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1998/99 Legislative Session: 3rd Session, 36th Parliament

FIRST READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

HONOURABLE JOY K. MacPHAIL

MINISTER OF FINANCE AND CORPORATE RELATIONS

BILL 33 - 1998

INCOME TAX AMENDMENT ACT (No. 2), 1998

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the

Province of British Columbia, enacts as follows:

1 Sections 9 to 11 of the Income Tax Act, R.S.B.C. 1996, c. 215, are repealed and

the following substituted:

Definitions for BC Family Bonus

(1) For the purposes of sections 10 to 13:

"adjusted earned income" means, for an individual for a taxation year,

the total of

(

a) all amounts that are earned income of the individual for the taxation year, and

(

b) if the individual had a cohabiting spouse at the end of the taxation year, all

amounts that are earned income of the cohabiting spouse for the taxation year;

"adjusted income" , "base taxation year" , "cohabiting

spouse" , "eligible individual" , "qualified

dependant" and "return of income" have the same meaning as in

section 122.6 of the federal Act;

"earned income" has the same meaning as in

section 63 (3) of the

federal Act.

(2) Section 1 (7) (

i) of this Act does not change a reference to Canada in the

definitions of "eligible individual" and "return of income", as those

definitions apply for the purposes of sections 10 to 13 of this Act, to a reference to

British Columbia.

BC Family Bonus

(1) As an exception to

section 2, an overpayment on account of a person's

liability under this Act for a taxation year is deemed to have arisen during a month in

relation to which the year is the base taxation year if the following requirements are

met:

(

a) the person has filed a return of income for that year;

(

b) if the Provincial minister so demands, the person's cohabiting spouse at the end of

the taxation year has filed a return of income for that year;

(

c) the person was resident in British Columbia for a period that includes the first

day of the month and that began before that day.

(2) If a person who was resident in British Columbia during the period referred to in

subsection (1) (

c) was also resident outside British Columbia during that period, an

overpayment that would otherwise be deemed to have arisen during the month referred to in

that subsection is deemed to arise only if

(

a) the person was present in British Columbia for a period of at least 14 days during

that month, or

(

b) the person comes within a class of persons exempted by regulation from the

requirement to be present in British Columbia for the period referred to in paragraph (a).

(3) Subject to subsections (4) and (5), the overpayment deemed to have arisen during a

month under subsection (1) in respect of the person's liability under this Act for a

taxation year is equal to the total of

(

a) the amount of the BC basic family bonus determined in accordance with the

regulations under subsection (4), and

(

b) the amount of the BC earned income benefit determined in accordance with the

regulations under subsection (4).

(4) The Lieutenant Governor in Council may make regulations prescribing the amounts, or

the calculation of the amounts, of the BC basic family bonus and the BC earned income

benefit, as referred to in subsection (3).

(5) Section 122.61 (2) of the federal Act applies for the purposes of this section.

(6) For the purposes of this section, if a person was resident in Canada for only part

of a taxation year or was not resident in Canada at any time in a taxation year,

(

a) the person's income for the year is deemed to be equal to the amount that would

have been the person's income for the year had the person been resident in Canada

throughout the year, and

(

b) the person's earned income for the year is limited to that portion of the amount

that would be the person's earned income that is included because of

section 114 or 115

(1) of the federal Act in computing the person's taxable income or taxable income earned

in Canada, as the case may be, for the year.

(7) For the purposes of this section, if an individual becomes bankrupt in a taxation

year,

(

a) the individual's earned income for the year includes the individual's earned income

for the taxation year that begins on January 1 of the calendar year that includes the date

of bankruptcy,

(

b) the individual's income for the year includes the individual's income for the

taxation year that begins on January 1 of the calendar year that includes the date of

bankruptcy, and

(

c) the total of all amounts deducted under

section 63 of the federal Act in computing

the individual's income for the year includes the amount deducted under that

section for

the individual's taxation year that begins on January 1 of the calendar year that includes

the date of bankruptcy.

Notice requirements and other rules about eligible individuals and spouses

(1) Section 122.62 (1), (2) and (4) of the federal Act applies for the

purposes of sections 10 to 13 of this Act.

(2) If

(

a) at any time before the end of a particular month a taxpayer has become the

cohabiting spouse of an eligible individual, and

(

b) the taxpayer and the eligible individual jointly so elect, before the end of the

11th month after the particular month, in a form that is acceptable to the Provincial

minister and filed with the federal minister,

for the purpose of determining the amount deemed under

section 10 (1) to be an

overpayment on account of the individual's liability under this Act for the base taxation

year in relation to the particular month, the taxpayer is deemed to have been the eligible

individual's cohabiting spouse throughout the period that began immediately before the end

of that base taxation year and ended when the taxpayer became the individual's cohabiting

spouse.

(3) If

(

a) before the end of a particular month an eligible individual in respect of a

qualified dependant begins to live separate and apart from the individual's cohabiting

spouse, because of a breakdown of their marriage, for a period of at least 90 days that

includes a day in the particular month, and

(

b) the individual so elects, before the end of the 11th month after the particular

month, in a form that is acceptable to the Provincial minister and filed with the federal

minister,

for the purpose of determining the amount deemed under

section 10 (1) to be an

overpayment arising in any month after the particular month on account of the individual's

liability under this Act for the base taxation year in relation to the particular month,

subject to any subsequent election under subsection (2) or (4),

(

c) the individual's adjusted income for the year is deemed to be equal to the

individual's income for the year, and

(

d) the individual's adjusted earned income for the year is deemed to be equal to the

individual's earned income for the year.

(4) If

(

a) before the end of a particular month the cohabiting spouse of an eligible

individual in respect of a qualified dependant dies, and

(

b) the individual so elects, before the end of the 11th month after the particular

month, in a form that is acceptable to the Provincial minister and filed with the federal

minister,

for the purpose of determining the amount deemed under

section 10 (1) to be an

overpayment arising in any month after the particular month on account of the individual's

liability under this Act for the base taxation year in relation to the particular month,

subject to any subsequent election under subsection (2) or (3),

(

c) the individual's adjusted income for the year is deemed to be equal to the

individual's income for the year, and

(

d) the individual's adjusted earned income for the year is deemed to be equal to the

individual's earned income for the year.

Section 42 (2) (a) (iii) is repealed and the following substituted:

(iii) the amount that by

section 9 (1) is deemed to be the individual's earned income

or adjusted earned income,

(iii.1) the amount that, by

section 11 (2), (3) or (4), is deemed to be the

individual's adjusted income, .

Commencement

3 This Act comes into force on July 1, 1998.

Explanatory Notes

SECTION 1: [Income Tax Act, re-enacts sections 9 to 11]

the proposed

section 9 adds

definitions of "adjusted earned income" and

"earned income" and makes

definitions from the federal Income Tax Act applicable

for the purposes of the BC Family Bonus;

the proposed

section 10

(

a) moves the calculation formula for the BC Family Bonus to regulations, allowing the

addition of a new BC earned income benefit, and

(

b) incorporates into our Act federal rules that are currently simply cross-referenced;

the proposed

section 11 incorporates into our Act federal rules that are currently

simply cross referenced.

SECTION 2: [Income Tax Act, amends

section 42 (2) (a)]

adds a right to appeal determinations that are no longer required for the federal Act,

but are still needed for the BC Family Bonus program;

updates cross references to provisions that are being incorporated into our Act by the

proposed

section 11 (2) to (4).

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