14

 

First Session, 48th General Assembly

65 Elizabeth II, 2016

BILL 14

AN ACT TO AMEND THE INCOME TAX ACT, 2000 NO. 2

Received and Read the First Time..................................................................

Second Reading.............................................................................................

Committee......................................................................................................

Third Reading................................................................................................

Royal Assent..................................................................................................

HONOURABLE CATHY BENNETT

Minister of Finance and President of Treasury Board

Ordered to be printed by the Honourable House of Assembly

 

EXPLANATORY NOTE

This Bill would amend the Income Tax Act, 2000 to impose a temporary deficit reduction levy.

A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000 NO. 2

Analysis


††††††† 1. S.5 Amdt.
Definitions

††††††† 2. S.7.1 Added
Temporary deficit reduction levy

††††††† 3.†† Commencement

 

 


Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:

SNL2000 cI-1.1
as amended

††††††† 1. Section 5 of the Income Tax Act, 2000 is amended by deleting the word "and" at the end of paragraph (f), by deleting the period at the end of paragraph (g) and substituting a semi-colon and the word "and", and by adding immediately after that paragraph the following:

†††††††††††† (h)"temporary deficit reduction levy" means the tax described in section 7.1.

 

††††††† 2. The Act is amended by adding immediately after section 7 the following:

Temporary deficit reduction levy

   †† 7.1 (1) An individual shall pay a deficit reduction levy in accordance with subsection (3) for each of the taxation years 2016 to 2019, inclusive, if the individual is resident in the province on the last day of each of those taxation years.

†††††††††††† (2)Notwithstanding subsection (1), a trust is not required to pay the temporary deficit reduction levy.

†††††††††††† (3)The temporary deficit reduction levy payable by an individual for a taxation year shall be calculated using the formula in the following paragraph that applies to the individual for the taxation year, subject to subsections (4) to (6):

†††††††††††† (a)where the individualís taxable income for the taxation year does not exceed $50,000, the individualís temporary deficit reduction levy for the taxation year is nil;

†††††††††††† (b)where the individualís taxable income for the taxation year exceeds $50,000 but does not exceed $55,000, the individualís temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

(0.1 x A)

where

†††††††††††††††††† A = the lesser of $1,000 and the amount of the individual's taxable income in excess of $50,000 for the taxation year;

†††††††††††† (c)where the individual's taxable income for the taxation year exceeds $55,000 but does not exceed $60,000, the individualís temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

B + (0.1 x C)

where

†††††††††††††††††† B = $100, and

†††††††††††††††††† C = the lesser of $1,000 and the amount of the individual's taxable income in excess of $55,000 for the taxation year;

†††††††††††† (d)where the individual's taxable income for the taxation year exceeds $60,000 but does not exceed $65,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

D + (0.1 x E)

where

†††††††††††††††††† D = $200, and

††††††††††††††††††† E = the lesser of $1,000 and the amount of the individual's taxable income in excess of $60,000 for the taxation year;

†††††††††††† (e)where the individual's taxable income for the taxation year exceeds $65,000 but does not exceed $70,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

F + (0.1 x G)

where

††††††††††††††††††† F = $300, and

†††††††††††††††††† G = the lesser of $1,000 and the amount of the individual's taxable income in excess of $65,000 for the taxation year;

†††††††††††† (f)where the individual's taxable income for the taxation year exceeds $70,000 but does not exceed $75,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

H + (0.1 x I)

where

†††††††††††††††††† H = $400, and

†††††††††††††††††††† I = the lesser of $1,000 and the amount of the individual's taxable income in excess of $70,000 for the taxation year;

†††††††††††† (g)where the individual's taxable income for the taxation year exceeds $75,000 but does not exceed $80,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

J + (0.1 x K)

where

†††††††††††††††††††† J = $500, and

†††††††††††††††††† K = the lesser of $1,000 and the amount of the individual's taxable income in excess of $75,000 for the taxation year;

†††††††††††† (h)where the individual's taxable income for the taxation year exceeds $80,000 but does not exceed $100,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

L + (0.1 x M)

where

††††††††††††††††††† L = $600, and

††††††††††††††††† M = the lesser of $1,000 and the amount of the individual's taxable income in excess of $80,000 for the taxation year;

††††††††††††† (i)where the individual's taxable income for the taxation year exceeds $100,000 but does not exceed $125,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

N + (0.1 x O)

where

†††††††††††††††††† N = $700, and

†††††††††††††††††† O = the lesser of $1,000 and the amount of the individual's taxable income in excess of $100,000 for the taxation year;

††††††††††††† (j)where the individual's taxable income for the taxation year exceeds $125,000 but does not exceed $175,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

P + (0.1 x Q)

where

††††††††††††††††††† P = $800, and

†††††††††††††††††† Q = the lesser of $1,000 and the amount of the individual's taxable income in excess of $125,000 for the taxation year;

†††††††††††† (k)where the individual's taxable income for the taxation year exceeds $175,000 but does not exceed $250,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

