The NSW Civil and Administrative Tribunal has affirmed a decision of the Chief Commissioner of State Revenue (NSW) not to exercise his discretion to determine a taxpayer was not a member of a group for payroll tax purposes.
In June 2011, the Commissioner issued payroll tax assessments to the taxpayer for the 2008 to 2010 tax years following his decision to group the taxpayer with 4 other companies.
At first instance, in Lombard Farms Pty Ltd v Chief Comr of State Revenue [2013] NSWADT 17, the ADT held the taxpayer did not operate independently of 2 of the other group companies, and therefore did not meet the requirements of the discretion sought.
The taxpayer appealed and the Appeal Panel of the NSW Administrative Decisions Tribunal, in Lombard Farms Pty Ltd v The Chief Commissioner of State Revenue [2013] NSWADTAP 42, allowed the appeal, finding the ADT, at first instance, had erred in its construction of the Commissioner’s discretion under s 79 of the Payroll Tax Act 2007 (NSW). The Appeal Panel held the test was “a matter of judgment, or degree”. Accordingly, the Appeal Panel remitted the matter to the Tribunal for redetermination in accordance with its reasons.
The Tribunal, on remittal, concluded the taxpayer had not satisfied it that during the relevant period, [that] it was more likely than not that the business carried on by the taxpayer was carried on independently of the businesses carried on by the other companies, and that there was no connection (in the sense required by s 79(2)) between the carrying on of the business of the taxpayer and the carrying on of the business of each of the other companies.
(Lombard Farms Pty Ltd v Chief Comr of State Revenue [2014] NSWCATAD 132, NSW Civil and Administrative Tribunal, Isenberg SM, 10 September 2014)
[LTN 176, 11/9/14]