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The Statute Law Amendment (Taxation) Act, 1991

S.M. 1991-92, c. 31

Bill 54, 2nd Session, 35th Legislature

The Statute Law Amendment (Taxation) Act, 1991

(Assented to July 26,1991)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

THE CORPORATION CAPITAL TAX ACT

C.C.S.M. c. C226 amended

1           The Corporation Capital Tax Act is amended by this Part.

Subsection 12(2) amended

2(1)        Subsection 12(2) is amended by striking out "Subsection" and substituting "In respect of fiscal years ending before January 1, 1992, subsection".

Subsection 12(3) added

2(2)        The following is added after subsection 12(2):

Non-application of subsection (1)

12(3)       In respect of fiscal years ending after December 31, 1991, subsection (1) does not apply to two or more corporations that are associated, as defined in section 256 of the Income Tax Act (Canada), if the aggregate of the amounts taxable of all those associated corporations as at the close of their fiscal years ending in the same numeric year is $1,000,000. or more and, for the purpose of determining the aggregate of the amounts taxable of those associated corporations, any corporation that has no amount taxable at the close of the fiscal year is excluded from the calculation of the aggregate of the amounts taxable.

Subsection 14(2) amended

3(1)        Subsection 14(2) is amended by striking out "Subsection" and substituting "In respect of fiscal years ending before January 1, 1992, subsection".

Subsection 14(3) added

3(2)        The following is added after subsection 14(2):

Non-application of subsection (1)

14(3)       In respect of fiscal years ending after December 31, 1991, subsection (1) does not apply to two or more corporations that are associated, as defined in section 256 of the Income Tax Act (Canada), if the aggregate of the amounts taxable of all those associated corporations as at the close of their fiscal years ending in the same numeric year exceeds $1,003,000. and, for the purpose of determining the aggregate of the amounts taxable of those associated corporations, any corporation that has no amount taxable at the close of the fiscal year is excluded from the calculation of the aggregate of the amounts taxable.

Subsection 17(1) amended

4(1)        Subsection 17(1) is amended by striking out "ending after June 30, 1976" and substituting "commencing on or before July 1, 1991".

Subsections 17(4) and (5) added

4(2)        The following is added after subsection 17(3):

Instalments, after July 1, 1991

17(4)       Each corporation that has a permanent establishment within Manitoba shall, for fiscal years commencing after July 1, 1991,

(a)if the corporation's tax payable for its immediately preceding fiscal year exceeded $1,200., without notice or demand, pay to the minister on account of the tax payable for the current fiscal year instalment payments, on or before the first day of the 4th, 7th, 10th and 13th months following the month in which the corporation's immediately preceding fiscal year ended, each in an amount equal to the lesser of

(i)25% of the total tax payable by the corporation for the corporation's immediately preceding fiscal year, and

(ii)25% of the corporation's estimated tax payable for the current fiscal year;

(b)if the corporation's tax payable for its immediately preceding fiscal year was $1,200. or less, without notice or demand, pay to the minister, at least 15 days before the last day of the fiscal year an instalment of tax payable for that fiscal year equal to the amount of" the tax payable by the corporation for the corporation's immediately preceding fiscal year.

Tax returns

17(5)       For fiscal years commencing after July 1, 1991, each corporation that has a permanent establishment within Manitoba shall, on or before the last day of the sixth month immediately following the end of the fiscal year, file with the minister a return and pay to the minister the tax payable for the fiscal year less the amount of instalments paid under subsection (4).

Subsection 19(3) added

5           The following is added after subsection 19(2):

Estimated tax payable

19(3)       Where a corporation pays instalments in accordance with subclause 17(4)(a)(ii), the director may require the corporation to provide details of the calculation of the corporation's estimated tax payable.

Subsection 22(2) amended

6(1)        Subsection 22(2) is amended by striking out that part after "Crown".

