March 12, 1999 Volume 6, Number 12

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Revenue Canada audit of campus parking issue continues

The University is pursuing the limited options available to it through the Income Tax Act to try to resolve a parking dispute with Revenue Canada officials, who see the institution's parking lots as a new tax source worth more than $1 million [see Oct. 30/98 and Jan. 8/99 OCN].

Revenue Canada regards the difference between what it deems a fair market value for the campus parking spaces and what U of S employees now pay as a taxable benefit. Vice-president Tony Whitworth has described the proposed assessment as "completely unfair"; the Faculty Association has termed it "preposterous."

Laura Kennedy, associate v-p (financial services) says Revenue Canada is "anxious to have this issue resolved...[but] we haven't seen a lot of movement on their part."

She says recent discussions with them have focused more on process than on outcome.

"One of the options we've discussed is that of conducting a test case [under the Income Tax Act] that would involve a number of typical employees [who rent a parking spot and having a judge decide on the merits of our case. The advantage of this approach is that it would avoid everyone's being taken through the courts.

"But you do have to have the agreement of Revenue Canada to pursue the test case option," she adds, "and to date we haven't got their assurances that they'd proceed with that sort of an option."

She says the University has tried to impress upon the Revenue Canada delegation the magnitude of the institution's operation and the amount of work involved if we were to have to re-assess each employee - "not only from our perspective but also from theirs."

March 15 meeting

The administration has called a meeting of representatives of all the bargaining units for March 15 in order to discuss what direction might be taken from that date.

The Faculty Association, taking issue with Revenue Canada on the matter, has determined that it can be dealt with only through individual appeals, not as a class action.

The per person cost to file an appeal with the federal court is $100. To that end, the Association is compiling a list of individuals who would want to initiate court action if Revenue Canada acts on its earlier indication that the tax benefit would be assessed at values between $66 a month for a hot stall and $60 a month for a cold one.

Faculty members wanting to pursue an appeal are advised to phone the Association at -5609.

Meanwhile, the University is having its own appraisal done of its parking lots by Suncorp Valuations Ltd., of Saskatoon, with which to challenge Revenue Canada's appraised value of them. The appraisal is expected to be done in time for the March 15 meeting.

Meanwhile, if Revenue Canada reassesses the employees for a taxable benefit for parking, Kennedy says, the University will have no option but to comply with the new rules in 1999.

"The University will be required to withhold additional income tax on a monthly basis for the taxable benefit. Given Revenue Canada's current position of $66 a month, this taxable benefit could be as high as $56 a month [$66 less $8 currently charged].

"If tax appeals are successfully filed by employees, the employees who have appealed will receive a refund, plus interest, from Revenue Canada, if they've previously paid the tax."

If the University's challenge of Revenue Canada's assessment of campus parking rates fails, the University will have no option but to withhold additional income tax each month, on a taxable-benefit basis that could be as high as $56 a month. Individual appealers only would get refunds, if their appeals were successful.

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