First Session, 45th General Assembly

53 Elizabeth II, 2004

BILL 7

AN ACT TO AMEND THE INCOME TAX ACT, 2000

Received and Read the First Time

Second Reading

Committee

Third Reading

Royal Assent

HONOURABLE LOYOLA SULLIVAN

Minister of Finance and President of Treasury Board

Ordered to be printed by the Honourable House of Assembly

EXPLANATORY NOTES

The purpose of this Bill is to amend the Income Tax Act, 2000 , to implement a tax credit for former post secondary students who are repaying their Newfoundland and Labrador portion of their student loans.

Clause 1 would add a proposed

section 16.1 to the Act to provide the credit at 2 differing rates, one for disabled or single parent students and a second lower rate for all others. The base rates of 30% and 20% would reduce to 0% as income rises. This

section would also provide that the credit would not be available for a tax return for a year of death, a return of a testamentary trust or a return respecting the business income of a deceased proprietor or partner. This tax credit would be available for the 2003 tax year only.

Clause 2 would amend

section 23 of the Act, which specifies the priority of application for tax credits under the Act. This student loan credit would be applied before the equity tax credit and after all others.

Clause 3 would add to

section 26 of the Act a reference to the proposed

section 16.1. This would ensure that the rules respecting the calculation of allowable tax credits in the year of bankruptcy are also applied to

section 16.1.

Clause 4 would add a

Schedule to the Act listing rates of tax credits for various income levels.

A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000

Analysis

1. S.16.1 Added

Student loan tax credit

2. S.23 Amdt.

Ordering of credits

3. S.26 Amdt.

Credits in year of bankruptcy

4. Sch. Added

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

SNL2000 cI-1.1

as amended

1. The Income Tax Act, 2000 is amended by adding immediately after

section 16 the following:

Student loan tax credit

16.1

(1) Where, in a taxation year, an individual's taxable income does not exceed $50,000, there may be deducted from the tax otherwise payable by that individual an amount determined by the following formula:

A x B

where

A is the amount of principal paid in that year with respect to a loan issued under the Student Financial Assistance Act ; and

B is the appropriate tax credit factor listed in Column A of the

schedule to this Act.

(2) Notwithstanding subsection (1), where an individual is eligible to claim an amount under paragraph 9(1)(

b) with respect to his or her child or an amount under

section 12:

B is the appropriate tax credit factor listed in Column B of the

Schedule to this Act.

(3) Subsections (1) and (2) shall not apply to a return filed by an individual under subsections 70(2), 104(23) or 150(4) of the federal Act.

(4) Subsections (1) and (2) shall apply only to a return filed by an individual for the 2003 taxation year.

Section 23 of the Act is amended by renumbering it as subsection 23(1) and by adding immediately after that subsection, the following:

(2) Where computing an individual's tax payable under this Act, the following sections shall be applied in the listed order:

(

a) section 9;

(

b) section 17;

(

c) section 12;

(

d) section15;

(

e) section 13;

(

f) section 14;

(

g) section 18;

(

h) section 11;

(

i) section 10;

(

j) section 16;

(

k) section 20;

(

l) section 21;

(

m) section 19;

(

n) section 33;

(

o) section 47;

(

p) section 16.1; and

(

q) section

Section 26 of the Act is amended by adding immediately after the word "Act" where it last appears, the words and figures "and shall be read to include a reference to

section 16.1 of the Act".

4. The Act is amended by adding immediately after

section 95 the following:

