Docket
UT99104
Order UT00-02
IN
THE MATTER
of an appeal by
Patricia Nunn against a
decision of the Provincial Tax Commissioner, dated November 29, 1999.
BEFORE THE COMMISSION
on
Tuesday, the 30th day of May, 2000.
Ginger Breedon, Vice-Chair
Mary Burge, Commissioner
Norman Gallant, Commissioner
Order
Contents
Appearances & Witnesses
Reasons for Order
1. Introduction &
Background
2. Discussion & Findings
3. Disposition
Order
Appearances &
Witnesses
1. For
the Appellant:
Patricia Nunn
2. For the Provincial Tax
Commissioner
Counsel:
Ruth M. DeMone
Witness:
Mary Hennessey
Manager, Audit, Collection & Inspection Services
P.E.I. Department of the Provincial Treasury
3. For the Island Regulatory and
Appeals Commission
Staff:
Donald G. Sutherland
Director, Technical Services
Donna
Chandler
Recording Secretary
Reasons for Order
1.
Introduction & Background
On October 12, 1999, the
Department of Provincial Treasury ("Department") issued Notice
of Assessment No. 825 to Patricia Nunn, the Appellant herein ("Appellant"
or "Ms. Nunn"), in the amount of $1,114.30. A letter from the Department
that accompanied the Notice of Assessment describes the composition of the assessment
and reasons therefor. For ease of reference, the letter is set out, in part,
below:
October 12, 1999
CERTIFIED MAIL
Patricia Nunn
P.O. Box 1891
Charlottetown, PE C1A 7N5
Dear Ms. Nunn:
Information received recently indicates that on
August 3, 1996, you purchased a 1986 29' Wilderness Travel Trailer …
from Kensington Fiberglass Services. It appears that provincial sales tax
has not been paid to the Province of Prince Edward Island on this purchase.
Enclosed please find Notice of Assessment No.
825, which indicates your total assessment due of $1,114.30, composed of the
following:
Tax
due on
Purchase
$ 877.40
Interest to September 30,
1999
236.90
Total Amount
Due
$1,114.30
Please note that any amount due will continue
to bear interest at the current rate of 1.5% per month.
…
Yours truly,
(Sgd) Mary Hennessey
Mary
Hennessey, C.A.
Manager of Audit, Collection and Inspection Services
Enc.
[From Exhibit R-1]
On November 23, 1999, Ms. Nunn
filed a Notice of Objection with the Provincial Tax Commissioner ("Tax
Commissioner" or "Respondent") pursuant
to Section 9 of the Revenue Administration Act, R.S.P.E.I. 1988, Cap. R-13-2,
which reads as follows:
9. (1) Where a person considers that he is not liable to taxation under
a revenue Act or disputes liability for the amount assessed against him, he
may, within sixty days of the date of service or mailing of the notice of
assessment serve on the [Provincial Tax] Commissioner a notice of objection
setting out the reasons for the objection and all relevant facts.
(2) A notice of objection is sufficiently served if delivered
to the office of the Commissioner or sent by registered mail addressed to the
Commissioner.
(3) The Commissioner shall,
within sixty days of receipt of the notice of objection, reconsider the
assessment or estimate and vacate, confirm or vary it, and he shall thereupon
notify the objector of his decision by registered mail.
In her Notice
of Objection to the Tax Commissioner, Ms. Nunn makes the following
submission:
The reason for my objection is that I am not
liable for this debt. Although the invoice is in the name of Patsy Martell, on
August 3, 1996, the travel trailer was purchased by myself and my spouse Wade
Martell. A personal loan was taken out in both our names to pay for the
trailer. On December 22, 1996, my spouse and I separated, and he has held
possession of the travel trailer ever since that date. As of today, I have no
knowledge of the whereabouts to [sic] the trailer. As a result, I feel that it
is his liability to pay for this debt.
…
[From Exhibit R-1]
The decision of the Tax Commissioner on the Notice of Objection reads as follows:
November 29, 1999
Patricia Nunn
P.O. Box 1891
Charlottetown, PE
C1A 7N5
Dear Ms. Nunn:
This letter is in response to your Notice of
Objection dated November 23, 1999 regarding Notice of Assessment #825. I have
reviewed the circumstances surrounding your objection, and render my decision
as follows.
The invoice issued by Kensington Fiberglass for
the sale of a 1986 29 foot Wilderness is in the name of Patsy Martell. The
liability for revenue tax arose at the time of purchase of this taxable good.
The subsequent allocation of assets on the breakdown of your marriage, or
whereabouts of the trailer today, is irrelevant for purposes of assessing tax
to the 1996 purchase of the trailer.
Accordingly, I must confirm Notice of
Assessment #825 as assessed to you, the purchaser of the trailer, as evidenced
by the invoice issued by the supplier. If you feel this liability should be
split between you and your former spouse, this is an issue that you will have
to address through other avenues.
Yours truly,
(Sgd) James B. Ramsay
James B. Ramsay
Provincial Tax Commissioner
[From Exhibit R-1]
Ms. Nunn's
appeal of the above decision, which is dated December 23, 1999, is filed with
the Commission pursuant to Section 10 of the Revenue Administration Act,
R.S.P.E.I. 1988, Cap. R-13-2, which reads as follows:
10. (1) If the taxpayer or
collector is dissatisfied with the decision of the Commissioner under
subsection 9(3), he may, within thirty days from the date of mailing of the
decision, appeal to the Island Regulatory and Appeals Commission hereafter
referred to as the 'Commission'.
(2) Any appeal shall be commenced by serving upon the Commission a
notice of appeal in writing setting out the grounds of the appeal and stating
briefly the facts relative thereto.
