Content area
Full Text
The State and Territory payroll tax Acts have a common origin, in the Commonwealth Act of 1941, which itself adopted much of the language which had in the previous year been inserted in the Income Tax Assessment Act to establish a system of deduction of tax from wages and salaries. Thus there is a strong historical link between the system of Commonwealth taxation in respect of wages and the State tax upon payrolls, which has been maintained in recent years by the adoption in State payroll tax legislation of the operation of the Commonwealth Fringe Benefits Tax Assessment Act as criterion of liability to payroll tax.
As desirable as is the maintenance of a coincidence between liability to pay fringe benefits tax and to make income tax deductions on the one hand, and liability to pay payroll tax on the other, it is easy to overlook the circumstance that the policy objectives of the taxes are different, and in consequence that legislation enacted for Commonwealth purposes may operate in a way which is not wholly consistent with the fiscal objectives of the State and Territory legislations. Moreover, apparently inconspicuous differences in the phrasing of legislation in different jurisdictions may have quite significant differences in outcome.
A recent illustration of the latter point may be found in the decision of the ACT Administrative Appeals Tribunal in CPS Credit Union Coop (ACT) Ltd v Commissioner for ACT Revenue (1994) 94 ATC 2120. The ACT Payroll Tax Act (1987) imposes tax on wages relevantly defined as "an amount paid or payable to a person in relation to his or her capacity as an employee...and includes (a) a payment by way of remuneration, salary, commission, bonus allowance or other benefit". The legislation also contains the usual circular provision that payment of wages in respect of an employee's services, but made to a third party, should be taken to be payment of wages to the employee: circular because payment to an employee is part of the definition of "wages" upon which the provision operates.
The amounts in question were payments to a superannuation fund under an arrangement whereby wages payable to the employees,...