Third

Session, 46th General Assembly

Elizabeth II, 2010

BILL 44

AN ACT TO AMEND THE

INCOME TAX ACT, 2000 NO.3

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 NOTES

This Bill would amend the Income Tax Act, 2000 to provide for

provincial harmonization with new federal shared benefit rules allowing an

equal split between parents for each payment, in cases where parents share

custody, respecting the Newfoundland and Labrador child benefit, including the nutritional supplement,

and the HST credit.

The Bill would also amend the

definition of "qualified relation" for the purpose of low income tax

reduction to allow a cohabitating spouse or common law partner who died in that

taxation year to be considered a qualified relation for determining eligibility

for low income tax reduction.

A BILL

AN ACT TO AMEND THE

INCOME TAX ACT, 2000 NO. 3

Analysis

S.21.1 Amdt.

Low income reduction

S.34 Amdt.

Harmonized sales tax credit

S.38 Amdt.

Newfoundland and Labrador child tax benefit

S.42 Amdt.

Research and development tax credit

NLR 43/09 Amdt.

6. Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

SNL2000 c.I-1.1

as amended

(1) Paragraph 21.1(1)(

a) of the Income Tax Act, 2000 is repealed and the

following substituted:

(a) "adjusted income" of an individual

for a taxation year means the total of all amounts, each of which would be the

income for the year of the individual and the individual's qualified relation

for the year, if any, within the meaning assigned by

section 122.6 of the

federal Act;

(2) Paragraph 21.1(1)(

c) is amended by adding

immediately after the word "Act" a comma and the words "or where

a cohabitating spouse or common law partner died during the taxation year, the

individual's deceased cohabitating spouse or common law partner".

(1) Section 34 of the Act is amended by adding

immediately after subsection (4) the following:

(4.1) Notwithstanding subsections (4) and (5), if an

eligible individual is a shared-custody parent, within the meaning assigned by

section 122.6 of the federal Act, but with the words "qualified dependant"

in that

section having the meaning assigned by subsection (1), in respect of

one or more qualified dependants for the year, the amount considered by

subsection (4) to have been paid during the specified month is equal to

the amount determined by the following formula:

1/2 (A +

B) where

A= is the amount determined by the formula in

subsection (4), calculated without reference to this subsection; and

B= is the amount determined by the formula in

subsection (4), calculated without reference to this subsection and subparagraph

( b )(ii) of the definition "eligible

individual" in

section 122.6 of the federal Act.

(4.2) Subsection (4.1) applies for amounts that are

considered to be paid during months after June 2011.

3. Paragraph 38(1 )(

a) of

the act is repealed and the following substituted:

(a) "adjusted income", "base

taxation year", "cohabitating spouse", "eligible individual",

"qualified dependant", "return of income" and "shared-custody

parent" have the meanings assigned to them under

section 122.6 of the

federal Act; and

4. (1)Paragraph 42(1)(

b) of the Act is repealed

and the following substituted:

(b) "research and development tax credit"

of a taxpayer at the end of a taxation year means the amount, equal to the total

of 15% of the total of all amounts each of which is an eligible expenditure

made by the taxpayer in the year, computed without reference to subsection

13(7.1) of the federal Act, and all amounts each of which is an amount included

under subsection (5) or (6).

(2) Subsection 42(5) of the Act is amended by

striking out the reference "subparagraph (1 )( b)(ii)"

and substituting the reference "paragraph (1)(b)".

(3) Subsection 42(6) of the Act is amended by

striking out the reference "subparagraph (1 )( b)(ii)"

and substituting the reference "paragraph (1)(b)".

NLR 43/09 Amdt.

(1) The

Child and Parental Benefits Regulations are amended by adding immediately

after

section 5 the following:

Child benefit payment

for shared -custody parent

5.1

(1) Notwithstanding

section 5, if an eligible individual is a shared-custody parent

in respect of one or more qualified dependants at the beginning of a month, the

overpayment considered by

section 5 to have arisen during the month is equal to

the amount determined by the formula

1/2 (A +

B) where

A= is the amount determined by the formula in

section 5, calculated without reference to this section; and

B= is the amount determined by the formula in

section 5, calculated without reference to this

section and subparagraph ( b )(ii) of the definition "eligible

individual" in

section 122.6 of the federal Act.

(2) Subsection (1) applies for amounts that are

considered to be paid during the months after June 2011.

(2) The regulations are amended by adding

immediately after

section 6 the following:

Nutritional supplement

payment for shared-custody parent

6.1

(1) Notwithstanding

section 6, if an eligible individual is a shared-custody parent

in respect of one or more qualified dependants at the beginning of a month, the

supplementary benefit provided by

section 6 for a month is equal to the amount

determined by the formula

1/2 (A +

B) where

= is the amount provided by

section 6,

calculated without reference to this section, and

= is the amount provided by

section 6,

calculated without reference to this

section and subparagraph ( b )(ii) of the definition "eligible

individual" in

section 122.6 of the federal Act.

(2) Subsection (1) applies for amounts that are considered

to be paid during the months after June 2011.

Commencement

6. Subsection 1(1) of this Act is considered to

have come into force on January 1, 2005.

Earl G. Tucker, Queen's Printer