(3) A notice of appeal is sufficiently served if delivered to the
office of the Commission or sent by registered mail addressed to the
Commission.
(4) On the hearing of the
appeal both the appellant and the Commissioner are entitled to be heard and to
submit further evidence.
(5) The Commission may, in writing, designate a person on its behalf to
hear an appeal under this section and any reference in this section to the
Commission includes a person so designated.
(6) Upon any appeal, the
Commission may affirm, vary or reverse the decision of the Commissioner and
shall give the appellant written notice of its decision by registered mail.
The hearing of the appeal was
conducted in Charlottetown on May 2, 2000.
2. Discussion
& Findings
In her appeal to this
Commission, Ms. Nunn makes the following submissions:
The
Revenue Tax Act, R.S.P.E.I. 1988, Cap. R-14 imposes on consumers of goods consumed in the
province the obligation to pay to the Minister tax at a rate of 10% on the
fair value of the goods. "Consumer' is defined in Section 1(b)
of the Act to mean a person who 'utilizes or intends to utilize within the
province goods for his own consumption or for the consumption of another
person at his own expense,…' 'Consumption' is defined in Section 1(c)
of the Act [to] include 'use'.
I did not have the use of the
travel trailer in question but, rather, my husband, Wade Martell, did and, in
fact, he not only had the use, but rented the travel trailer and received all
profits therefrom. He sold the travel trailer and, in fact, I had no knowledge
of where the trailer was, what it was used for and he has never disclosed to
me who now owns the travel trailer; although, I became aware in the summer of
1999 who the owner of the trailer was.
When the travel trailer was
purchased in 1996, a Chattel Mortgage was placed on the trailer and a Ford
Ranger and both my husband and I signed the Chattel Mortgage.
The trailer in question was always
claimed by Wade Harvey Martel as his and, as such, I do not believe I am a
consumer of goods and, thus, am not liable for the payment of tax on same. The
consumer of the goods was and is Wade Martell.
Additionally, I released any
interest I might have had in the trailer to my husband, Wade Martell, by
virtue of a Separation Agreement entered into between my husband and I dated
September 16, 1999. I had not had any access to, use of or ownership of the
trailer since I left the matrimonial home in December of 1996. I understand
that transfers between spouses for no consideration are exempt from payment of
taxes. As previously noted, my husband sold the trailer without my knowledge
or consent. My husband, Wade Martell and I agreed in the Separation Agreement
that all debts arising from the marriage had been paid with the exception of a
debt to the Canadian Imperial Bank of Commerce which was divided equally
between us.
[From Exhibit
A-1]
The Respondent takes the position that Ms. Nunn is the
consumer
of the goods within the meaning of the Revenue Tax Act, R.S.P.E.I. 1988, Cap. R-14, in that:
The act of purchasing or taking delivery of a taxable good
within the province of Prince Edward Island is identifiable as the act of
consumption for the purpose of taxation under the [Revenue Tax Act].
[Exhibit
R-2—Respondent's Brief & Authorities]
Section 4 of the Revenue Tax Act reads as follows:
4. …[E]very consumer of goods consumed in the
province shall, at the time of taking delivery, pay to the Minister for the
raising of revenue for provincial purposes, a tax at the rate of ten per cent
of the fair value of the goods.
Consumer
and
consumption
are defined in the Act
this way:
1(b)
'consumer' means a person who
(i) utilizes or intends to utilize within the
province goods for his own consumption, or for the consumption of another
person at his expense,
…
1(c)
'consumption' includes
(i) use,…
In addition, the Act contains the following definitions:
1(n)
'purchaser'
means a consumer who acquires goods at a retail sale within the province;
1(p)
'retail
sale'
means a sale to a consumer for the purpose of consumption and not for resale;
1(q)
'sale' includes,
(i) exchange, barter, sale on credit, conditional
sale, sale where the price is payable by instalments[sic], transfer of title,
conditional or otherwise, and any other contract whereby for a consideration a
person delivers goods to another,…
3. Disposition
An
Order affirming the decision of the Tax Commission and dismissing the appeal
will therefore be issued.
Order
UPON the appeal of
the Patricia Nunn against a
decision of the Provincial Tax Commissioner, dated November 29, 1999;
AND UPON hearing the evidence adduced
as well as what was alleged by counsel at a hearing
conducted in Charlottetown on May 2, 2000;
NOW
THEREFORE, for the reasons given in the annexed Reasons for Order,
IT IS ORDERED THAT
1.
The decision of the Provincial Tax Commissioner on appeal is affirmed; and,
2. The appeal is dismissed.
DATED at Charlottetown, Prince Edward Island, this
30th day of May, 2000.
BY THE COMMISSION:
Ginger Breedon,
Vice-Chair
Mary Burge, Commissioner
Norman Gallant, Commissioner
NOTICE
Section 12 of the
Island
Regulatory and Appeals Commission Act reads as follows:
12. The Commission may, in its absolute discretion, review, rescind or vary any
order or decision made by it or rehear any application before deciding it.
Parties to this proceeding
seeking a review of the Commission's decision or order in this matter may do so by filing
with the Commission, at the earliest date, a written Request for Review, which
clearly states the reasons for the review and the nature of the relief sought.
Sections 13.(1) and 13(2) of the
Act provide as follows:
13.(1) An appeal lies from a decision or order of the Commission to the Appeal
Division of the Supreme Court upon a question of law or jurisdiction.
(2) The appeal shall be made by filing a notice of appeal in the
Supreme Court within twenty days after the decision or order appealed from and the Civil
Procedure Rules respecting appeals apply with the necessary changes.