Subsection 22(2.1) added

6(2)        The following is added after subsection 22(2):

Interest payable on deficient instalments

22(2.1)     In calculating the interest payable by a corporation under subsection (2) in relation to instalments payable under clause 17(4)(a), the interest shall be calculated on the whole, or part, as the case may be, of any required instalment that is not paid by the due date and, for that purpose, the amount of the required instalment is the lesser of

(a)25% of the total tax payable by the corporation for the corporation's immediately preceding fiscal year; and

(b)25% of the corporation's actual tax payable for the current fiscal year;

and the interest shall be applied from the date on which the whole or part of the instalment was required to be paid to the date on which it is paid.

Subsection 29(2) amended

7(1)        Subsection 29(2) is amended by adding "for a fiscal year commencing on or before July 1, 1991," after "under this Act " where it occurs for the first time.

Subsection 29(2.1) added

7(2)        The following is added after subsection 29(2):

Failure to pay balance of tax

29(2.1)     Every corporation which fails to pay any balance of tax payable under this Act for a fiscal year commencing after July 1, 1991, in the amount and at the time required under this Act, is liable, whether or not it is prosecuted or convicted under any provision of this Act, to a penalty of 5% of the amount of the balance of tax that is unpaid at the time required or $20, whichever is greater, and any penalty under this subsection is deemed to be tax payable under this Act and in addition to any other tax payable under this Act and may be collected as tax payable under this Act.

PART 2

THE GASOLINE TAX ACT

C.C.S.M. c. G40 amended

8           The Gasoline Tax Act is amended by this Part.

Clause 2(23)(a) amended

9(1)        Clause 2(23)(a) is amended by striking out "9.0¢" and substituting "10.5¢".

Subsection 2(24) amended

9(2)        Subsection 2(24) is amended

(a)by striking out "on, from and after April 1, 1985,"; and

(b)by striking out "5.5¢" and substituting "7.0¢".

PART 3

THE HEALTH AND POST SECONDARY EDUCATION TAX LEVY ACT

C.C.S.M. c. H24 amended

10          The Health and Post Secondary Education Tax Levy Act is amended by this Part.

Subsection 2(3) added

11          The following is added after subsection 2(2):

Associated corporations

2(3)        After 1991, in the case of corporations that are "associated" as defined in section 256 of the Income Tax Act (Canada), the tax payable under this Act and the exemption authorized under subsection 3(3.6) and reduction authorized under subsection 3(3.7) shall be calculated as though associated corporations were a single employer and the amount of the tax payable and exemption or reduction authorized shall be shared among them.

Subsection 3.3(2) amended

12          Subsection 3.3(2) is amended by striking out "in respect of which tax is paid under subsection 3(3.1)" and substituting "paid by an employer in the year in respect of which the tax is paid".

Subsection 5(2.4) added

13          The following is added after subsection 5(2.3):

Annual return, associated corporations

5(2.4)      Notwithstanding subsection (1), after 1991, two or more corporations that are associated, as defined in section 256 of the Income Tax Act (Canada), shall, without notice or demand, file with the minister in respect of each calendar year, on or before the end of the second month of the next ensuing year, in addition to any monthly returns that may be due, an annual return, on a consolidated basis, of the aggregate of the total remuneration paid by them and respective total tax payable by each of them in accordance with subsection 3(3.1) for that calendar year and shall, at that time, pay any tax owing.

Subsection 9(2) amended

14          Subsection 9(2) is amended by striking out that part after "Crown".

PART 4

THE INCOME TAX ACT

C.C.S.M. c. I10 amended

15          The Income Tax Act is amended by this Part.

Subsections 5(4.1) and (4.2) added

16          The following is added after subsection 5(4):

Social assistance recipients ineligible

5(4.1)      An individual who receives social assistance payments as defined in clause 56(1)(u) of the Income Tax Act (Canada) for a taxation year or a qualified relation, as defined in subsection 122.5(1) of the Income Tax Act (Canada), of such an individual is not entitled to a deduction under this section from his or her tax payable with respect to that taxation year, except

Regulations

5(4.2)      The Lieutenant Governor in Council may make regulations for the purposes of subsection (4.1).

Subsection 7.1(1) amended, "corporation"

17(1)       Clause (a) of the definition of "corporation" in subsection 7.1(1) is amended by striking out "1992" and substituting "1993".

