BILL 8 – 2005
TAXATION STATUTES AMENDMENT ACT, 2005

 
Assessment Act

1 Section 66 of the Assessment Act, R.S.B.C. 1996, c. 20, is amended

(a) by adding the following subsection:

(1.1) On request of the government, the commissioner must provide assessment inventory and valuation information to the government for purposes of determining a school tax refund under section 131.1 of the School Act. , and

(b) in subsection (2) by striking out "subsection (1)" and substituting "subsection (1) or (1.1)".

 
Assessment Authority Act

2 Section 19 of the Assessment Authority Act, R.S.B.C. 1996, c. 21, is amended by striking out "Sections 130 to 134 of the School Act" and substituting "Sections 130, 131 and 132 to 134 of the School Act".

 
British Columbia Transit Act

3 Section 19 (6) of the British Columbia Transit Act, R.S.B.C. 1996, c. 38, is amended by striking out "Sections 130 to 132 of the School Act" and substituting "Sections 130, 131 and 132 of the School Act".

 
Corporation Capital Tax Act

4 Section 11 of the Corporation Capital Tax Act, R.S.B.C. 1996, c. 73, is amended

(a) by repealing subsections (2) and (2.1) and substituting the following:

(2) A financial corporation, other than an authorized foreign bank, may deduct an investment allowance under subsection (2.01) if

(a) the financial corporation owns shares of another financial corporation that has a permanent establishment in British Columbia, other than a financial corporation referred to in section 4 (3), and

(b) the taxation year of the financial corporation and the other financial corporation end on the same date.

(2.01) A financial corporation may deduct from its total paid up capital an investment allowance equal to the proportion of the total paid up capital that the carrying value of those shares in the other financial corporation bears to the total assets of the financial corporation.

(2.1) An authorized foreign bank may deduct an investment allowance under subsection (2.2) if

(a) in the course of carrying on its Canadian banking business, the authorized foreign bank owns shares of another financial corporation that has a permanent establishment in British Columbia, other than a financial corporation referred to in section 4 (3), and

(b) the taxation year of the authorized foreign bank and the other financial corporation end on the same date.

(2.2) An authorized foreign bank may deduct from its total paid up capital an investment allowance equal to the proportion of the total paid up capital that the carrying value of those shares in the other financial corporation bears to the total assets of the authorized foreign bank. ,

(b) in subsection (3) by striking out "under subsection (2) or (2.1)" and substituting "under this section", and

(c) in subsection (4) by striking out "subsection (2.1)" and substituting "subsection (2.2)".

5 Section 25 is amended by adding the following subsection:

(3) A financial corporation must retain the records required to be kept by or under this section in respect of a taxation year until the latest of the following:

(a) seven years after the date of delivery of the return for the taxation year;

(b) subject to paragraph (c), if the financial corporation has filed a waiver under section 29 in respect of the taxation year, the date on which the waiver ceases to have effect;

(c) if the financial corporation has revoked a waiver filed under section 29 in respect of the taxation year, 90 days after the date on which the waiver ceases to have effect;

(d) if an appeal has been made under this Act in respect of the taxation year, until all appeals have been exhausted.

6 Section 46 is amended by adding the following subsection:

(5) For every default in complying with section 25 (3), the person in default is liable, in respect of each default, to a penalty equal to the product obtained by multiplying $25 and the number of days, not exceeding 100, during which the default continues.

7 Section 47 (4) is amended by striking out "section 25," and substituting "section 25 (1) or (2),".

 
Freedom of Information and Protection of Privacy Act

8 Schedule 2 of the Freedom of Information and Protection of Privacy Act, R.S.B.C. 1996, c. 165, is amended

(a) by striking out the following:

(b) by adding the following:

 
Greater Vancouver Transportation Authority Act

9 Section 27 (5) of the Greater Vancouver Transportation Authority Act, S.B.C. 1998, c. 30, is amended by striking out "Sections 130 to 132 of the School Act" and substituting "Sections 130, 131 and 132 of the School Act".

 
Health Authorities Act

10 The Health Authorities Act, R.S.B.C. 1996, c. 180, is amended by adding the following section:

Other property tax exemptions

15.01 (1) In this section:

"board of management" and "hospital" have the same meaning as in the Hospital Act;

"hospital facilities" includes laboratories, laundries and other premises used in conjunction with a hospital;

"third party" means a person other than a board.

