Principal Issues: For taxpayers using electronic payment cards wishing to claim the public transit pass credit: 1. Will a round trip be accepted as the equivalent of two one-way trips for the purposes of the subsection 118.02(1) definition of an "eligible electronic payment card"? 2. Can "regular commuters on smaller routes on XXXXXXXXXX " claim the credit?
Position: 1. Yes 2. A question of fact.
Reasons: 1. Round trip accepted as equivalent of two one-way trips. 2. A route will meet the definition of public commuter transit services if it operates at least five days per week and it can reasonably be expected that individuals using that particular route would return daily to their place of departure.
XXXXXXXXXX 2009-031621 Andrea Boyle, CGA June 16, 2009 Dear XXXXXXXXXX :
Re: Public Transit Pass Credit
This is in reply to your facsimile of March 24, 2009 regarding electronic payment cards from the XXXXXXXXXX and the eligibility of the expenditures on these cards for the public transit pass credit.
It is our understanding (from: XXXXXXXXXX /) that registered XXXXXXXXXX have access to a Travel History report that can be printed and will show all of the trips taken on the card.
The particular situation outlined in your facsimile appears to relate to a factual one, involving specific taxpayers. Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. We are, however, prepared to offer the following general comments, which may be of assistance.
All statutory references in this letter are references to the provisions of the Income Tax Act, R.S.C. 1985 (5th supp.) c. 1, as amended.
To qualify for the public transit pass credit, a taxpayer must have purchased either an "eligible public transit pass" or an "eligible electronic payment card".
An eligible electronic payment card as defined under subsection 118.02 (1) means a card that is used by an individual for at least 32 one-way trips during an uninterrupted period not exceeding 31 days, and which is issued by or on behalf of a qualified Canadian transit organization which records and receipts the cost and usage of the electronic payment card. Only the portion of the cost of the eligible electronic payment card attributable to the use of "public commuter transit services" is eligible for the credit.
The expression public commuter transit services is defined under subsection 118.02 (1) and means services offered to the general public, ordinarily for a period of at least five days per week, of transporting individuals, from a place in Canada to another place in Canada, by means of bus, ferry, subway, train or tram, and in respect of which it can reasonably be expected that those individuals would return daily to the place of their departure.
For the purposes of determining if an electronic payment card is an eligible electronic payment card under subsection 118.02 (1), it is our view that when a card is used to pay for a same day round-trip fare on a return-fare route, such payment will be treated as being in respect of two one-way trips.
The Travel History report available to Registered XXXXXXXXXX will be used to determine whether the holder of the registered card's usage of public commuter transit services of the XXXXXXXXXX meets the conditions for the Public Transit Pass Credit.
With respect to your question as to whether a specific route qualifies as public commuter transit services, it will qualify if it operates at least five days per week and it can reasonably be expected that individuals using that particular route or service would return daily to their place of departure. This is a question of fact which can only be established by the transit organization.
We trust that these comments will be of assistance.
Yours truly,
Louise J. Roy
Manager
for Acting Director
Ontario Corporate Tax
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch