Full Federal Court confirms hospital, university & shopping centre car parks can be 'commercial' for FBT purposes
01/05/2026
In Commissioner of Taxation v Toowoomba Regional Council [2026] FCAFC 50, the Full Federal Court delivered a significant reversal, closing the door opened by Logan J. Allowing the Commissioner’s appeal, the Court confirmed that the Grand Central Shopping Centre car park in Toowoomba is a ‘commercial parking station’ for FBT purposes, reinforcing the Australian Taxation Office (ATO)’s position in TR 2021/2.
The story so far
Toowoomba Regional Council applied for a private ruling asking whether Grand Central's car park — which offers three hours’ free parking, a $20 all-day maximum cap, and multiple free-parking concessions — qualifies as a ‘commercial parking station’ under sections 39A and 136 of the FBTAA. The answer matters because the Council's premises are location within one kilometre of the centre, which would trigger FBT on free employee parking.
How the case unfolded
Round 1: February 2025 - Logan J (FCA)
‘Commercial’ requires a profit-making purpose. As the Grand Central car park was operated to attract shoppers rather than generate profit, the Council succeeded.
Round 2: April 2026 - McElwaine, Feutrill & Wheatley JJ (FCAFC)
The Full Federal Court rejected that approach, holding that ‘commercial’ simply means engaged in commerce, with no profit motive required. The Commissioner’s appeal was allowed.
What the Full Court held
The majority (McElwaine and Wheatley JJ) held that the statutory text does not confine a ‘permanent commercial car parking facility’ to operations run for profit. Instead, the definition requires physical permanence, availability to the public in the ordinary course of business, and the payment of a fee — nothing more. Parliament cast the net wide to address tax inequity, and that introducing a profit requirement would bring an unverifiable internal management test that the legislation simply does not support.
Feutrill J reached the same result, but by a different route, stating that a ‘commercial parking station’ must be a facility where fees reflect arm's length market value. On that view, the Explanatory Memorandum examples, including penalty-rate shopper car parks, are not appropriate comparators precisely because their fees do not reflect that market value. However, that is not the same as requiring the operator to be profit-motivated.
The Full Court also noted that the 1994 amendment expressly excluded kerbside parking meters, which are unlikely to be profitable, confirming that profitability was never a precondition in the original text.
What this means for you
The ATO's interim decision impact statement (DIS), which directed continued reliance on TR 2021/2, has been vindicated. Employers who stopped treating shopping centre, hospital, university, or hotel car parks as ‘commercial parking stations’ following Logan J's decision should now review their compliance position for:
- the current FBT year (ended 31 March 2026) and consider their car parking FBT position
- the prior FBT year (ended 30 March 2025) and consider whether amended returns are needed.
For employers who did comply with TR 2021/2 throughout, no change is required.
How SW can help
For employers who may now have FBT exposure on car parking because of the Toowoomba decision, SW can assist in assessing your position and ensuring compliance with the ATO’s current interpretation. This includes reviewing historical and current FBT obligations, identifying potential amendments, and advising on practical next steps.
For tailored support with your FBT car parking obligations, our CTSplus FBT team can help you navigate the requirements and manage your compliance obligations with confidence and clarity. To find out more, click here to email our CTS team and a member of our team will be in touch within one business day. You can also visit our CTSplus FBT page to learn more about how we can support your FBT compliance needs.