(2) Subject to any regulations made under section 21 (2) (r), real property wholly owned by a board is exempt from taxation under the Community Charter, the Local Government Act, the School Act, the Taxation (Rural Area) Act and the Vancouver Charter if

(a) the minister designates the real property by order as being held or occupied, for a period of time specified in the order, for future hospital requirements,

(b) the real property is

(i) part of

(A) a hospital, or

(B) a hospital facility designated by regulation for purposes of this paragraph, and

(ii) occupied and used by a not for profit corporation or organization for a purpose in relation to which an exemption from real property taxation under an Act would apply to that real property if it were owned by that corporation or organization,

(c) the real property is

(i) part of

(A) a hospital, or

(B) a hospital facility designated by regulation for purposes of this paragraph, and

(ii) occupied by a third party who is, on behalf of a board, providing services exclusively for the board,

(d) the real property is

(i) part of

(A) a hospital, or

(B) a hospital facility designated by regulation for purposes of this paragraph, and

(ii) occupied by a third party who is providing prescribed services for the hospital or hospital facility, or

(e) the real property is

(i) part of

(A) a hospital, or

(B) a hospital facility designated by regulation for purposes of this paragraph,

(ii) occupied by a medical practitioner who is

(A) a professor or member of the teaching staff of the medical faculty of the University of British Columbia, and

(B) designated by the board of management of the hospital as "designated staff" for purposes of section 45 of the Hospital Act, and

(iii) being used by the medical practitioner for purposes of that medical practitioner's professorial or teaching position described in subparagraph (ii) (A).

(3) The exception in section 15 (2) applies in respect of real property described in subsection (2) of this section.

11 Section 21 (2) is amended by adding the following paragraphs:

(p) the designation of hospital facilities for purposes of section 15.01 (2) (b), (c), (d) or (e);

(q) to prescribe services for purposes of section 15.01 (2) (d);

(r) to limit exemptions from property taxation under section 15.01 (2) or to impose conditions on any of those exemptions.

 
Home Owner Grant Act

12 Section 2 (3) of the Home Owner Grant Act, R.S.B.C. 1996, c. 194, is amended by striking out "$585 000" in both places and substituting "$685 000" and by striking out "$10" and substituting "$5".

13 Section 3 (4) is amended by striking out "$585 000" in both places and substituting "$685 000" and by striking out "$10" and substituting "$5".

14 Section 4 (4) is amended by striking out "$585 000" in both places and substituting "$685 000" and by striking out "$10" and substituting "$5".

15 Section 5 (4) is amended by striking out "$585 000" in both places and substituting "$685 000" and by striking out "$10" and substituting "$5".

 
Hospital District Act

16 Section 28 of the Hospital District Act, R.S.B.C. 1996, c. 202, is amended by striking out "Sections 130 to 132 of the School Act" and substituting "Sections 130, 131 and 132 of the School Act".

 
Insurance Premium Tax Act

17 Section 1 of the Insurance Premium Tax Act, R.S.B.C. 1996, c. 232, is amended

(a) in subsection (1) by adding the following definitions:

"insurance agent" has the same meaning as in Division 2 of Part 6 of the Financial Institutions Act;

"insurance salesperson" has the same meaning as in Division 2 of Part 6 of the Financial Institutions Act;

"permanent establishment" has the same meaning as in section 400 (2) of the Income Tax Regulations (Canada) except that, in respect of a partnership,

(a) a reference in that section to "corporation" must be read as a reference to "partnership", and

(b) the section must be read without reference to paragraphs (c) and (g); , and

(b) by adding the following subsection:

(3) For the purposes of the definition of "taxpayer", a corporation or partnership is resident in British Columbia if the corporation or partnership has a permanent establishment in British Columbia when the premium is payable under the insurance contract.

18 Section 1 (1) is amended in paragraph (d) of the definition of "taxable premium" by striking out "hospitalization" in both places and substituting "health care".

19 The following section is added:

Exemption -- section 4

5.1 Despite section 4, no tax is payable by a taxpayer who is a licensee under the Real Estate Act in respect of the BC premium paid or payable under an insurance contract with the Real Estate Errors and Omissions Insurance Corporation that provides indemnity against liability referred to in section 26 (2) of that Act.

20 Section 5.1 is repealed and the following substituted:

Exemptions -- section 4

5.1 Despite section 4, no tax is payable in respect of the following by a taxpayer who is a licensee under the Real Estate Act:

(a) the BC premium paid or payable under an insurance contract with the Real Estate Errors and Omissions Insurance Corporation that provides indemnity against liability referred to in section 26 (2) of that Act;

(b) an assessment levied for the Real Estate Special Compensation Fund by the Real Estate Compensation Fund Corporation.

21 Section 5.1 is amended

(a) by striking out "Real Estate Act" and substituting "Real Estate Services Act", and

(b) in paragraph (a) by striking out "section 26 (2)" and substituting "section 102 (1)".

22 Section 6 (4) is amended by striking out "person" in both places and substituting "taxpayer".

23 Section 12 is amended

(a) in subsection (1) by adding "and an insurance agent" after "taxpayer",

(b) in subsection (2) by adding "or an insurance agent" after "a taxpayer" and by striking out "that taxpayer." and substituting "that taxpayer or insurance agent.", and

(c) by repealing subsection (3).

