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Statutes of Newfoundland 1994


CHAPTER 13

CHAPTER 13

AN ACT TO AMEND THE RETAIL SALES TAX ACT

(Assented to June 9, 1994)

Analysis

1. S.2 Amdt.
Definitions

2. S.13 R&S
Rental property

3. S.14 Amdt.
Utility services

4. S.15(1)(a) R&S
Other services

5. S.16 Amdt.
Tax on insurance premiums

6. S.21 Amdt.
Exempt property or use

7. S.52(1)(n.1) Added
Regulations

8. Commencement

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


RSN 1990 cR-15 as amended

1. (1) Section 2 of the Retail Sales Tax Act is amended by adding immediately after paragraph (a) the following:

(a.1) "computer program" means any thing, data, information, knowledge, instruction or a program used to direct, instruct or inform a computer, machine or device, whether or not the supply of it is considered to be a service or a product, that is retained or transferred in any manner whatsoever either tangible or intangible including cards, tapes, disks, diskettes, drums, chips, boards or telecommunications and includes

(i) a program for the solution of a problem through the use of a computer, including the sequence of automatic data processing equipment instructions necessary to solve a problem,

(ii) instructions to enable or cause a computer to control or perform a function, or to produce a desired result, either directly or through the working of other equipment,

(iii) system programs, application programs and any other programs or subdivisions, including assemblers, compilers, routines, generators and utility programs,

(iv) a program prepared to the special order of a purchaser,

(v) pre-written programs including any modifications, customization or paramatization of those programs, and

(vii) a document or manual designed to facilitate the use of a program or part;

(2) Paragraph 2(l) of the Act is repealed and the following substituted:

(l) "premium" means the single or periodic payment required for a contract of insurance and includes all dues, assessments, transaction fees and other consideration charged by the insurer or the insurer's agent;

(3) Subparagraph 2(s)(v) of the Act is repealed and the following substituted:

(v) another contract where for a price or other consideration a person gives possession, title or a right to use to another person, conditionally or otherwise;

(4) Paragraph 2(u) of the Act is amended by adding immediately after the word "includes" the words and comma "computer programs,".

2. Section 13 of the Act is repealed and the following substituted:

Rental property

13. (1) A consumer who consumes or uses tangible personal property under a written or oral agreement for rent, hire, lease, license or other arrangement, that is not a sale, and which requires periodic payments, shall pay to the Crown a tax of 12% of the consideration due or payable by him or her respecting that agreement.

(2) The tax under subsection (1) shall be collected and this Act and the regulations shall be applied as if

(a) the right of the person to consume or use the tangible personal property under the written or oral agreement was tangible personal property; and

(b) each obligation of the consumer to pay consideration for the agreement is a retail sale at which the consumer is the retail purchaser, the person renting, hiring, leasing or licensing the property is the seller and the consideration is the purchase price.

(3) Where an agreement referred to in subsection (1) includes an option for the consumer to become the owner of that property, the tax under subsection (1) shall be paid on

(a) the total consideration for that agreement as the consideration becomes due; and

(b) the total consideration for exercising the option at the time the option is exercised whether or not the consideration is payable at that time,

and consideration under paragraph (a) on which tax has been paid shall not be included in the consideration referred to under paragraph (b).

(4) In this section, consideration includes payments made with respect to the use, service, protection, upkeep, warranty, cancellation or other thing incidental or related to the property forming the subject matter of the agreement.

3. (1) Subsection 14(1) of the Act is amended by deleting the word "or" at the end of paragraph (a), by deleting the period at the end of paragraph (b) and substituting a semicolon and the word "or" and by adding the following immediately after paragraph (b):

(c) the use of a private line utility system and the connection to it.

(2) Section 14 of the Act is amended by adding immediately after subsection (1) the following:

(1.1) Notwithstanding subsection (1), when a person uses a private line utility system with a connection in the province, the tax shall be imposed in the proportion that the length of the private line utility system located in the province bears to the total length of the private line utility system located both in and out of the province, provided that where microwave, satellite or other non-line connections are used, the tax shall be pro rated as if the connections were effected by means of physical lines connecting the terminals, and where the service rate is payable only partly for use of the private line utility system, the minister may determine the proportion of the service rate attributable to that use having regard to standard proportion calculations used by the industry.

(3) Subsection 14(5) of the Act is amended by deleting the word "and" at the end of paragraph (b), by deleting the period at the end of paragraph (c) and substituting a semicolon and the word "and" and by adding immediately after paragraph (c) the following:

(d) "private line utility system" means the equipment or facilities available through a utility system for the exclusive use of a person.

4. Paragraph 15(1)(a) of the Act is repealed and the following substituted:

(a) repairs to and work done on or in connection with tangible personal property;

5. (1) Subsection 16(1) of the Act is repealed and the following substituted:

Tax on insurance premiums

16. (1) A person who maintains a contract of insurance relating to property, risk, peril or events in the province shall pay to the Crown a tax at the rate of 12% of the premium for that insurance.

(2) Subsection 16(3) of the Act is repealed and the following substituted:

(3) Where a contract of insurance relates to property, risk, peril or events both in and out of the province, the tax shall be calculated only upon the portion of the payment relating to property, risk, peril or events in the province according to the following formula:

T = P/I x C

Where

T = consideration paid for the taxable portion of the contract of insurance;

P = total monetary value of property, risk, peril or events covered by the contract of insurance which are in or relate to the province;

I = total monetary value of property, risk, peril or events covered by the contract of insurance; and

C = consideration paid for the entire contract of insurance.

6. (1) Paragraphs 21(a), (b), (c) and (l) of the Act are repealed.

(2) Paragraphs 21(d), (e), (f) and (g) of the Act are repealed.

7. Subsection 52(1) of the Act is amended by adding immediately after paragraph (n) the following:

(n.1) prescribing the circumstances under which rebates of tax may be granted or denied and setting restrictions on the granting or denying of rebates of tax;

Commencement

8. Section 4 and subsection 6(1) are considered to have come into force on April 1, 1994.

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