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Legislative Assembly of New Brunswick
Status of Legislation - First Reading Bill
An Act to Amend the New Brunswick Income Tax Act
 
Legislature :
55
Session :
2
Bill No. :
57
Member :
Hon. Volpé
First Reading :
2005-6-2
Second Reading :
2005-6-3
Committee of the Whole :
Amended :
Third Reading :
2005-6-28
Royal Assent :
2005-6-30
Download PDF :
  Bill 57         
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Text of Bill :
Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:



1                           Subsection 16.1(1) of the New Brunswick Income Tax Act, chapter N-6.001 of the Acts of New Brunswick, 2000, is amended in the definition "relevant provision" by striking out "26 or 27" and substituting "26, 27 or 49.1".



2                           Subsection 55.1(1) of the Act is amended in subparagraph (a)(ii) of the definition "tax calculation change" by striking out "that is referred to in subsection 57(1.1), (2) or (2.1)" and substituting "that is referred to in section 57".



3                           Section 57 of the Act is amended



(a)               in subsection (1)



(i)         in paragraph (a) in the portion preceding subparagraph (i) by striking out "2.5%" and substituting "2%";



(ii)       in paragraph (b) by striking out "2.5%" and substituting "2%";



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



57(1.01)       For the period commencing on July 1, 2006, and ending on June 30, 2007, the references to "2%" in subsection (1) shall be read as references to "1.5%".



57(1.02)       For the period commencing on July 1, 2007, the references to "1.5%" in subsection (1) shall be read as references to "1%".



(c)               in subsection (1.1)



(i)         by repealing paragraph (c);



(ii)       in paragraph (d) by striking out the period at the end of the paragraph and substituting ", and ending on June 30, 2005,";



(iii)    by adding after paragraph (d) the following:



(e)                for the first amount, "$450,000" and, for the second amount, "$1,233" for the period commencing on July 1, 2005, and ending on June 30, 2006,



(f)                for the first amount, "$475,000" and, for the second amount, "$1,302" for the period commencing on July 1, 2006, and ending on June 30, 2007, and



(g)               for the first amount, "$500,000" and, for the second amount, "$1,370" for the period commencing on July 1, 2007.



(d)               by repealing subsection (2);



(e)               by repealing subsection (2.1) and substituting the following:



57(2.1)          The business limit otherwise determined under section 125 of the Federal Act shall be deemed for the purposes of subsection (1) to be $425,000 for the period commencing on July 1, 2004, and ending on June 30, 2005.



(f)                by adding after subsection (2.1) the following:



57(2.2)          The business limit otherwise determined under section 125 of the Federal Act shall be deemed for the purposes of subsection (1) to be $450,000 for the period commencing on July 1, 2005, and ending on June 30, 2006.



57(2.3)          The business limit otherwise determined under section 125 of the Federal Act shall be deemed for the purposes of subsection (1) to be $475,000 for the period commencing on July 1, 2006, and ending on June 30, 2007.



57(2.4)          The business limit otherwise determined under section 125 of the Federal Act shall be deemed for the purposes of subsection (1) to be $500,000 for the period commencing on July 1, 2007.



4                           Section 59 of the Act is amended



(a)               by adding after subsection (7) the following:



59(7.1)          Subsection (7) applies to the research and development tax credit for eligible expenditures made before January 1, 2003.



(b)               in subsection (8) by striking out "(2) to (7)" and substituting "(2) to (7.1)".



5(1)                   Section 1 of this Act shall be deemed to have come into force on January 1, 2005.



5(2)                   Sections 2 and 3 of this Act come into force on July 1, 2005.



5(3)                   Section 4 of this Act shall be deemed to have come into force on January 1, 2003.



EXPLANATORY NOTES



Section 1



The existing provision reads as follows:



16.1(1)          In this section,



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



Section 2



The existing provision reads as follows:



55.1(1)          In this section



"tax calculation change" means



(a)               in relation to a corporation to which section 57 applies,



(i)         the enactment of subsection 57(1.1),



(ii)       any amendment to this Act that effects a change to any amount expressed in dollars that is referred to in subsection 57(1.1), (2) or (2.1), or....



Section 3



(a)(i) and (ii)    The existing provision reads as follows:



57(1)               Notwithstanding section 55, for a year when a corporation has been allowed a deduction from the tax payable under the provisions of subsection 125(1) of the Federal Act, the corporation shall pay tax equal to the aggregate of



(a)               2.5% of the amount that is the proportion of the least of the amounts calculated under paragraphs 125(1)(a), (b) and (c) of the Federal Act in respect of the corporation for the taxation year that



(i)         the amount of its taxable income earned in the year in New Brunswick,



bears to



(ii)       the total amount of the portions of its taxable income earned in the year in all provinces, determined in accordance with the Federal Regulations made for the purposes of the definition "taxable income earned in the year in a province" in subsection 124(4) of the Federal Act, and



(b)               13% of an amount calculated by deducting from the total taxable income earned in the year in New Brunswick the amount on which the 2.5% rate is applied in paragraph (a).



(b)               New provisions.



(c)(i) to (ii)         The existing provision reads as follows:



57(1.1)          For the purposes of subsection (1), where a corporation is a member of a partnership, the amount determined pursuant to paragraph 125(1)(a) of the Federal Act, in relation to a corporation for each taxation year, shall be the amount that would be the corporation's specified partnership income within the meaning of subsection 125(7) of the Federal Act if the amounts expressed in dollars in the description of "M" in the definition of "specified partnership income" in that subsection were read as



(a)               Repealed: 2004, c.29, s.17.



(b)               Repealed: 2004, c.29, s.17.



(c)                for the first amount, "$400,000" and, for the second amount, "$1,096" for the period commencing on January 1, 2003, and ending on June 30, 2004, and



(d)               for the first amount, "$425,000" and, for the second amount, "$1,165" for the period commencing on July 1, 2004.



(c)(iii)      New provisions.



(d)               The existing provision reads as follows:



57(2)               The business limit otherwise determined under section 125 of the Federal Act shall be deemed for the purposes of subsection (1) to be $400,000 for the period commencing on January 1, 2003.



(e)                The existing provision reads as follows:



57(2.1)          Notwithstanding subsection (2), the business limit otherwise determined under section 125 of the Federal Act shall be deemed for the purposes of subsection (1) to be $425,000 for the period commencing on July 1, 2004.



(f)                New provisions.



Section 4



(a)               New provision.



(b)               The existing provision reads as follows:



59(8)               Notwithstanding subsections (2) to (7), no corporation may deduct a research and development tax credit for a taxation year of the corporation ending before February 26, 1994.



Section 5



Commencement provision.
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Legend
* Private Bill
** Bill referred to Standing Committee on Law Amendments
+ Private Member's Public Bill
++ Motion for second reading defeated
+++ Debate at second reading adjourned
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