Principal Issues: Would the federal transit pass tax credit include payments made in respect of a bike sharing program?
Position: No.
Reasons: The definition of "public commuter transit services" in subsection 118.02(1) of the Income Tax Act includes transportation by means of bus, ferry, subway, train, or tram. The transportation service offered by a public bike-sharing program does not qualify for the credit.
XXXXXXXXXX
Dear XXXXXXXXXX :
Thank you for your correspondence of August 4, 2010, asking whether a public bike-sharing system is a mode of transport eligible for the public transit tax credit.
The public transit tax credit is based on the use of "public commuter transit services" as defined under subsection 118.02(1) of the Income Tax Act. The definition states that the credit applies only to transportation by means of bus, ferry, subway, train, or tram. Transportation services offered by a public bike-sharing program does not qualify for the credit.
The Canada Revenue Agency is responsible for administering the tax system and applying the current tax legislation as enacted by Parliament. Any legislative changes to expand the eligibility rules for the credit fall under the responsibility of the Department of Finance Canada. I am therefore forwarding a copy of our correspondence to the Honourable James M. Flaherty, Minister of Finance, for his consideration.
I trust that the information I have provided is helpful.
Yours sincerely,
Keith Ashfield
Minister of National Revenue
c.c.: The Honourable James M. Flaherty, P.C., M.P.
Minister of Finance
House of Commons
Ottawa ON K1A 0A6
Tom Posadovsky
(613) 952-8283
2010-037710