First Session, 48th

General Assembly

65 Elizabeth II,

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

S.5 Amdt.

Definitions

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

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 individuals taxable income for the taxation

year does not exceed $50,000, the individuals temporary deficit reduction levy

for the taxation year is nil;

(

b) where the individuals taxable income for the taxation

year exceeds $50,000 but does not exceed $55,000, the individuals temporary

deficit reduction levy for the taxation year is the amount calculated using the

formula,

(0.1 x

A) where

= 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 individuals temporary

deficit reduction levy for the taxation year is the amount calculated using the

formula,

B + (0.1 x

C) where

= $100, and

= 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

= $200, and

= 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

= $300, and

= 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

= $400, and

= 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

= $500, and

= 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

= $600, and

= 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

= $700, and

= 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

= $800, and

= 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

= $900, and

= 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

= $1,000, and

= 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

= $1,100, and

= 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

= $1,200, and

= 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

= $1,300, and

= 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

= $1,400, and

= 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

= $1,500, and

= 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

= $1,600, and

= 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

= $1,700, and

= 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), t he

following rules apply if an individual is bankrupt in a calendar year:

(

a) the

individuals 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

individuals 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 individuals 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 individuals 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 individuals 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.

Queen's Printer