Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed
to be correct at the time of issue, may not represent the
current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
XXXXXXXXXX 940768
Attention: XXXXXXXXXX
May 3, 1994
Dear Sirs:
Re: Subsection 127(9) of the Income Tax Act (the "Act") - School Buses
This is in reply to your letter dated March 18, 1994, wherein you requested our opinion as to whether school buses are "qualified transportation equipments" for the purposes of the investment tax credit ("ITC"), and more particularly, if school buses are eligible for the 10% ITC for "qualified small-business property" provided in subsection 127(9) of the Act. Unless as otherwise stated all references to the Act are to the Income Tax Act, S.C. 1970-71-72, c. 63 as amended consolidated to June 10, 1993.
As mentioned in your letter, subparagraph 4601(d)(ii) of the Income Tax Regulations specifically excludes school buses
from the definition of the expression "qualified transportation equipment".
However, the acquisition of a bus after December 2, 1992 and before 1994 could give rise to the 10% ITC for "qualified
small-business property" if the bus was a "qualified property" as defined in subsection 127(9) of the Act. A property could be a "qualified property" only if, among other things, it was acquired to be used primarily for one or more of the activities described in paragraph (c) of the definition of the expression "qualified property" in subsection 127(9) of the Act which does not include the transportation of students. Thus, we are of the opinion that the acquisition of a school bus could not give rise to the 10% ITC for "qualified small-business property".
We trust these comments will be of assistance to you.
Yours truly,
for Director
Manufacturing Industries,
Partnerships and Trusts Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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