Third

Session, 46th General Assembly

Elizabeth II, 2010

BILL 3

AN ACT TO AMEND THE

INCOME TAX ACT, 2000

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

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

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

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

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

HONOURABLE

THOMAS W. MARSHALL, Q.C.

Minister of Finance and President of Treasury Board

Ordered

to be printed by the Honourable House of Assembly

EXPLANATORY NOTE

The amendments proposed to the Income Tax Act, 2000 in this Bill would

provide clarification with respect to the amount a taxpayer may claim for

charitable and other donations, clarify when a claim for the research and

development tax credit must be made and remove an ambiguity as to whether tax

credits may be applied against the capital tax payable.

A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000

Analysis

S.10 Amdt.

Charitable and other gifts

S.42 Amdt.

Research and development tax credit

S.66.2 Amdt.

Capital tax payable

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

SNL2000 cI-1.1

as amended

1. Subsection 10(1) of the Income Tax Act, 2000 is repealed and the following substituted:

Charitable and other gifts

(1) For the purpose of computing the tax

payable under this Part by an individual for a taxation year, there may be

deducted the amount determined by the formula

(A x B) + [C

x (D - B)]

where

A is

the appropriate percentage for the year;

B is

the lesser of $200 and the individual's total gifts for the year;

C is

the highest percentage for the year; and

D is

the individual's total gifts used to determine the deducted amount under

subsection 118.1(3) of the federal Act by the individual for the year.

Section 42 of the Act is amended by adding

immediately after subsection (2) the following:

(2.1) A taxpayer is not entitled to make a deduction

under subsection (2) where the taxpayer does not file for the deduction on or

before the day that is one year after the taxpayer's filing due date for the particular

taxation year to which the deduction relates.

(1) Section 66.2 of the Act is amended by

adding immediately after subsection (1) the following:

(1.1) The amount of tax payable under this Part

shall not be reduced by a tax credit provided under this Act.

(2) Subsections 66.2(2) and (3) of the Act are

repealed and the following substituted:

(2) Subject to

section 66.3, where the capital of

a corporation, or the total of the capital for a related group, is $10 million

or less, the capital deduction is $5 million.

(3) Where the capital of a corporation, or the

total of the capital for a related group, is an amount other than the amount

referred to in subsection (2), the deduction is nil.

Earl G. Tucker, Queen's Printer