Private ruling: Zone tax offset
Published: July 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Does X lie within the Special Zone B area for the purposes of the zone tax offset? | A1: No. | Q2: Are you entitled to the zone tax offset? | A2: No.

Relevant facts and circumstances: You work at X, which is located in a particular state. The closest small town to you is X. You have provided a map of the area showing the location of X compared to neighbouring towns.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 79A

Reasons for decision: Summary: A zone tax offset is provided under subsection 79A(1) of the Income Tax Assessment Act 1936 (ITAA 1936) for individuals who are residents of certain areas which are subject to uncongenial climatic conditions, are isolated, or where the cost of living is high. These areas are comprised of two Zones - Zone A and Zone B. Zone A comprises those areas where the above factors are more pronounced whilst Zone B comprises the less badly affected areas. A location in Zone A or Zone B that is particularly remote may be considered to lie in a 'Special Zone' area. Special Zone areas attract a higher rate of zone tax offset than the 'ordinary' area of Zone A or Zone B. The term 'Special Zone Area' is defined as being those points in Zone A or Zone B that were not, as at 1 November 1981, situated 250 kilometres or less by the shortest practicable surface route from the centre point of the nearest urban centre, with a census population from the 1981 census of not less than 2,500 (subsection 79A(3D) of the ITAA 1936). However as mentioned above, for the 'Special Zone' area offset to apply your site must first be located in either Zone A or Zone B. In your case, X lies to the east of the Zone A and Zone B borders for the purpose of the zone tax offset. Although we accept that X may be remote in respect of distance from the nearest urban centre, it does not fall within Zone A or Zone B, and therefore is not located in a Special Zoned Area. Consequently, you are not entitled to a zone tax offset.