Schedule

Student Loan Tax Credit Factor Table

Taxable income

Tax credit factor

Taxable income

Tax credit factor

Taxable income

Tax credit factor

Taxable income

Tax credit factor

Equal to or over

Equal to or over

Equal to or over

Equal to or over

35,000

0.1625

0.2625

40,100

0.1243

0.2243

45,200

0.0860

0.1860

0.2000

0.3000

35,100

0.1618

0.2618

40,200

0.1235

0.2235

45,300

0.0853

0.1853

30,100

0.1993

0.2993

35,200

0.1610

0.2610

40,300

0.1228

0.2228

45,400

0.0845

0.1845

30,200

0.1985

0.2985

35,300

0.1603

0.2603

40,400

0.1220

0.2220

45,500

0.0838

0.1838

30,300

0.1978

0.2978

35,400

0.1595

0.2595

40,500

0.1213

0.2213

45,.600

0.0830

0.1830

30,400

0.1970

0.2970

35,500

0.1588

0.2588

40,600

0.1205

0.2205

45,700

0.0823

0.1823

30,500

0.1963

0.2963

35,600

0.1580

0.2580

40,700

0.1198

0.2198

45,800

0.0815

0.1815

30,600

0.1955

0.2955

35,700

0.1573

0.2573

40,800

0.1190

0.2190

45,900

0.0808

0.1808

30,700

0.1948

0.2948

35,800

0.1565

0.2565

40,900

0.1183

0.2183

46,000

0.0800

0.1800

30,800

0.1940

0.2940

35,900

0.1558

0.2558

41,000

0.1175

0.2175

46,100

0.0793

0.1793

30,900

0.1933

0.2933

36,000

0.1550

0.2550

41,100

0.1168

0.2168

46,200

0.0785

0.1785

31,000

0.1925

0.2925

36,100

0.1543

0.2543

41,200

0.1160

0.2160

46,300

0.0778

0.1778

31,100

0.1918

0.2918

36,200

0.1535

0.2535

41,300

0.1153

0.2153

46,400

0.0770

0.1770

31,200

0.1910

0.2910

36,300

0.1528

0.2528

41,400

0.1145

0.2145

46,500

0.0763

0.1763

31,300

0.1903

0.2903

36,400

0.1520

0.2520

41,500

0.1138

0.2138

46,600

0.0755

0.1755

31,400

0.1895

0.2895

36,500

0.1513

0.2513

41,600

0.1130

0.2130

46,700

0.0748

0.1748

31,500

0.1888

0.2888

36,600

0.1505

0.2505

41,700

0.1123

0.2123

46,800

0.0740

0.1740

31,600

0.1880

0.2880

36,700

0.1498

0.2498

41,800

0.1115

0.2115

46,900

0.0733

0.1733

31,700

0.1873

0.2873

36,800

0.1490

0.2490

41,900

0.1108

0.2108

47,000

0.0725

0.1725

31,800

0.1865

0.2865

36,900

0.1483

0.2483

42,000

0.1100

0.2100

47,100

0.0718

0.1718

31,900

0.1858

0.2858

37,000

0.1475

0.2475

42,100

0.1093

0.2093

47,200

0.0710

0.1710

32,000

0.1850

0.2850

37,100

0.1468

0.2468

42,200

0.1085

0.2085

47,300

0.0703

0.1703

32,100

0.1843

0.2843

37,200

0.1460

0.2460

42,300

0.1078

0.2078

47,400

0.0695

0.1695

32,200

0.1835

0.2835

37,300

0.1453

0.2453

42,400

0.1070

0.2070

47,500

0.0688

0.1688

32,300

0.1828

0.2828

37,400

0.1445

0.2445

42,500

0.1063

0.2063

47,600

0.0680

0.1680

32,400

0.1820

0.2820

37,500

0.1438

0.2438

42,600

0.1055

0.2055

47,700

0.0673

0.1673

32,500

0.1813

0.2813

37,600

0.1430

0.2430

42,700

0.1048

0.2048

47,800

0.0665

0.1665

32,600

0.1805

0.2805

37,700

0.1423

0.2423

42,800

0.1040

0.2040

47,900

0.0658

0.1658

32,700

0.1798

0.2798

37,800

0.1415

0.2415

42,900

0.1033

0.2033

48,000

0.0650

0.1650

32,800

0.1790

0.2790

37,900

0.1408

0.2408

43,000

0.1025

0.2025

48,100

0.0643

0.1643

32,900,

0.1783

0.2783

38,000

0.1400

0.2400

43,100

0.1018

0.2018

48,200

0.0635

0.1635

33,000

0.1775

0.2775

38,100

0.1393

0.2393

43,200

0.1010

0.2010

48,300

0.0628

0.1628

33,100

0.1768

0.2768

38,200

0.1385

0.2385

43,300

0.1003

0.2003

48,400

0.0620

0.1620

33,200

0.1760

0.2760

38,300

0.1378

0.2378

43,400

0.0995

0.1995

48,500

0.0613

0.1613

33,300

0.1753

0.2753

38,400

0.1370

0.2370

43,500

0.0988

0.1988

48,600

0.0605

0.1605

33,400

0.1745

0.2745

38,500

0.1363

0.2363

43,600

0.0980

0.1980

48,700

0.0598

0.1598

33,500

0.1738

0.2738

38,600

0.1355

0.2355

43,700

0.0973

0.1973

48,800

0.0590

0.1590

33,600

0.1730

0.2730

38,700

0.1348

0.2348

43,800

0.0965

0.1965

48,900

0.0583

0.1583

33,700

0.1723

0.2723

38,800

0.1340

0.2340

43,900

0.0958

0.1958

49,000

0.0575

0.1575

33,800

0.1715

0.2715

38,900

0.1333

0.2333

44,000

0.0950

0.1950

49,100

0.0568

0.1568

33,900

0.1708

0.2708

39,000

0.1325

0.2325

44,100

0.0943

0.1943

49,200

0.0560

0.1560

34,000

0.1700

0.2700

39,100

0.1318

0.2318

44,200

0.0935

0.1935

49,300

0.0553

0.1553

34.100

0.1693

0.2693

39,200

0.1310

0.2310

44,300

0.0928

0.1928

49,400

0.0545

0.1545

34,200

0.1685

0.2685

39,300

0.1303

0.2303

44,400

0.0920

0.1920

49,500

0.0538

0.1538

34,300

0.1678

0.2678

39,400

0.1295

0.2295

44,500

0.0913

0.1913

49,600

0.0530

0.1530

34,400

0.1670

0.2670

39,500

0.1288

0.2288

44,600

0.0905

0.1905

49,700

0.0523

0.1523

34,500

0.1663

0.2663

39,600

0.1280

0.2280

44,700

0.0898

0.1898

49,800

0.0515

0.1515

34,600

0.1655

0.2655

39,700

0.1273

0.2273

44,800

0.0890

0.1890

49,900

0.0508

0.1508

34,700

0.1648

0.2648

39,800

0.1265

0.2265

44,900

0.0883

0.1883

50,000

0.0500

0.1500

34,800

0.1640

0.2640

39,900

0.1258

0.2258

45,000

0.0875

0.1875

50,001

0.0000

0.0000

34,900

0.1633

0.2633

40,000

0.1250

0.2250

45,100

0.0868

0.1868

©Earl G. Tucker, Queen's Printer