Air miles taxable.

• Author: Teresa Mitchell

Some frequent flyers have had their wings clipped by the taxman. The Tax Court of Canada recently ruled that air travel points accumulated on the job and used for free personal trips are a taxable employment benefit. Revenue Canada has long held this point of view, but the matter had never been submitted to a judge for a ruling. In a rare example of harmony in litigation, both sides in this test case were happy with the ruling; Revenue Canada because the judge upheld their longstanding policy and the taxpayer, because the judge established a formula for valuing the air points which placed the benefit at far less than the cost of a full-fare ticket. He set the value...