Principal Issues: [TaxInterpretations translation] Can amounts paid to a school trustee as reimbursement of mileage expenses between the trustee’s home and the administrative office of the School Board be exempted in computing the trustee's income for the year in which they are received?
Position: Travel expenses are of a personal nature.
Reasons: Previous position
2006-021679 XXXXXXXXXX Anne Dagenais, Advocate, M. Fisc. April 15, 2008
Dear Madam,
Subject: Request for technical interpretation
Principal place of work - Trustee
This is in response to your letter of September 8, 2006, in which you requested our comments regarding the travel expenses of school board trustees. We apologize for the delay in responding to your question.
Unless otherwise indicated, all statutory references herein are to the provisions of the Income Tax Act (the "Act").
Your Question
You wish to know whether amounts paid to an elected school trustee to reimburse for mileage to and from the school board's administrative office can be exempted in computing the trustee's income for the year in which they are received.
Our Comments
As stated in paragraph 22 of Information Circular 70-6R5 dated May 17, 2002, it is the practice of our Directorate not to issue written opinions on proposed transactions otherwise than by way of advance rulings. Furthermore, when it comes to determining whether a completed transaction has received appropriate tax treatment, that determination is made first by our Tax Services Offices as a result of their review of all facts and documents, which is usually performed as part of an audit engagement. However, we can offer the following general comments that we hope may be helpful to you. These comments may, however, under certain circumstances, not apply to your particular situation.
In general, a school trustee holds an office as defined in subsection 248(1). The trustee is therefore subject to all the rules relating to income from an office or employment. It has been the long-standing position of the Canada Revenue Agency that the cost of travel between an employee's residence and place of work is considered a personal expense. (See paragraph 14 of Interpretation Bulletin IT-522R)
Determining whether a location is the usual place of work for an employee is a question of fact that can only be resolved after a review of all relevant information. However, in the situation of elected trustees, an administrative office of a school board where meetings are held could be considered a workplace.
In the present case, in view of the above, we are of the view that the travel expenses incurred by an elected trustee to attend meetings are of a personal nature.
In that respect, this position was confirmed in the Daniels1 case of the Federal Court of Appeal, where a municipal councilor argued that the per-kilometre allowances received from the county for travel expenses incurred in attending council meetings from his main residence should not be included in his income.
In dismissing the taxpayer's appeal, Justice Desjardins wrote:
It is well established that travel expenses incurred by a taxpayer in travelling to and from his home to his place of work are considered personal expenses. They are not travelling costs encountered in the course of the taxpayer's duties. Rather, they enable him to perform them … .
Furthermore, since this is not travel between two workplaces or travel in the performance of the duties, we are of the view that those trips are simply for the purpose of performing duties once at the workplace. Consequently, reimbursements of mileage expenses between home and the Board's administrative office paid by the Board for the use of a motor vehicle in those circumstances must be included in their income for the year in which they are received pursuant to subsection 6(1). Finally, given the personal nature of the travel, no expenses related to it may be deducted.
We hope that these comments are of assistance.
Best regards,
Randy Hewlett
Manager
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch.
ENDNOTES
1 2004 FCA 125, affirming [2003] T.C.J. No. 790