Langara College’s cheap parking causing income tax issues for staff

Staff members at Langara College who enjoy low-cost on-campus parking benefits are now being slapped with a big — and unexpected — tax bill.

After Canada Revenue Agency reassessed the taxation of college parking this year, some instructors are being asked to cough up more than $1,200 in back taxes — including some who never drove to work.

“It is so blatantly unfair,” said Cheryl McKeeman, instructor in the department of mathematics and statistics and an executive of the Langara Faculty Association.

Until now, faculty hasn’t paid tax on their parking benefits, whether they opted to pay $110 per year for a reserved spot in the faculty lot, or $10 a year for a pass that allowed them to park on a first-come, first-serve basis in the general lot.

“Faculty were offered and accepted parking passes with the understanding that the parking was [practically] free,” McKeeman said. “Suddenly those people are looking at $2,000 in back taxes and interest.”

Part-time faculty may have to pay for parking spaces they didn’t use

The new tax is particularly enraging to part-time faculty who acquired the $10 annual pass — known as scramble parking and deemed non-taxable by CRA — and only teach part time, or got the pass just because it was so cheap, in case they ever needed it.

Canada Revenue Agency has determined that the value of the parking is $1,200 for the year 2011, and $1,260 for 2012. Values for 2013-1014 are still being assessed, according to Dawn Palmer, associate vice-president of human resources at Langara.

“Most faculty are getting bills for close to $1,000 for the 2011 and 2012 years, but the actual amount of this bill will depend on the employee’s tax bracket,” McKeeman said.

Shirley Wacowich-Sgarbi, a chemistry instructor at Langara, said she has been dinged twice because her husband, Paulo Sgarbi,also teaches at the school.

“It’s a nasty surprise,” she said. “We followed the rules and then we get hit with this.”

The reason for the change in parking status us unknown

Cheryl Yeung, communications officer for the Pacific region at Canada Revenue Agency, was unable to comment directly about Langara’s situation or say if other institutions are being affected, but she did say that employer-provided parking is usually a taxable benefit for an employee. In the past, Langara was exempt from this taxation because of the “scramble parking” scenario in place. The reason for the sudden change in Langara’s scramble parking status is unknown.

Yeung said the amount of the benefit is based on an estimated value of the parking, minus any amount the employee pays to use the space. She added that Canada Revenue Agency defines the value as being the highest price that can be
obtained on the open market.

Photo: Jocelyn Aspa -- Faculty at Langara enjoy a discounted parking rate as an employment benefit.

Photo: Jocelyn Aspa — Faculty at Langara enjoy a discounted parking rate as an employment benefit.

While Langara is offering short-term loans to employees struggling with the hit, action being taken by the school is on the horizon.

“The college is appealing the decision and has engaged a tax specialist to assist with the documentation,” said Palmer.

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