Another tax case has provided some amusing mental gymnastics.  In Dreamtech International Pty Ltd v Commission of Taxation [2010] FCA 109 the issue was whether Dreamtech’s 140 inch, 5.82 tonne Hummer that could carry 14 people was a luxury car (and therefore liable to be assessed for Luxury Car Tax “LCT”). The first unsuccesful argument was that a Hummer is not car because a limousine is a large, luxurious car, as ordinarily understood and the ordinary meaning of the word ‘car’ did not include a vehicle such as the Hummer.

Kenny J also couldn’t see any error in the Tribunal’s finding that it was also luxurious:

“…that it would be reasonable to expect that a luxurious motor vehicle would have high quality suspension, good soundproofing to reduce noise from the engine and a good quality interior, such as leather seats and wood panelling or a finish of similar quality. While I readily accept Mr Flynn’s description of a luxurious motor vehicle, I do not accept that persons under the age of 30 years would necessarily agree with that description. The Hummer is clearly designed to attract younger people for the purpose of having a good time. It has all the characteristics which young people would, in my opinion, find luxurious. That is, luxuriously-styled seating covered with black vinyl, ice buckets and glasses for drinking, a DVD player and screens, no doubt to play music videos at very loud sound levels. In addition, it has a reflective polished metal interior roof fitted with what can only be described as disco lights. It is not difficult to accept that these features are attractive to young people who would see them as luxurious despite the fact that some of us, who have reached a certain age, would not necessarily agree. For those young people to whom this vehicle would appeal, a good quality suspension, soundproofing and quality interior including wood panel finish would simply not be relevant. I seriously doubt that any passenger would notice engine noise with a sound system battering the eardrums at very high decibel outputs. The fact that it is rather cramped inside and the ride may be rather firm would, I believe, not even be noticed by the types of persons attracted to use the services of this kind of vehicle.”; and

Given the market to which this vehicle is directed, it hardly comes as a surprise that in promotional material the vehicle is described as a chauffeur-driven limousine.”; and

I have no doubt that were the Hummer described as a luxury bus, it would not have anywhere near the same appeal as describing it as a luxury limousine. Although the promotional material does not necessarily lead to the inescapable conclusion the Hummer must be a limousine, it is indicative of the common description given to this vehicle in ordinary colloquial speech

Poor old Dreamtech have to pay LCT.

Creative commons attribution for the photograph. I also thank Stephen Walsh (a fellow member of chambers) for bringing this case to my attention.
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