BILL 61

An Act to Amend the New Brunswick Income Tax Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Subsection 14(2) of the New Brunswick Income Tax Act, chapter N-6.001 of the Acts of New Brunswick, 2000, is repealed and the following is substituted:

14(2) The tax payable under this Part for the 2001 taxation year and subsequent taxation years by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be, referred to in this Division as the "amount taxable", is

(a) 9.68% of the amount taxable if the amount taxable does not exceed $30,754;

(b) $2,977 plus 14.82% of the amount by which the amount taxable exceeds $30,754 and does not exceed $61,509;

(c) $7,535 plus 16.52% of the amount by which the amount taxable exceeds $61,509 and does not exceed $100,000; and

(d) $13,894 plus 17.84% of the amount by which the amount taxable exceeds $100,000.

2 The Act is amended by adding after section 16 the following:

Indexing

16.1(1) In this section,

"relevant provision" means section 14, 17 to 23, 26 or 27.

16.1(2) For the purpose of computing the tax payable by an individual for a taxation year, each amount expressed in dollars in a relevant provision shall be adjusted so that the amount to be used under the relevant provision for the year is the total of

(a) the amount that would, but for subsection (4), be the amount to be used under the relevant provision for the immediately preceding taxation year, and

(b) the product obtained by multiplying

(i) the amount referred to in paragraph (a),

by

(ii) the amount, adjusted in the prescribed manner and rounded to the nearest one-thousandth, or, if the result obtained is equidistant from two consecutive one-thousandths, to the higher one-thousandth, that is determined by the formula

A

-

1

B

   

 

where

A is the Consumer Price Index for Canada for the 12 month period that ended on September 30 next before that year, and

B is the Consumer Price Index for Canada for the 12 month period immediately preceding the period mentioned in the description of A.

16.1(3) For the purpose of paragraph (2)(a), the amount to be used under the relevant provision for the 2001 taxation year shall be deemed to be:

(a) $7,411.60485 with respect to paragraph (a) of the description of B in subsections 17(2) and 18(2);

(b) $6,293.26425 and $629.8461, respectively, with respect to paragraph (b) of the description of B in subsections 17(2) and 18(2);

(c) $629.8461 with respect to the description of C in subsections 17(2) and 18(2);

(d) $7,411.60485 with respect to the description of B in section 19;

(e) $3,618.956263 with respect to the amount in section 23;

(f) $26,940.99135 with respect to the threshold amount in the description of B in section 23; and

(g) $1,677.5109 with respect to the description of C in subsection 26(1).

16.1(4) If an amount to which subsection (2) applies is not a multiple of one dollar when adjusted as provided in this section, it shall be rounded to the nearest multiple of one dollar or, if it is equidistant from two such consecutive multiples, to the higher multiple.

16.1(5) In this section, the Consumer Price Index for Canada for any 12 month period is the result arrived at by

(a) aggregating the Consumer Price Index for Canada, as published by Statistics Canada under the authority of the Statistics Act (Canada), adjusted in the prescribed manner, for each month in that period,

(b) dividing the aggregate obtained under paragraph (a) by 12, and

(c) rounding the result obtained under paragraph (b) to the nearest one-thousandth or, if the result obtained is equidistant from two consecutive one-thousandths, to the higher one-thousandth.

3 Subsection 17(2) of the Act is amended

(a) by striking out "$7,231" and substituting "$7,412";

(b) by striking out

$6,140 - (C - $614)

and substituting

$6,293 - (C - $630)

(c) by striking out "the greater of $614" and substituting "the greater of $630".

4 Subsection 18(2) of the Act is amended

(a) by striking out "$7,231" and substituting "$7,412";

(b) by striking out

$6,140 - (C - $614)

and substituting

$6,293 - (C - $630)

(c) by striking out "the greater of $614" and substituting "the greater of $630".

5 Section 19 of the Act is amended by striking out "$7,231" and substituting "$7,412".

6 Subsection 20(2) of the Act is amended

(a) by striking out "$14,047" and substituting "$15,453";

(b) by striking out "$11,661" and substituting "$11,953".

7 Subsection 21(2) of the Act is amended

(a) by striking out "$7,231" and substituting "$8,466";

(b) by striking out "$4,845" and substituting "$4,966".

8 Section 23 of the Act is amended

(a) by striking out "$3,531" and substituting "$3,619";

(b) by striking out "$26,284" and substituting "$26,941".

9 Subsection 26(1) of the Act is amended

(a) by striking out "$1,637" and substituting "$1,678";

(b) by striking out "32%" and substituting "41.14%".

10 Subsection 27(1) of the Act is amended

(a) by striking out "$4,293" and substituting "$6,000";

(b) by striking out

$2,941 - (D - $2,000)

and substituting

$3,500 - (D - $2,050)

(c) by striking out "the greater of $2,000" and substituting "the greater of $2,050".

11 Subsection 29(1) of the Act is amended

(a) by striking out "$200" and substituting "$400";

(b) by striking out "$60" and substituting "$120".