Subsection 7.1(1) amended, "non-qualifying business"

17(2)       The definition of "non-qualifying business" in subsection 7.1(1) is amended

(a)in clause (a), by adding "or any other professional practice that may be prescribed in the regulations" after "chiropractor"; and

(b)by striking out "to one or more businesses connected at any time in the taxation year with the corporation" in clause (c) and substituting "except such a business that is within any class of businesses that may be prescribed in the regulations".

Subsections 7.1(7.1) and (7.2) added

17(3)       The following is added after subsection 7.1(7):

Certain corporations ineligible

7.1(7.1)    A corporation that acquires the assets of an existing business is not eligible for a deduction under this section unless, at the end of its first taxation year, the value of its assets has increased, as a result of investment of new capital, by at least 40% over the value of the assets acquired from that existing business.

Exception

7.1(7.2)    Subsection (7.1) does not apply where the existing business acquired by the corporation was bankrupt or had been out of operation for at least 6 months before the date of the acquisition.

Clause 7.1(12)(c) added

17(4)       The following clause is added after clause 7.1(12)(b):

(c)respecting any matter authorized by this section to be prescribed in the regulations.

PART 5

THE MOTIVE FUEL TAX ACT

C.C.S.M. c. M220 amended

18          The Motive Fuel Tax Act is amended by this Part.

Clause 2(28)(a) amended

19          Clause 2(28)(a) is amended by striking out "9.9¢" and substituting "10.9¢".

PART 6

THE RETAIL SALES TAX ACT

C.C.S.M. c. R130 amended

20          The Retail Sales Tax Act is amended by this Part.

Subsection 1(1) amended

21(1)       Subsection 1(1) is amended by adding the following definitions in alphabetical order within the subsection:

"assessment" includes a re-assessment; («cotisation»)

"director" means the Deputy Minister of Finance or any Assistant Deputy Minister of Finance; («directeur»)

"estimate" includes a revised estimate; («estimation»)

Subsection 1(1) amended

21(2)       Subsection 1(1) is amended by striking out "minister" and substituting "director" in clause (c) of the definition of "fair value".

Subsections 2(16) and 2(17) added

22          The following is added after subsection 2(15):

Excess collection of tax an offence

2(16)       A person who collects as tax an amount knowing that the amount is not payable as tax, or who collects as tax an amount knowing that the amount is in excess of the amount payable as tax, is guilty of an offence.

Excess amounts collected must be remitted

2(17)       Notwithstanding any other provision of this Act, where a person collects as tax an amount that is not payable as tax, or that is in excess of the amount payable as tax,

(a)the person is deemed to be a vendor under this Act;

(b)the amount so collected is deemed to be tax under this Act and is a debt due to her Majesty in right of Manitoba and is recoverable as such in a court of competent jurisdiction; and

(c)the person shall remit the tax so collected and make returns to the minister as prescribed in the regulations governing vendors.

Subsection 10(9) added

23          The following is added after subsection 10(8):

Assignment of book debts

10(9)       Where a vendor makes an assignment of his or her book debts, whether by way of specific or general assignment, or in any manner disposes of his or her present or future right to collect his or her book debts, the assignment or disposal does not include the portion of the book debts that the vendor, as agent for Her Majesty in right of Manitoba, charged the person to whom he or she sold the tangible personal property or service as tax under this Act, and any such assignee or any other person who collects the book debts shall be deemed to be a vendor under this Act and shall collect, hold in trust for Her Majesty in right of Manitoba, remit and account under this Act and the regulations for the unassigned portion.

Section 10.1 added

24          The following is added after section 10:

Separate trust account

10.1        The director may require a vendor to establish, in accordance with the regulations, a separate trust account for the amounts required to be collected as tax under this Act and to deposit the amounts in the trust account.

Subsection 13(5) amended

25(1)       Subsection 13(5) is amended by striking out "minister" where it occurs for the first time and substituting "director".

