BILL NO. 48

(as introduced)

3rd Session, 61st General Assembly
Nova Scotia
60 Elizabeth II, 2011

Private Member's Bill

Income Tax Act
(amended)

Allan MacMaster
Inverness

First Reading: April 29, 2011

(Explanatory Notes)

Second Reading:

Third Reading:

Clause 1 provides that if a donation is claimed for the year, no charitable donation tax credit may be claimed in respect of the donated agricultural products.

Clause 2 provides a non-refundable tax credit to eligible farmers in Nova Scotia who donate certain agricultural products they produced to Nova Scotia food banks.

Clause 3 provides that this Act comes into force on proclamation.

1 Section 11 of Chapter 217 of the Revised Statutes, 1989, the Income Tax Act, as enacted by Chapter 4 of the Acts of 2000 and amended by Chapter 2 of the Acts of 2008, is further amended by

(a) adding "(1)" immediately after the Section number;

(b) striking out "For" in the first line and substituting "Subject to subsection (2), for"; and

(c) adding immediately after subsection (1) as numbered by clause (a) the following subsection:

(2) Where an individual claims a food bank donation tax credit under Section 49A for a taxation year, the following rules apply:

(a) the amount of B in subsection (1) for the year is deemed to be the lesser of

(i) $200 minus the sum of the value of the individual's eligible donations, to the extent that those eligible donations were included in determining an amount that was deducted under subsection 49A(2) in computing the eligible farmer's tax payable for the year, and

(ii) the amount determined for D pursuant to clause (b);

(b) the amount of D in subsection (1) for the year is deemed to be the amount of the individual's total gifts used to determine the deduction amount under Section 118.1 of the Federal Act by the individual for the year minus the sum of the value of the individual's eligible donations to the extent that those eligible donations were included in determining an amount that was deducted under subsection 49A(2) in computing the eligible farmer's tax payable for the year.

2 Chapter 217 is further amended by adding immediately after Section 49 the following heading and Section:

Food Bank Donation Tax Credit for Farmers

49A (1) In this Section,

(a) "agricultural product" has the meaning prescribed by the regulations made under this Section;

(b) "eligible donation" means the wholesale value of an agricultural product produced in the Province by an eligible farmer and donated by the eligible farmer in the year or in any of the five immediately preceeding taxation years to an eligible food bank in the Province, to the extent that those amounts were not included in determining an amount that was deducted under this Section in computing the eligible farmer's tax payable for a preceeding taxation year;

(c) "eligible farmer" means

(i) an individual who, alone or with persons related to the individual, carries on the business of farming in the Province, or

(ii) a corporation that carries on the business of farming in the Province;

(d) "eligible food bank" means a person or entity that
(i) is registered as a charity under the Federal Act,

(ii) is engaged in the distribution of food to the public without charge in the Province, and

(iii) satisfies such other conditions as may be prescribed by the regulations made under this Section.

(2) An eligible farmer may deduct from the amount of tax otherwise payable under this Act, for a taxation year ending after this Section comes into force, an amount not exceeding the lesser of

(a) the amount of tax payable by the eligible farmer under this Act for the year before making a deduction under this Section; and

(b) the eligible farmer's food bank donation amount for the year as determined under subsection (3).

(3) An eligible farmer's food bank donation amount for a taxation year shall be determined by the formula

(A x B) + [C x (D - B)]

where

A is 17.58%;

B is the lesser of $200 and the sum of the eligible farmer's eligible donations;

C is 42%; and

D is the sum of the eligible farmer's eligible donations.

(4) Where, in a particular taxation year of an eligible farmer who is a member of a partnership, but is not a limited partner, an amount would, if the partnership were a eligible farmer, be determined in respect of the partnership under subsection (3) for its taxation year ending in that particular taxation year, the portion of that amount that may reasonably be considered to be the eligible farmer's share thereof is the amount required to be added in computing the food bank donation amount of the eligible farmer at the end of that particular taxation year.

(5) The Minister of Finance may make regulations for the purpose of this Section

(a) prescribing agricultural products;

(b) prescribing rules for determining the wholesale value of agricultural products;

(c) prescribing conditions that must be satisfied for a person or entity to be an eligible food bank.

(6) The exercise by the Minister of Finance of the authority contained in subsection (5) is a regulation within the meaning of the Regulations Act.

(7) This Section does not apply unless the Minister has agreed to make such amendments to the collection agreement referred to in subsection 101(1) as are necessary to authorize the administration of the tax credit under this Section by the Canada Revenue Agency on behalf of the Minister of Finance.

(8) The moneys required for the purpose of this Section must be paid out of moneys appropriated for that purpose by the Legislature and, for greater certainty, no deduction may be made pursuant to this Section until the moneys are appropriated by the Legislature.

3 This Act comes into force on such day as the Governor in Council orders and declares by proclamation.