The right to collect customs and excise taxes (indirect taxes) were assigned to the federal government [BNA (now Constitution Act) s. 122] The government was given the right to raise funds “by any mode or system of taxation” [BNA s. 91(3)] 2. Identify the source of the Provincial Power in the Constitution Act The provinces were assigned the right to “direct” taxation and license fees [BNA 92(2)] 3 Identify the definition of direct and indirect taxation that has been accepted and applied in Canadian cases Direct Taxation: demanded from the very person who it is intended or desired should pay it. Income Tax: an example because you cannot pass the tax onto another person Indirect Taxation: demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another. Customs or excise tax: an example because you may be able to pass all or part of the tax onto the consumer Bank of Toronto v Lambe Principle: sets out the definition of direct and indirect taxes Knowledge Objectives: Provincial Income Taxes Indicate when provincial income taxation began BC and PEI introduced income taxes in the early part of the 20th century and five other provinces followed this in between 1923-1939. Other three provinces started levying income taxes in 1962 Knowledge Objectives: Federal Income Tax Indicate when federal income taxation began Federal government first started imposing income tax in 1917 Knowledge Objectives: Federal-Provincial Agreements Be able to describe the federal-provincial tax rental agreements that began during the WWII, the subsequent tax collection agreements and the recent 1998 changes to provincial taxation under these agreements. Tax Rental Agreement 1941: provinces agreed to abandon their income taxes and allow the federal government to collect income tax provinces were compensated by grants from the federal government this was to last for the duration of the war but in 1947 the feds convinced the province (except Ontario and QC) to enter into 5-year tax-rental agreements Tax Collection Agreements 1962 tax rental agreements replaced by tax collection agreements provinces impose own income taxes at their own rates however federal government would collect the taxes with the provincial rate being expressed as a percentage of federal 1997 – new collection agreement allows province to compute provincial tax directly on taxable income rather than as a percentage of federal tax
The right to collect customs and excise taxes (indirect taxes) were assigned to the federal government [BNA (now Constitution Act) s. 122] The government was given the right to raise funds “by any mode or system of taxation” [BNA s. 91(3)] 2. Identify the source of the Provincial Power in the Constitution Act The provinces were assigned the right to “direct” taxation and license fees [BNA 92(2)] 3 Identify the definition of direct and indirect taxation that has been accepted and applied in Canadian cases Direct Taxation: demanded from the very person who it is intended or desired should pay it. Income Tax: an example because you cannot pass the tax onto another person Indirect Taxation: demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another. Customs or excise tax: an example because you may be able to pass all or part of the tax onto the consumer Bank of Toronto v Lambe Principle: sets out the definition of direct and indirect taxes Knowledge Objectives: Provincial Income Taxes Indicate when provincial income taxation began BC and PEI introduced income taxes in the early part of the 20th century and five other provinces followed this in between 1923-1939. Other three provinces started levying income taxes in 1962 Knowledge Objectives: Federal Income Tax Indicate when federal income taxation began Federal government first started imposing income tax in 1917 Knowledge Objectives: Federal-Provincial Agreements Be able to describe the federal-provincial tax rental agreements that began during the WWII, the subsequent tax collection agreements and the recent 1998 changes to provincial taxation under these agreements. Tax Rental Agreement 1941: provinces agreed to abandon their income taxes and allow the federal government to collect income tax provinces were compensated by grants from the federal government this was to last for the duration of the war but in 1947 the feds convinced the province (except Ontario and QC) to enter into 5-year tax-rental agreements Tax Collection Agreements 1962 tax rental agreements replaced by tax collection agreements provinces impose own income taxes at their own rates however federal government would collect the taxes with the provincial rate being expressed as a percentage of federal 1997 – new collection agreement allows province to compute provincial tax directly on taxable income rather than as a percentage of federal tax
298-MASE-LAW345-FINAL_2.docx