Subsections 13(6.1) and (6.2) added

25(2)       The following is added after subsection 13(6):

Right to waive penalty or interest

13(6.1)     Notwithstanding this section and subsection 9(6), the director may, subject to subsection (6.2), in any case of late remittance or payment of tax, where the director is satisfied that the delay was caused by exceptional circumstances, waive all or part of the penalty or interest charges and allow all or part of the commission to be paid to a vendor.

Report to minister

13(6.2)     The director shall provide a written report to the minister within 60 days of granting any waiver or permitting any payment under subsection (6.1) setting out the name of the person to whom the waiver was granted or amount paid, the reasons for the director's decision and the amount waived or permitted to be paid, as the case may be.

Subsection 16(1) amended

26(1)       Subsection 16(1) is amended by striking out "minister" wherever it occurs and substituting "director".

Subsection 16(2) amended

26(2)       Subsection 16(2) is amended by striking out "minister" wherever it occurs and substituting "director".

Subsection 16(3) amended

26(3)       Subsection 16(3) is amended by striking out "minister" where it occurs for the first time and substituting "director".

Subsection 16(5) added

26(4)       The following is added after subsection 16(4):

Right to re-assess

16(5)       Where the director has, under this section, made an estimate of the taxable amount or the tax collected or payable, or has made an assessment under subsection 17(3) of the amount of tax collected or payable, the director is not by reason thereof prevented or prohibited from making a revised estimate or a re-assessment in respect of that period, but where a vendor or purchaser has, under section 18 or 19, appealed an estimate or assessment of a particular period, the director shall not make a revised estimate or re-assessment of the taxable amount or the amount of tax collected by the vendor or payable by the purchaser in respect of that period unless the revised estimate or re-assessment is based on information that was not in the return of the applicant or otherwise submitted to the director by the applicant before or at the time the appealed estimate or assessment was made.

Subsection 17(2): repeal and substitution

27(1)       Subsection 17(2) is repealed and the following is substituted:

Books and records to be made available

17(2)       Each holder of a registration certificate or permit who has a place of business in Manitoba and is carrying on business in the province shall keep and maintain within Manitoba and make available within Manitoba for inspection, examination and audit under this Act the books of account, records and documents specified in the regulations, and where the holder of a registration certificate or permit does not keep and maintain in Manitoba all the books of account, records and documents that are required for the purpose of inspection, examination and audit, the holder of the registration certificate or permit is liable for the expenses necessarily incurred by any officer appointed by the minister under this Act for the purpose of inspecting, examining or auditing the books of account, records and documents at the place where they are kept and maintained.

Director may order records to be produced

17(2.1)     The director may, in writing, order a person who is, or is required by this Act to be, a holder of a registration certificate or permit and who is resident and carrying on business in the province to keep and maintain within Manitoba and make available within Manitoba for inspection, examination or audit under this Act the books of account, records and documents specified in the regulations, and the person shall comply with the order.,

Subsection 17(3) amended

27(2)       Subsection 17(3) is amended by striking out "minister" wherever it occurs and substituting "director".

Subsection 20(1) amended

28(1)       Subsection 20(1) is amended by striking out "minister" and substituting "director".

Subsection 20(2) amended

28(2)       Subsection 20(2) is amended by striking out "minister" where it occurs for the first time and substituting "director".

Subsection 24(2): repeal and substitution

29          Subsection 24(2) is repealed and the following is substituted:

Penalty

24(2)       Every person who is guilty of an offence under this Act is liable, on summary conviction,

(a)in the case of a first offence to a fine of not less than $100. and not more than $2,000., or to imprisonment for a term of not more than three months, or to both; and

(b)in the case of a second or subsequent offence to a fine of not less than $250. and not more than $5,000., or to imprisonment for a term of not more than six months, or to both;

and, in addition, shall be ordered by the justice to pay, on or before any date that the justice may order, any tax that the person

(c)owes under this Act;

(d)collected under this Act but failed or refused to remit to the minister; or

(e)should have collected but failed or refused to collect under this Act;

including any arrears, interest and penalties thereon.

