Three hours free, $20 a day after. The shopping centre car park is a commercial parking station after all.
Your client’s office sits within a kilometre of a paid shopping centre car park. First three hours free, escalating to a $20 daily maximum. Surely the centre car park is not a “commercial parking station” for FBT? Logan J agreed. The Full Federal Court has now reversed him.
Commissioner of Taxation v Toowoomba Regional Council [2026] FCAFC 50.
The Grand Central car park
The Council provided car parking to its employees. Within a kilometre sat Grand Central Shopping Centre, 4,000 spaces: free for three hours, $2 to $20 thereafter, free after 6pm, and a flat $7.50 for centre staff and out-of-town shoppers [14].
The Commissioner ruled Grand Central a commercial parking station: s 39A, s 136(1) FBTAA. The Council objected. Disallowed. Logan J upheld the Council’s appeal: “commercial” required an intention to make, or be aimed at, a profit-making purpose [5, 8].
Commercial does not mean profitable
McElwaine and Wheatley JJ held “commercial” means engaged in or in the nature of commerce [8, 50]. The text refers to a fee paid for all-day parking, never to revenue, expenses or profitability. The definition is satisfied by a single available space, which tells against any profitability requirement [44-45]. The 1994 amendment had to carve out kerbside metered parking because such parking, unlikely to be profitable, was otherwise within the definition [62]. An employer cannot know whether an operator a kilometre away turns a profit: construction must turn on objectively determinable facts [63].
Feutrill J agreed but on a narrower test: “commercial” describes a facility at which fees are paid in arm’s length transactions presumed to represent market value [94, 109]. On the ruled facts, Grand Central was not shown to fall outside that test [122]. Either way, Logan J’s profit-aimed construction is gone.
The practitioner lesson
First, the 1 km gateway is harder to escape. Section 39A(1)(a)(ii) requires a “commercial parking station” within a kilometre of the employer’s premises. On Logan J’s reasoning a paid centre car park in a loss position was arguably not commercial. That argument is dead. Re-run FBT exposure for any client near a paid centre car park and assume the gateway is met.
Second, the threshold filter still applies. A benefit only arises if the lowest all-day fee on the first business day of the FBT year exceeds the threshold: s 39A(1)(a)(iii). Confirm the comparator’s lowest all-day fee before assessing liability.
Third, Feutrill J’s market-value test is narrower than the joint reasons and may matter where the comparator is genuinely cross-subsidised.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.