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

Ruling: Q1: Are you entitled to a zone tax offset? | A1: No

Relevant facts and circumstances: You resided in a rural locality for ten and a half months of the financial year. The locality is not located in Zone A or Zone B.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 79A | Income Tax Assessment Act 1936 Schedule 2

Reasons for decision: Summary: Under section 79A of the Income Tax Assessment Act 1936 (ITAA 1936), residents of prescribed areas of Australia, known as Zone A and Zone B, are entitled to a tax offset. The tax offset is in recognition of the disadvantages to which they are subject because of the uncongenial climatic conditions, isolation and the high cost of living in comparison with parts of Australia not included in those prescribed areas. Schedule 2 of the ITAA 1936 defines the borders of these prescribed areas. Zone A is described as being: 1. All that portion of mainland Australia lying north of a line commencing at the westernmost point at which the 26 th parallel of south latitude intersects the western coastline thence east to the 141 st meridian of east longitude thence north to the southeastern boundary of the Shire of Boulia thence generally north-easterly by the boundaries dividing the Shires of Winton Flinders Dalrymple and Herberton from the Shires of Boulia Cloncurry McKinlay Richmond Etheridge and Mareeba to the 145 th meridian of east longitude thence north to the northern boundary of the Shire of Mareeba thence by that boundary and the boundary dividing the shires of Douglas and Cook to the eastern coastline. 2. All the islands forming part of Australia lying adjacent to the coastline of the portion of Australia described in paragraph 1 3. Macquarie Island 4. Norfolk Island 5. The Territory of Heard Island and McDonald Islands 6. The Australian Antarctic Territory 7. The Territory of Cocos (Keeling) Islands 8. The Territory of Christmas Island 9. Lord Howe Island In the state of Queensland, Zone B is described as being: All that portion of the mainland of Australia lying south of the southern boundary of Zone A and north of a line commencing at the northeastern corner of the Shire of Broadsound in the State of Queensland thence generally westerly and southerly by the boundaries dividing the Shires of Broadsound Belyando Jericho Bauhinia Booringa and Balonne from the Shires of Sarina Nebo Wangaratta Dalrymple Aramac Barcaldine Blackall Tambo Murweh and Paroo to the boundary dividing the states of Queensland and New South Wales…….. Subsection 79A(3D) of the ITAA 1936 allows a greater tax offset for residents of 'special areas' within either Zone A or Zone B that are located more than 250 kilometres from the nearest urban area with a population of 2,500 or more as of the 1981 census. In your case, you reside in a rural locality. The locality is located more than 300 kilometres east of the closest Zone B boundary as defined in Schedule 2 of the ITAA 1936. As the locality in which you reside is not located in Zone A or Zone B as defined above, you are not entitled to a zone tax offset.