CCI executive officer John Nicolaou

CCI ruled charity case

Western Australia’s peak business group has scored a big win over the state tax office, arguing successfully that it is a charitable organisation and therefore exempt from payroll tax.
State Administrative Tribunal president Justice John Chaney ruled this month that the main purpose of the Chamber of Commerce and Industry WA was charitable, even though it has about 320 staff and earned a total income last year of $95 million.
The CCI argued that its main purpose was to support the business community in general.
The Commissioner of State Revenue had countered that CCI’s main purpose was to provide services to its members, rather than any purpose that was directed to the benefit of the public generally.
The commissioner cited a range of planning documents and annual reports that emphasised the importance of service provision.
In 1997, CCI moved to a fee-for-service model that resulted in it charging for many of its services.
As a result, its service revenue has more than doubled during the past decade to $80 million, while revenue from member subscriptions has been static, at about $7.1 million.
CCI executive officer John Nicolaou told the tribunal that most of the service revenue, about $65 million, came from its apprenticeship-training program.
Weighing all the evidence, Justice Chaney concluded that, “the driving force of CCI’s operations is the promotion of a strong business community in Western Australia.
“It is apparent that access to advice, information and services to strengthen individual businesses is seen to be an integral part of the successful business community,” he said in his ruling.
While CCI won the main case, Justice Chaney did not accept its argument that all wages should be exempt from payroll tax.
He has referred that assessment back to the commissioner.


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