Bill 64, Technology for Classrooms Tax Credit Statute Law Amendment Act, 2001

Versions

Bill 64 2001

An Act to amend
the Corporations Tax Act,
the Education Act
and the Income Tax Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

PART I
AMENDMENT TO THE
CORPORATIONS TAX ACT

1. The Corporations Tax Act is amended by adding the following section:

Technology for classrooms
tax credit

41.2 (1) A corporation that donates eligible computer property to a school board in a taxation year commencing after this section comes into force may deduct an amount determined under subsection (2) from its tax otherwise payable under this Part for the taxation year, before making any deductions under sections 39, 40, 41, 43 and 43.3 to 43.12 for the taxation year, if the following conditions are satisfied:

1. No consideration is paid or payable, directly or indirectly, for the donated property.

2. The corporation acquired the property as new no earlier than 36 months before the commencement of the taxation year.

3. The corporation used the property for the purposes of earning income from a business or property.

4. The school board accepts the donation of the property.

Amount of tax credit

(2) The amount of a corporation's tax credit under this section for a taxation year is the lesser of the corporation's notional undepreciated capital cost immediately before the donation of the eligible computer property and the amount determined using the formula:

A × B/C × D

in which,

"A" is the amount of tax payable under this Part for the taxation year before the deduction of any amounts to which the corporation is entitled under sections 39, 40, 41, 43 and 43.3 to 43.12;

"B" is the amount of the corporation's income from business or property for the taxation year;

"C" is the amount of the corporation's income for the taxation year; and

"D" is the fraction that would be the corporation's Ontario allocation factor for the taxation year, within the meaning of section 12.

Notional undepreciated capital cost

(3) The corporation's notional undepreciated capital cost of the eligible computer property is the amount determined under the following rules:

1. If the property is the only depreciable property included by the corporation in a class prescribed by the regulations made under the Income Tax Act (Canada), the notional undepreciated capital cost of the property is the undepreciated capital cost to the corporation of depreciable property of that class, as determined for the purposes of this Act, immediately before the donation.

2. If the property is not the only depreciable property included by the corporation in a class prescribed by those regulations, the notional undepreciated capital cost of the property is the amount determined under the prescribed rules.

Supporting documentation

(4) A corporation that claims a deduction under this section shall deliver, with the annual return required under section 75 for the taxation year in which the donation is made,

(a) such material as the Provincial Minister may direct to prove the date of acquisition by the corporation of the donated property and that the property is eligible computer property; and

(b) the certificate in respect of the property, issued by the school board under paragraph 17.2 of subsection 170 (1) of the Education Act.

Definitions

(5) In this section,

"eligible computer property" means, in respect of a corporation, computer software or hardware,

(a) that is depreciable property of a class prescribed by the regulations made under the Income Tax Act (Canada),

(b) that has not been used, or acquired for use or lease, for any purpose before it was acquired by the corporation, and

"school board" means a board within the meaning of the Education Act; ("conseil scolaire")

"undepreciated capital cost" has the meaning given by subsection 248 (1) of the Income Tax Act (Canada). ("fraction non amortie du coût en capital")

Regulations

(6) The Lieutenant Governor in Council may make regulations prescribing rules for determining the amount of a tax credit, if any, that may be claimed under this section by a corporation in respect of eligible computer property donated to a school board by a partnership of which the corporation is a member.

PART II
AMENDMENT TO THE
EDUCATION ACT

2. Subsection 170 (1) of the Education Act, as amended by the Statutes of Ontario, 1993, chapter 11, section 30, 1996, chapter 11, section 29, 1996, chapter 12, section 64, 1996, chapter 13, section 5, 1997, chapter 31, section 80 and 2000, chapter 11, section 3, is further amended by adding the following paragraphs:

17.2 upon accepting a donation mentioned in section 41.2 of the Corporations Tax Act or subsection 8 (8.6) of the Income Tax Act, issue a certificate to the donor in a form approved by the Minister of Finance, stating that the board accepts the donation and the date on acceptance and containing any other information the Minister of Finance may specify;

17.3 to the extent reasonably possible, use the computer hardware or software that it receives as a donation mentioned in paragraph 17.2 in the classroom for the purposes of the instruction of pupils in,

i. the schools under its charge that the donor specifies, if the donor specifies any schools in connection with the donation, or

ii. schools under its charge, if the donor does not specify any schools in the donation;

