Court action: Business SA claims multi-million dollar tax refund, claiming it’s a charity
THE state’s peak business lobby group has launched Supreme Court action to claw back more than $2.5 million in payroll taxes, because it is a “charity”.
THE state’s peak business lobby group has launched Supreme Court action to claw back more than $2.5 million in payroll taxes because it is a “charity”.
Business SA has claimed it “overpaid” $2,574,844 to Revenue SA in payroll tax from July 2009 to May 2014 and an undisclosed amount since June 2014, which should be exempt because it is a charity.
“(Business SA) is exempt from payroll tax ... as its sole contention has, at all material times, been the promotion of trade of commerce in South Australia and Australia,” the documents claim.
“The purpose of trade and commerce is a charitable purpose within the spirit and intendment of the preamble to the Statutes of Charitable Uses .. as applied in relevant case law, being a purpose beneficial to the community.
“Although the appellant provides services to and promotes the interests of its members, this is ancillary to, and perhaps a necessary part of, its achieving its sole or dominant purpose of the promotion of trade and commerce in South Australia and Australia.”
The documents also allege Revenue SA should pay six years interest on the claimed refund as well as costs.
But in documents lodged with the court last month, Revenue SA Office dismisses those claims saying not-for-profit Business SA’s “sole or dominant” purpose is to lobby and advocate for its members.
“Even if the appellants sole or dominant purpose can be characterised as the promotion of trade or commerce in SA (which is not admitted) this purpose is not a purpose within the spirit of intendment of the Statute of Charitable Act,” it said.
“Further and in the alternative, the appellant has not demonstrated what wages, if any, are paid or payable for work of a kind ordinarily performed for a charitable purpose, to a person engaged exclusively in that kind of work, within the meaning of the (charitable exemption) section.”
The documents reveal Business SA, through its tax agents PPM Tax and Legal, had written to Treasurer Tom Koutsantonis asking him to overturn Revenue SA’s ruling that the money be refunded but the request was refused.
“I consider the Objector’s (Business SA) dominant purpose is to be a leading business membership organisation in South Australia, and to act as an advocacy or lobbying body to advance the interests of, and address the concerns and issues that affect, its members,” Mr Koutsantonis replied.
Business SA markets itself as the “voice of business in SA”.
It offers support and advice to businesses in areas such as human resources management to work health and safety, environment, sustainability, exporting and importing.
The organisation is a member of the Australian Chamber of Commerce and Industry and is headed by Adelaide legal identity Nigel McBride who accepted a four-year term as chairman in mid-2012.