BILL NO. 21

(as introduced)

4th Session, 61st General Assembly
Nova Scotia
61 Elizabeth II, 2012

Private Member's Bill

Sound Recording Tax Credit Act

Harold (Junior) Theriault
Digby-Annapolis

First Reading: April 13, 2012

(Explanatory Note)

Second Reading:

Third Reading:

This Bill provides a Nova Scotia sound recording tax credit available to eligible sound recording companies for certain qualifying expenditures on eligible sound recordings by emerging Canadian artists or groups.

2 Chapter 217 of the Revised Statutes, 1989, the Income Tax Act, is amended by adding immediately after Section 47A the following heading and Section:

47B (1) In this Section,

(a) "eligible Canadian sound recording" means a sound recording that satisfies the rules prescribed by the regulations and is by an emerging Canadian artist or group;

(b) "eligible sound recording company" has the meaning prescribed by the regulations;

(c) "emerging Canadian artist or group" means an artist or group that satisfies the rules prescribed by the regulations;

(d) "qualifying expenditure" means an amount determined in the manner prescribed by the regulations in respect of an expenditure that satisfies the rules prescribed by the regulations.

(2) A corporation that is an eligible sound recording company for a taxation year and complies with the requirements of this Section may deduct from its tax otherwise payable under this Part for a taxation year, an amount not exceeding the amount of its sound recording tax credit for the taxation year.

(3) A corporation referred to in subsection (2) that complies with the requirements of this Section may deduct from its tax otherwise payable for the year under Part III an amount not exceeding the amount by which its sound recording tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (2).

(4) The amount of a corporation's sound recording tax credit for a taxation year is the sum of all amounts, each of which is in respect of an eligible Canadian sound recording in relation to which the corporation is an eligible sound recording company and each of which is equal to the lesser of

(a) twenty per cent of the qualifying expenditures incurred by the corporation after January 1, 2012, and before the end of the taxation year in respect of the eligible Canadian sound recording to the extent that the expenditures were not included in determining the amount of the corporation’s available tax credit under this Section for a prior taxation year; and

(b) an amount calculated in the manner prescribed by the regulations for the purpose of this subsection.

(5) Where, in a particular taxation year of a corporation that is a member of a partnership, an amount would, if the partnership were a corporation, be determined in respect of the partnership under subsection (4) for its taxation year ending in that particular taxation year, the portion of that amount that may reasonably be considered to be the corporation's share thereof is the amount required to be added in computing the sound recording tax credit of the corporation at the end of that particular taxation year.

(6) Notwithstanding subsection (5), a limited partner's share of a sound recording tax credit to which a partnership would be entitled if it were a corporation is deemed to be nil.

(7) In order to be eligible to deduct or claim an amount in respect of an sound recording tax credit under this Section in respect of a sound recording, a corporation shall apply to a person designated by the Minister of Communities, Culture and Heritage for certification that the sound recording is an eligible Canadian sound recording and that the corporation is an eligible sound recording company for the taxation year in relation to the eligible Canadian sound recording for the purpose of this Section.

(8) A corporation that applies for certification under this Section shall provide to the designated person the information the designated person specifies for the purpose of making the determinations required under subsection (7).

(9) Where the particular sound recording is an eligible Canadian sound recording for the purpose of this Section and the corporation is an eligible sound recording company for the taxation year in relation to the recording, the designated person shall issue to the corporation a certificate so certifying.

(10) In order to deduct or claim an amount under this Section for a taxation year, an eligible corporation shall deliver to the Minister with its return for the taxation year the certificate for the taxation year that is issued under subsection (9) or a certified copy thereof.

(11) A certificate issued under subsection (9) may be revoked if

(a) an omission or incorrect statement was made and it is reasonable to believe that, if the omitted information had been disclosed or if the person designated had known that the statement was incorrect, the designated person would have found that the corporation was not an eligible sound recording company for the purpose of this Section or that the recording was not an eligible Canadian sound recording for the purpose of this Section;

(b) the corporation is not an eligible sound recording company for the taxation year in relation to the eligible Canadian sound recording; or

(c) the sound recording is not an eligible Canadian sound recording for the purpose of this Section.

(12) A certificate that is revoked under subsection (11) is deemed never to have been issued.

(13) A corporation that has claimed and is eligible for a sound recording tax credit under this Section for a taxation year is deemed to have paid, at the time referred to in paragraph 157(1)(b) of the Federal Act, as that paragraph relates to that taxation year, the amount of that credit on account of its tax payable under this Act.

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