PART III
AMENDMENT TO THE
INCOME TAX ACT

3. Section 8 of the Income Tax Act, as amended by the Statutes of Ontario, 1992, chapter 18, section 55, 1992, chapter 25, section 3, 1993, chapter 29, section 6, 1994, chapter 17, section 99, 1996, chapter 1, Schedule C, section 8, 1996, chapter 24, section 13, 1996, chapter 29, section 9, 1997, chapter 19, section 9, 1997, chapter 43, Schedule B, section 4, 1998, chapter 5, section 3, 1998, chapter 9, section 81, 1998, chapter 34, section 69, 1999, chapter 9, section 120 and 2000, chapter 42, section 55, is further amended by adding the following subsections:

Technology for classrooms
tax credit

(8.6) A taxpayer who donates eligible computer property to a school board in a taxation year commencing after this section comes into force may deduct an amount determined under subsection (8.7) from the amount of tax otherwise payable under this Part for the taxation year before the deduction of any amounts to which the taxpayer is entitled under subsection (3), (3.1), (4), (9), (15), (15.1), (15.2), (15.3) or (15.4), if the following conditions are satisfied:

1. No consideration is paid or payable, directly or indirectly, for the donated property.

2. The taxpayer acquired the property as new no earlier than 36 months before the commencement of the taxation year.

3. The taxpayer used the property for the purposes of earning income from a business or property.

4. The school board accepts the donation of the property.

Amount of tax credit

(8.7) The amount of a taxpayer's tax credit under subsection (8.6) is the lesser of the notional undepreciated capital cost of the eligible computer property immediately before the donation and the amount determined using the formula:

A × B/C

in which,

"A" is the amount of tax payable under this Part for the taxation year before the deduction of any amounts to which the taxpayer is entitled under subsection (3), (3.1), (4), (9), (15), (15.1), (15.2), (15.3) or (15.4);

"B" is the product determined by multiplying the amount of the taxpayer's income from business or property for the taxation year as determined under the Federal Act by the taxpayer's Ontario allocation factor for the taxation year, within the meaning of section 4; and

"C" is the amount of the taxpayer's income earned in the taxation year in Ontario, within the meaning of section 4.

Notional undepreciated capital cost

(8.8) The taxpayer's notional undepreciated capital cost of the eligible computer property is the amount determined under the following rules:

1. If the property is the only depreciable property included by the taxpayer in a class prescribed by the Federal Regulations, the notional undepreciated capital cost of the property is the undepreciated capital cost to the taxpayer of depreciable property of the class immediately before the donation.

2. If the property is not the only depreciable property included by the taxpayer in a class prescribed by the Federal Regulations, the notional undepreciated capital cost of the property is the amount determined under the prescribed rules.

Supporting documentation

(8.9) A taxpayer who claims a deduction under subsection (8.6) shall file, with the annual return for the taxation year in which the taxpayer claims the deduction,

(a) such material as the Provincial Minister may direct to prove the date of acquisition by the taxpayer of the donated property and that the property is eligible computer property; and

(b) the certificate in respect of the property, issued by the school board under paragraph 17.2 of subsection 170 (1) of the Education Act.

Regulations

(8.10 ) The Lieutenant Governor in Council may make regulations prescribing rules for determining the amount of a tax credit, if any, that may be claimed under subsection (8.6) by a taxpayer in respect of eligible computer property donated to a school board by a partnership of which the taxpayer is a member.

Definitions

(8.11) For the purposes of subsections (8.6) to (8.10),

"eligible computer property" means, in respect of a taxpayer, computer software or hardware,

(a) that is depreciable property of a class prescribed by the Federal Regulations,

(b) that has not been used, or acquired for use or lease, for any purpose before it was acquired by the taxpayer, and

"school board" means a board within the meaning of the Education Act; ("conseil scolaire")

"undepreciated capital cost" has the meaning given by subsection 248 (1) of the Federal Act. ("fraction non amortie du coût en capital")

Commencement

4. This Act comes into force on the day it receives Royal Assent.

Short title

5. The short title of this Act is the Technology for Classrooms Tax Credit Statute Law Amendment Act, 2001.

EXPLANATORY NOTE

The Bill would amend the Corporations Tax Act and the Income Tax Act to establish a tax credit for a taxpayer who donates eligible computer property to a school board if the board accepts the donation. The tax credit would be in the amount of the taxpayer's undepreciated capital cost of the computer property immediately before the donation. The eligible computer property must have been acquired new by the taxpayer no earlier than 36 months before the taxation year in which the donation is made. Regulations would be made under the Act to limit the type of computer property eligible for the tax credit and to provide rules for determining the amount that a partner may claim on a donation by the partnership.

The Bill would also amend the Education Act to provide that a school board that accepts the donation of eligible computer property is required, to the extent reasonably possible, to use the property in the classroom for the purposes of instruction of pupils in the board's schools and, specifically, in any schools of the board that the donor may specify in connection with the donation.