A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.
Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.
Example 1—No public function
The state government puts out a tender for an entity to build and maintain a toll road; and passes legislation setting standards for the road, the levy of tolls and the resumption of land. A public company limited by shares is successful in the tender and completes construction and commences offering its road for public use. Despite the entity being a public company, offering services to the public and holding certain statutory powers, the entity would not be considered a public authority because it operates for private benefit rather than the public interest.
Example 2—No governmental authority
A local government incorporates a company to conduct a ‘beneficial enterprise’ under the Local Government Act 2009. The company is wholly owned and managed by the local government. It develops land for sale and uses any profits for initiatives that benefit the community. The company would not be a public authority for the purposes of the exemption in s.52(2) of the Land Tax Act. Although it may have public functions, it does not have governmental authority; it cannot do anything beyond what a private land developer could do.
Example 3—Inconsistent features that prevent the owner being a public authority
The state government decides to develop a small waterside recreational area open to the public. The only food outlet will be a privately-owned restaurant already existing on the restaurant owner’s neighbouring land. To ensure enjoyment of the recreational area, it is necessary to regulate alcohol consumption inside the area and issue fines for littering there. In exchange for the restaurant’s monopoly, legislation is passed requiring and empowering the restaurant owner to perform these roles. The restaurant owner would not be a public authority for the purposes of the exemption in s.52(2) of the Land Tax Act. Although it may have public functions and governmental authority, these are outweighed by inconsistent features that are extensive and important. Its public functions are secondary to its private function of operating a restaurant, and it distributes profit to its private owners.
Example 4—Public authority
The state government introduces new legislation regulating the use of river water by primary producers. The Clear River Board is established by regulation under that legislation. The board’s only functions are to deliver river water for irrigation and to implement measures to minimise flooding. The board owns land including the office building from which it operates. The legislation empowers the board to take ownership of land by compulsory acquisition for installing pump stations. It also empowers the board’s officers to enter private property to undertake earthworks to prevent flooding. The board may do so without the owner’s consent if the owner has not responded to notices or a flood is imminent. The board would be a public authority for the purposes of the exemption in s.52(2) of the Land Tax Act. It has public functions and governmental authority and has no features inconsistent with being a public authority. The way the board uses its land is consistent with this.
Commissioner of State Revenue
Date of issue: 26 November 2021
|Public Ruling||Issued||Dates of effect|
|LTA052.1.1||26 November 2021||26 November 2021||Current|