12 Section 38 of the Act is amended by adding "49.1," before "61".

13 Subdivision g of Division B of Part I of the Act is repealed.

14 The Act is amended by adding after section 49 the following:

Subdivision h.1

Low-income Tax Reduction

Low-income tax reduction

49.1(1) In this section

"adjusted income" means adjusted income as defined in section 122.5 of the Federal Act; («revenu rajusté»)

"eligible individual", for a taxation year, means an individual, other than a trust, who is resident in New Brunswick on December 31 of that taxation year; («particulier admissible»)

"qualified dependant" means qualified dependant as defined in section 122.5 of the Federal Act; («personne à charge admissible»)

"qualified relation" means qualified relation as defined in section 122.5 of the Federal Act; («proche admissible»)

"tax otherwise payable" means the amount that would, but for this section and sections 50 and 61, be the tax otherwise payable under this Act. («impôt payable par ailleurs»)

49.1(2) Where an eligible individual applies on a prescribed form for a deduction under this section in respect of a taxation year and files the application with the individual’s return of income for the taxation year, there may be deducted from the tax otherwise payable for the taxation year by the eligible individual the amount, if any, by which the total of

(a) $260,

(b) $260 for a person who is the qualified relation of the eligible individual for the taxation year, and

(c) $260, where the eligible individual has no qualified relation for the taxation year and is entitled to deduct an amount for the taxation year under paragraph 118(1)(b) of the Federal Act in respect of a qualified dependant of the eligible individual for the taxation year,

exceeds

(d) 5% of the amount, if any, by which

(i) the eligible individual’s adjusted income for the taxation year,

exceeds

(ii) $10,000.

49.1(3) Notwithstanding subsection (2), where an individual is a qualified relation of another individual for a taxation year, only one of those individuals may apply under subsection (2) for the taxation year.

49.1(4) Notwithstanding subsection (3), where an eligible individual, in this subsection referred to as the "applying eligible individual", has applied under subsection (2) in respect of a taxation year, a qualified relation of the applying eligible individual, if the qualified relation is also an eligible individual, may deduct from the qualified relation’s tax otherwise payable for the taxation year an amount determined by the formula

A - B

where

A is the amount determined under subsection (2) which the applying eligible individual may deduct from the applying eligible individual’s tax otherwise payable for the taxation year; and

B is the lesser of

(a) the amount that is the applying eligible individual’s tax otherwise payable for the taxation year, and

(b) the amount deducted under subsection (2) by the applying eligible individual from the applying eligible individual’s tax otherwise payable for the taxation year.

15 Section 55 of the Act is amended by striking out "17%" and substituting "16%".

16 Paragraph 56(1)(a) of the Act is amended in the portion preceding subparagraph (i) by striking out "17%" and substituting "16%".

17 Section 57 of the Act is amended

(a) by renumbering the section as subsection 57(1);

(b) in subsection (1)

(i) in paragraph (a) in the portion preceding subparagraph (i) by striking out "4.5%" and substituting "4%";

(ii) in paragraph (b)

(A) by striking out "17%" and substituting "16%";

(B) by striking out "4.5%" and substituting "4%";

(c) by adding after subsection (1) the following:

57(2) The business limit for the purposes of subsection (1) shall be deemed to be 150% of the amount of the business limit otherwise determined under section 125 of the Federal Act.

18 Section 60 of the Act is amended

(a) in subsection (1) by repealing the definition "eligible corporation" and substituting the following:

"eligible corporation" means a corporation incorporated in Canada, other than a corporation that holds a broadcasting licence issued by the Canadian Radio-television and Telecommunications Commission, that has a permanent establishment in New Brunswick; («corporation admissible»)

(b) by repealing subsection (3) and substituting the following:

60(3) Where an eligible corporation that produces an eligible project in New Brunswick files with its return of income for a taxation year, a New Brunswick film tax credit certificate issued in accordance with the regulations, the corporation is eligible for a refundable film tax credit for the taxation year which shall be determined by multiplying the rate prescribed by regulation by the amount of eligible salaries paid in the taxation year.

(c) by adding after subsection (3) the following:

60(3.1) The rate prescribed by regulation under subsection (3) shall not exceed 40%.

(d) in subsection (4)

(i) in paragraph (a) by striking out "January 1, 2002" and substituting "January 1, 2007";

(ii) in paragraph (b) by adding "and" at the end of the paragraph;

(iii) by striking out "; and" at the end of paragraph (c) and substituting a period;

(iv) by repealing paragraph (d).

19 Subsection 124(1) of the Act is amended by adding after paragraph (e) the following:

(e.1) prescribing the rate for the purposes of subsection 60(3);

20 For the purposes of sections 55 and 57 of the New Brunswick Income Tax Act as amended by sections 15 and 17 of this Act, where a corporation has a taxation year part of which is in 2000 and part of which is in 2001, tax payable for the taxation year shall be calculated as follows:

(a) by dividing the taxation year into two notional taxation years, the first ending on December 31, 2000, and the second beginning on January 1, 2001;

(b) by apportioning the amount taxable between the two notional taxation years proportionately according to the number of days in each;

(c) by calculating

(i) tax for the first notional taxation year in accordance with the New Brunswick Income Tax Act as it was on December 31, 2000, and

(ii) tax for the second notional taxation year in accordance with the New Brunswick Income Tax Act as it is deemed to have been on January 1, 2001; and

(d) by adding together the amounts determined under paragraph (c), and the total is the tax payable in respect of that taxation year.

21(1) Subject to subsection (2), this Act shall be deemed to have come into force on January 1, 2001.

21(2) Section 2 of this Act comes into force on January 1, 2002.