Facts
The spouses [A.D.] and [B.D.] live in St. Gallen. [A.D.] is employed as a non-self-employed sales representative. The daughter of [A.D.] and [B.D.] , [C.D.] , has been pursuing a six-semester, part-time training course since October 22, 2012. In the 2013 tax period, she earned income from non-self-employed work of CHF 25,332.--.
In the assessments for cantonal and communal taxes as well as for direct federal tax for the 2013 tax period, the spouses [D.] 's claimed cash payments by [A.D.] for commissions and acquisitions to [E. GmbH] of CHF 59,570.-- were not allowed as deductible business expenses. Furthermore, the child deduction claimed for [C.D.] and the interest deduction were not granted.
The spouses [D.] lodged an appeal against the assessments, which was rejected by the cantonal tax office. An appeal lodged by the spouses [D.] against the appeal decision was partially upheld by the Administrative Appeals Commission of the Canton of St. Gallen, granting a child deduction of CHF 6,500.-- and an interest deduction of CHF 700.--.
The Administrative Court of the Canton of St. Gallen dismissed an appeal lodged by the spouses [D.] against the decision of the Administrative Appeals Commission. The spouses [D.] requested that the judgment of the Administrative Court of St. Gallen be set aside and that they be granted the claimed deduction for business expenses as well as the child and interest deductions for their daughter [C.D.] for cantonal and communal taxes.
Considerations
The FSCA has dealt with the appeal in public law matters and found that the lower court issued a single judgment for cantonal and communal taxes as well as for direct federal tax, which is admissible insofar as the legal issues to be decided are regulated in the same way in federal law and harmonized cantonal law.
The FSCA dismissed the appeal regarding direct federal…