R + (0.1 x S)

where

†††††††††††††††††† R = $900, and

††††††††††††††††††† S = the lesser of $1,000 and the amount of the individual's taxable income in excess of $175,000 for the taxation year;

††††††††††††† (l)where the individual's taxable income for the taxation year exceeds $250,000 but does not exceed $300,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

T + (0.1 x U)

where

††††††††††††††††††† T = $1,000, and

†††††††††††††††††† U = the lesser of $1,000 and the amount of the individual's taxable income in excess of $250,000 for the taxation year;

†††††††††† (m)where the individual's taxable income for the taxation year exceeds $300,000 but does not exceed $350,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

V + (0.1 x W)

where

†††††††††††††††††† V = $1,100, and

††††††††††††††††† W = the lesser of $1,000 and the amount of the individual's taxable income in excess of $300,000 for the taxation year;

†††††††††††† (n)where the individual's taxable income for the taxation year exceeds $350,000 but does not exceed $400,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

X + (0.1 x Y)

where

†††††††††††††††††† X = $1,200, and

†††††††††††††††††† Y = the lesser of $1,000 and the amount of the individual's taxable income in excess of $350,000 for the taxation year;

†††††††††††† (o)where the individual's taxable income for the taxation year exceeds $400,000 but does not exceed $450,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

Z + (0.1 x AA)

where

††††††††††††††††††† Z = $1,300, and

††††††††††††††† AA = the lesser of $1,000 and the amount of the individual's taxable income in excess of $400,000 for the taxation year;

†††††††††††† (p)where the individual's taxable income for the taxation year exceeds $450,000 but does not exceed $500,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

BB + (0.1 x CC)

where

††††††††††††††† BB = $1,400, and

††††††††††††††† CC = the lesser of $1,000 and the amount of the individual's taxable income in excess of $450,000 for the taxation year;

†††††††††††† (q)where the individual's taxable income for the taxation year exceeds $500,000 but does not exceed $550,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

DD + (0.1 x EE)

where

††††††††††††††† DD = $1,500, and

†††††††††††††††† EE = the lesser of $1,000 and the amount of the individual's taxable income in excess of $500,000 for the taxation year;

††††††††††††† (r)where the individual's taxable income for the taxation year exceeds $550,000 but does not exceed $600,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

FF + (0.1 x GG)

where

††††††††††††††††† FF = $1,600, and

††††††††††††††† GG = the lesser of $1,000 and the amount of the individual's taxable income in excess of $550,000 for the taxation year; and

†††††††††††† (s)where the individual's taxable income for the taxation year exceeds $600,000, the individual's temporary deficit reduction levy for the taxation year is the amount calculated using the formula,

HH + (0.1 x II)

where

††††††††††††††† HH = $1,700, and

†††††††††††††††††† II = the lesser of $1,000 and the amount of the individual's taxable income in excess of $600,000 for the taxation year.

†††††††††††† (4)For the purpose of subsection (3), the following rules apply if an individual is bankrupt in a calendar year:

†††††††††††† (a)the individualís taxable income for the calendar year for the purposes of this section is deemed to be the sum of all amounts, each of which is his or her taxable income for a taxation year ending in the year;

†††††††††††† (b)the individualís temporary deficit reduction levy for the calendar year shall be allocated to and payable in respect of each taxation year ending in the year in the manner described in paragraphs (c) to (e);

†††††††††††† (c)for a taxation year that is deemed to end under subparagraph 128(2)(d)(ii) of the federal Act on the day immediately before the day on which the individual became a bankrupt, the amount of the individualís temporary deficit reduction levy payable for the year is the amount that would be determined in accordance with subsection (3) if the taxation year were the only taxation year of the individual ending in the calendar year;

†††††††††††† (d)for a taxation year that ends after the day on which the individual became a bankrupt, the temporary deficit reduction levy payable in respect of a return filed under subparagraph 128(2)(e) of the federal Act is deemed to be nil; and

†††††††††††† (e)for any other return filed for a taxation year that ends after the day on which the individual became a bankrupt, the temporary deficit reduction levy payable in respect of the return is the amount calculated using the formula

A - B

where

†††††††††††††††††† A = the individualís temporary deficit reduction levy for the calendar year as determined under subsection (3) as if each reference in that subsection to "taxation year" were read as a reference to "calendar year", and

†††††††††††††††††† B = the amount of the individualís temporary deficit reduction levy, if any, in respect of the taxation year described in paragraph (c).

†††††††††††† (5)For the purpose of subsection (3), the taxable income of an individual who dies in a particular year does not include income that is reported in a return filed as a result of an election made under subsection 70 (2), 104 (23) or 150 (4) of the federal Act.

†††††††††††† (6)The amount of the temporary deficit reduction levy payable by an individual for a taxation year that ends on or before December 31, 2016 is 50 per cent of the amount otherwise calculated under subsection (3).

Commencement

††††††† 3. This Act comes into force on July 1, 2016.