Subsection 26(2.1) added

30          The following is added after subsection 26(2):

Refunds reduced by tax payable

26(2.1)     Where a person, as a customer under a contract for the construction of real property or the supply and installation of repairs or improvements to real property, has paid, in error in addition to the contract price, an amount as tax that was not payable as tax in respect of the contract price, the amount that may be refunded to the person is limited, notwithstanding subsection (2), to the difference between

(a)the amount paid in error by that person in respect of the contract price; and

(b)the amount of tax payable but unpaid by the contractor as the purchaser in respect of the tangible personal property supplied under the contract.

Clause 29(e.l) added

31          The following is added after clause 29(e):

(e.l)respecting trust accounts to be opened and maintained by vendors for tax to be collected by them under this Act;

PART 7

THE REVENUE ACT

C.C.S.M. c. R150 amended

32          The Revenue Act is amended by this Part.

Clause 46(1)(a): repeal and substitution

33          Clause 46(1)(a) is repealed and the following is substituted:

(a)with respect to

(i)liquor sold in cans, at the rate of 10¢ for each can, and

(ii)with respect to liquor, other than beer, sold in containers, other than cans, with a content capacity of less than 750 millilitres, at the rate of 5¢ for each container;

PART 8

THE TOBACCO TAX ACT

C.C.S.M. c. T80 amended

34          The Tobacco Tax Act is amended by this Part.

Clause 2(1)(a) amended

35(1)       Clause 2(1)(a) is amended by striking out "" and substituting "".

Clause 2(1)(q) amended

35(2)       Clause 2(1)(q) is amended by striking out "61¢" and substituting "75¢".

Clause 2(1)(r) amended

35(3)       Clause 2(l)(r) is amended by striking out "4.3¢" and substituting "5.3¢".

Subsection 14(16) added

36          The following is added after subsection 14(15):

Assignment of book debts

14(16)      Where a collector makes an assignment of his or her book debts, whether by way of specific or general assignment, or in any manner disposes of his or her present or future right to collect his or her book debts, the assignment or disposal does not include the portion of the book debts that the collector, as agent for Her Majesty in right of Manitoba, charged the person to whom he or she sold the tobacco as tax under this Act, and any such assignee or any other person who collects the book debts shall be deemed to be a collector under this Act and shall collect, hold in trust for Her Majesty in right of Manitoba, remit and account under this Act and the regulations for the unassigned portion.

Section 14.1 added

37          The following is added after section 14:

Separate trust account

14.1        The director may require a collector to establish, in accordance with the regulations, a separate trust account for the amounts required to be collected as tax under this Act and to deposit the amounts in the trust account.

Clause 28(1.1) added

38          The following is added after clause 28(1):

(1.1) respecting trust accounts to be opened and maintained by collectors for tax to be collected by them under this Act;

PART 9

COMING INTO FORCE

Coming into force

39          Subject to sections 40 to 46, this Act comes into force on the day it receives royal assent.

Part 1: The Corporation Capital Tax Act

40          Sections 4 and 5, subsection 6(2) and section 7 of Part 1 come into force on July 1, 1991 and, in the event that this Act receives royal assent after that date, are retroactive and are deemed to have come into force on July 1, 1991.

Part 2: The Gasoline Tax Act

41          Section 9 of Part 2 is retroactive and is deemed to have come into force on May 1, 1991.

Part 3: The Health and Post Secondary Education Tax Levy Act

42           Section 12 of Part 3 is retroactive and is deemed to have come into force on January 1, 1991.

Part 4: The Income Tax Act

43(1)       Section 16 of Part 4 comes into force on January 1, 1992.

Part 4: The Income Tax Act

43(2)       Subsections 17(1) and (3) of Part 4 are retroactive and are deemed to have come into force on April 17, 1991.

Part 5: The Motive Fuel Tax Act

44          Section 19 of Part 5 is retroactive and is deemed to have come into force on May 1, 1991.

Part 7: The Revenue Act

45          Section 33 of Part 7 is retroactive and is deemed to have come into force on May 1, 1991.

Part 8: The Tobacco Tax Act

46          Section 35 of Part 8 is retroactive and is deemed to have come into force on June 1, 1991.