Private ruling: FBT commercial parking station
Published: March 2014
Ruling period: 1 April 2014 - 31 March 2015 | 1 April 2015 - 31 March 2016 | 1 April 2016 - 31 March 2017.
Date scheme commenced: 1 April 2013.

Ruling: Q1: Is the specified car park a commercial car parking station ? | A1: Yes.

Relevant facts and circumstances: There are several all-day car parking stations available to the public within one kilometre of your premises. The last car parking facility is located father from your premises than the other car parking facilities and charges the lowest fee to the public. This car parking facility provides information relating to the price and availability of their services on a website.

Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 section 39C | Fringe Benefits Tax Assessment Act 1986 subsection 136(1).

Reasons for decision: Detailed Reasoning - Detailed reasoning: Section 39C of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) states that the taxable value of a car parking fringe benefit provided on a day in connection with one or more premises is equal to: (b) if, on that day, there are 2 or more commercial parking stations located within a 1 km radius of any of those premises - the lowest fee charged by any of the operators of those parking stations in the ordinary course of business to members of the public for all-day parking on that day; reduced by the amount of the recipients contribution. You would prefer to use the lowest day rate charged by this car parking station, to calculate the value of your car parking fringe benefits using the commercial parking station method in section 39C of the FBTAA. To do this, the car parking facility must be a commercial parking station. A commercial parking station, in relation to a particular day, is defined in subsection 136(1) of the FBTAA as: … 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. Further guidance as to what is a commercial parking station is provided in paragraphs 77 to 81 of Taxation Ruling TR 96/26 - fringe benefits tax: car parking fringe benefits (TR 96/26). In summary, paragraphs 77 to 81 of TR 96/26 provide that, in determining whether a car park is a commercial parking station, it is necessary to consider the following: • is the car parking facility permanent? • is the car parking facility commercial? • are any of the car parking spaces in the car parking facility available in the ordinary course of business to members of the public for all day parking? | Detailed Reasoning - Is the car parking facility a permanent facility?: The word permanent is not defined in the FBTAA, however, the ordinary meaning in The Macquarie Dictionary , [Multimedia], version 5.0.0, 1 October 2001, states that 'permanent' means: 1. lasting or intended to last indefinitely; remaining unchanged; not temporary; enduring; abiding. The car parking facility offers permit and casual parking to the public. Paid car parks are offered on a long term basis, with payment made up to one year in advance, with a current waiting list. The car parking is not considered to be temporary, as the owner of the car park provides long term parking with payment made up to a year in advance. Further, there is a waiting list as there are no spaces available. The car parking facility is therefore considered to be permanent. | Detailed Reasoning - Is the car parking facility commercial?: The word 'commercial' is also not defined in the FBTAA, however, the ordinary meaning in The Macquarie Dictionary, [Multimedia], version 5.0.0, 1 October 2001, states: 1. 1. of, or of the nature of, commerce. 2. 2. engaged in commerce. 3. 3. capable of returning a profit: a commercial project. 4. 4. capable of being sold in great numbers: is the invention commercial? 5. 5. … 6. 6. preoccupied with profits or immediate gains. The third car parking facility charges the lowest all day fee. However, the specified car park is located further away from the majority of commercial premises. The location of the car parking facility is closer to housing and community facilities, where there is greater availability of free parking. Therefore the lowest all day fee is not considered to be a nominal fee and is charged with the intention of making a profit. By providing information regarding this car parking facility on a website, it can be viewed as a method of promoting car parking to the public. It is considered that the third car parking facility operates with a view to making a profit and is therefore a commercial car parking facility. Are any of the car parking spaces in the car parking facility available in the ordinary course of business to members of the public for all day parking? Subsection 136(1) of the FBTAA defines all day parking to mean: 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. 'Daylight period' is also defined in subsection 136(1) of the FBTAA to mean the period between 7am and 7pm. The car parking facility offers all day car parking to members of the public during business hours. It is accepted that the car park is offered for a continuous period of more than six hours and during a daylight period for the payment of a fee. Consequently, the third car parking facility meets the definition of a commercial parking station under subsection 136(1) of the FBTAA.