Principal Issues: Will Go-Transit's 10-ride pass allow a holder to claim the public transit pass credit?
Position: No.
Reasons: The 10-ride pass will not meet the definition of eligible public transit pass.
XXXXXXXXXX Michael Cooke, CA 2008-029899 February 3, 2009
Dear XXXXXXXXXX :
Re: Technical Interpretation Request - Public Transit Tax Credit
We are writing in response to your letter of October 29, 2008, wherein you asked for our views on the public transit tax credit. Specifically, your question is whether a 10-trip pass to use Go Transit would be eligible for the public transit tax credit.
To qualify for the public transit tax credit, a taxpayer must have purchased either an "eligible public transit pass" or an "eligible electronic payment card" that was issued by or on behalf of a "qualified Canadian transit organization" as those terms are defined in subsection 118.02(1) of the Income Tax Act (the "Act").
Generally speaking, a weekly transit pass issued by or on behalf of a qualified Canadian transit organization will be an eligible public transit pass where the pass entitles the holder to unlimited transit use for an uninterrupted period of at least five consecutive days if the combination of that transit pass and one or more such transit passes give the holder the right to use those public commuter services on at least 20 days in a 28-day period.
Due to this definition, the 10-trip transit passes issued by Go Transit, which does not provide for unlimited transit use, would not be an eligible public transit pass even where such a pass, along with one or more such transit passes, happens to be used for travel by the holder on 20 or more days in a 28-day period.
We trust our comments will be of assistance to you.
Yours truly,
Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch