Snowy Monaro Regional Council v Chief Commissioner of State Revenue [2017] NSWCATAD 14

Date of judgement 12 January 2017 Proceeding No. 1610391
Judge(s) Roger Hamilton SC, Senior Member
Court or Tribunal New South Wales Civil and Administrative Tribunal
Legislation cited Pay-roll Tax Act 1971

Payroll Tax Act 2007

Taxation Administration Act 1996
Catchwords REVENUE LAW - payroll tax - exemptions - local councils - hostels - WORDS AND PHRASES - hostel
Cases cited Australian Nursing Federation v Alcheringa Hostel Incorporated [2004] FCA 375


The case concerned an application for review of the Chief Commissioner of State Revenue’s (“Chief Commissioner”) decision that the Applicant, Snowy Monaro Regional Council (“the Council”), was liable to pay payroll tax on wages paid to staff at the Yallambee Lodge Aged Care Facility (“Yallambee Lodge”) from 1 July 2015, pursuant to s. 60(2)(d)(v) of the Payroll Tax Act 2007 (“the PTA”).

Yallambee Lodge, operated by the Council, was built in 1995 and initially provided basic services to aged persons. The facility presently operates as a specialised aged care facility that provides palliative care and assistance to its elderly residents. Yallambee Lodge has 40 beds in total, with 38 reserved for permanent residents and two reserved for respite care.

On 16 October 2015, the Chief Commissioner advised the Council that Yallambee Lodge constituted a ‘hostel’ within the meaning of s. 60(2)(d)(v) of the PTA (which had the effect that any wages paid by the Council in connection with Yallambee Lodge would not be considered as exempt wages).

On 11 December 2015, the Council lodged an objection to the Chief Commissioner’s decision. This was disallowed on 2 May 2016.

On 27 June 2016, an Application for Administrative Review was lodged by the Council in the NSW Civil and Administrative Tribunal.

The Issue

The issue for determination by the Tribunal was whether Yallambee Lodge was a “hostel” within the meaning of s. 60(2)(d)(v) of the PTA. The term “hostel” is not defined in PTA.

Statutory Framework

Section 58 of the PTA relevantly provides:

Subject to section 60, wages are exempt wages if they are paid or payable by a council or county council, within the meaning of the Local Government Act 1993.

Section 60 of the PTA relevantly provides:

  1. An exemption under this Division does not apply to wages paid or payable for or in connection with:

    1. any of the activities referred to in subsection (2), or

  2. Subsection (1) applies to the following activities:


    1. the conduct of:
      1. abattoirs,
      2. public markets,
      3. parking stations,
      4. cemeteries or crematoria,
      5. hostels,
      6. an activity prescribed by the regulations,



The Chief Commissioner referred to the Second Reading Speech for the Pay-roll Tax Bill 1971 and submitted that the term “hostel’” in s. 60(2)(d)(v) of the PTA should be interpreted broadly. This submission was made in reliance on the Second Reading Speech for the Pay-roll Tax Bill 1971 which refers to the rationale for s. 60 of the PTA as one of ensuring fairness between the private and public sectors in relation to payroll tax levied for non-business activities of Local government authorities.  The Chief Commissioner submitted that Yallambee Lodge was operating commercially by competing against the private sector, and therefore consistent with the legislative purpose of s. 60, the wages paid by the Council should not be exempt from payroll tax.


Senior Member Hamilton considered the dictionary meaning of the term “hostel”, as well as the considerations of Ryan J in Australian Nursing Federation v Alcheringa Hostel Incorporated [2004] FCA 375, and determined that the essential features of a “hostel” involve:

  1. A notion of transience in that the hostel is used for a limited time or limited purpose;

  2. No right or expectation of permanent residence;

  3. A low level of care and service provided by the hostel operator;

  4. Often there will be various shared facilities such as kitchens, bathrooms and laundries;

  5. A hostel often provides only simple amenities;

  6. It is generally low cost; and

  7. Frequently there are special qualifications to entry into the hostel such as having a certain status or occupation.

Senior Member Hamilton was not persuaded by the words of the Second Reading Speech to take a broad view of the meaning of the word “hostel”. Rather, the Tribunal found that it was much more likely that the legislature intended “hostel” to have its ordinary meaning. Senior member Hamilton also stated that the potential to compete with the private sector was not determinative of this definitional issue.

Senior Member Hamilton held that Yallambee Lodge did not satisfy the above criteria and therefore was not a “hostel” for the purposes of the PTA. The evidence supplied by the Council, which was accepted by the Tribunal, demonstrated that Yallambee Lodge was distinguishable from a hostel on the following basis:

  1. Transience was not present at Yallambee Lodge as 38 out of 40 of the beds were occupied by permanent residents;

  2. The residents were encouraged to treat Yallambee Lodge as their home for as long as they stay;

  3. The level of care provided by staff is high;

  4. Although there are shared facilities for dining and recreation, residents enjoy self-contained single accommodation with ensuite bathrooms;

  5. The cost of residing at Yallambee lodge is subject to a means test, but can involve payment of a refundable deposit of up to $350,000; plus a daily fee or fees which is not low cost; and

  6. The process of being assessed for acceptance as a resident at Yallambee Lodge involves an in-depth external assessment of an aged person’s needs, health and means by a team charged with this duty by the Commonwealth government.


The decision of the Chief Commissioner is revoked.

Link to decision

Snowy Monaro Regional Council v Chief Commissioner of State Revenue [2017] NSWCATAD 14

Last updated: 18 July 2017