car parking station considered to be a commercial car parking station?

Answer

Yes

Question 2

Is the rate charged by the car parking station for parking '4 hours +' accepted as being a fee charged in the ordinary course of business to members of the public for all-day parking?

Answer

Yes

This ruling applies for the following periods

Year ended 31 March 2011

Year ended 31 March 2012

Relevant facts

This ruling only considers:

• whether the car parking station at the educational institution that is operated by a car parking operator is a commercial parking station for the purposes of the Fringe Benefits Tax Assessment Act 1986 (FBTAA); and

• whether the '4 hours +' rate is a fee charged in the ordinary course of business to members of the public for all-day parking.

For the purpose of this ruling it is assumed that the other requirements of section 39A of the FBTAA are met and that a car parking fringe benefit will arise if the car parking station is a commercial parking station.

The car park is predominantly used and available for the educational institution's staff and students.

However, members of the general public are able to park in the car park when spaces are available.

The capacity for public parking fluctuates based on the expected volumes relating to events.

On a day when parking will be restricted due to an event being held, a sign "staff and students only" is placed outside the car park. However whilst this may discourage public parkers, there is nothing stopping members of the public entering the car park.

The car park offers parking on a tiered basis as follows:

0-1 hour $

1-2 hours $

2-3 hours $

3-4 hours $

4 hours + $

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 Section 39

Fringe Benefits Tax Assessment Act 1986 Subsection 136(1)

Reasons for decision

1 Is the car parking station considered to be a commercial car parking station?

The term 'commercial parking station' is defined in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) as follows:

in relation to a particular day, means 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.

In considering whether the car parking station comes within this definition it is necessary to consider the following questions:

(a) Is the car park a permanent commercial parking station?

(b) Are any of the spaces in the car park available in the ordinary course of business to members of the public?

(c) If the spaces are available to members of the public, are they available for all-day parking on the payment of a fee?

(d) Is the car park a parking facility excluded from the definition?

(a) Is the car park a permanent commercial parking station?

As the car park is a parking station that is operated on an ongoing commercial basis by a car parking company, it meets the first requirement.

(b) Are any of the spaces in the car park available in the ordinary course of business to members of the public?

Guidance as to whether the car park can be used by members of the public is provided by Taxation Ruling TR 2000/10 Income tax: public libraries, public museums and public art galleries. Paragraph 18 of TR 2000/10 states:

To be a public library, museum or art gallery it must be open to the public. This does not necessarily mean the whole community. It may mean a section of the community, provided it is a wide and substantial section of the community. A library made available to a body of students at a public educational institution has, therefore, been accepted as a library open to the public.

The car park meets this requirement as it is able to be used by members of the general public. The only restriction on use is the availability of spaces.

(c) If the spaces are available to members of the public, are they available for all-day parking on the payment of a fee?

All-day parking is defined in subsection 136(1) of the FBTAA as follows:

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 day light period is defined in subsection 136(1) of the FBTAA as being so much of the day as occurs:

(a) after 7 a.m. on that day; and

(b) before 7 p.m. on that day

As it is possible for a member of the public to park for at least six hours between these times this requirement is met.

(d) Is the car park a parking facility excluded from the definition?

The car park is not a parking facility excluded from the definition.

Conclusion

As all of the requirements are met it is accepted that the car parking station is a commercial parking station.

2. Is the rate charged by the car parking station for parking '4 hours +' accepted as being a fee charged in the ordinary course of business to members of the public for all-day parking?

A fee will be accepted as a fee for all-day parking where it is the fee charged in the ordinary course of business to members of the public for parking for a continuous period of at least six hours between 7 a.m. and 7 p.m. on the relevant day.

For the car park being considered this is the rate advertised for '4 hours +'.