24 The following sections are added:

Administration and enforcement

12.1 (1) In this section:

"authorized person" means the commissioner or a person authorized by the commissioner;

"private dwelling" means

(a) a structure that is occupied as a private residence, or

(b) if only part of a structure is occupied as a private residence, that part of the structure.

(2) For any purpose related to the administration or enforcement of this Act and the regulations, an authorized person may

(a) enter any business premises during normal business hours,

(b) inspect, audit or examine any record on the premises, and

(c) remove any record from the premises for the purpose of making copies.

(3) If any business premises referred to in subsection (2) (a) is a private dwelling, an authorized person may not enter the dwelling except with the consent of the occupant or under the authority of a warrant under subsection (4).

(4) If satisfied by evidence given under oath that entry into a private dwelling is necessary for any purpose related to the administration or enforcement of this Act, a justice may issue a warrant, subject to any conditions the justice considers appropriate, authorizing an authorized person to enter the dwelling.

(5) The commissioner may make an application for a warrant under subsection (4) without notice to any other person.

Requirement to provide documents or information

12.2 (1) For any purpose related to the administration or enforcement of this Act and the regulations, but subject to subsection (2), the commissioner may by notice require a person to provide, within the time period specified in the notice,

(a) any information or additional information, or

(b) any record.

(2) The commissioner must not impose on a person a requirement under subsection (1) to provide any information or record relating to an unnamed taxpayer unless

(a) the commissioner first obtains the authorization of a judge under subsection (3), or

(b) the commissioner is imposing the requirement on an insurance agent or insurance salesperson in respect of an insurance contract effected on behalf of an unnamed taxpayer by the insurance agent or insurance salesperson.

(3) A judge of the Supreme Court may, subject to any conditions the judge considers appropriate, make an order authorizing the commissioner to impose on a person a requirement under subsection (1) relating to an unnamed taxpayer, if satisfied by evidence given under oath that

(a) the identity of the taxpayer is ascertainable, and

(b) the requirement is made to verify compliance by the taxpayer with any obligation under this Act.

(4) The commissioner may make an application for an authorization under subsection (3) without notice to any other person.

(5) If authorization is granted under subsection (3), a copy of the court order must be served together with the notice referred to in subsection (1).

(6) If a person is served with a court order granting an authorization under subsection (3), the person may, within 15 days after the service of the order, apply to the Supreme Court for a review of the order.

(7) On hearing an application under subsection (6), a judge may

(a) cancel the authorization previously granted, if the judge is not satisfied that the conditions in subsection (3) (a) and (b) have been met, or

(b) confirm or vary the authorization, if the judge is satisfied that those conditions have been met.

(8) Nothing in subsection (1) affects solicitor-client privilege.

25 Section 30 is repealed and the following substituted:

Noncompliance with sections 12 and 12.2

30 For every default in complying with section 12 or a notice under section 12.2, the person in default is liable, in respect of each default, to a penalty equal to the product obtained by multiplying $25 and the number of days, not exceeding 100, during which the default continues.

 
International Financial Activity Act

26 Section 1 of the International Financial Activity Act, S.B.C. 2004, c. 49, is amended in the definition of "Society" by striking out "IFC International Financial Centre Society of Vancouver" and substituting "International Financial Centre British Columbia Society".

27 Section 38 (1) is amended

(a) in paragraph (a) by striking out "section 12 or 15" and substituting "Part 2", and

(b) by adding the following paragraph:

(f) the effective date of registration under Part 2.

 
Motor Fuel Tax Act

28 Section 15 (1) of the Motor Fuel Tax Act, R.S.B.C. 1996, c. 317, is amended

(a) by striking out "a person must not use coloured fuel" and substituting "a person must not purchase or use coloured fuel",

(b) by adding the following paragraph:

(i.1) a motor vehicle that

(i) is not licensed to operate on a highway,

(ii) is operated on land that is classified as a farm under the Assessment Act, and

(iii) is operated by or on behalf of a farmer for the purposes of the farmer's farm; , and

(c) by repealing paragraph (k) and substituting the following:

(k) a tractor, a motor vehicle referred to in paragraph (i.1), an industrial machine or a road building machine, when proceeding to or returning from a location where the use of coloured fuel in the vehicle is otherwise authorized under paragraph (b), (c), (g) or (i.1); .

29 Section 15.1 (1) is amended by striking out "a person may use coloured fuel for a purpose not authorized by section 15, but only to operate" and substituting "a person may purchase or use coloured fuel for a purpose not authorized by section 15, but only for the purpose of operating".

30 The following section is added:

Penalty for unauthorized purchase or use of coloured fuel

45.3 (1) If the director is satisfied that a person purchased or used coloured fuel other than as authorized by section 15 or 15.1, the director may impose on the person a penalty equal to 3 times the tax that would have been payable on the fuel if it had not been coloured fuel.

(2) A penalty under subsection (1) is in addition to any tax that is payable under section 5 or 15 (3) in respect of the coloured fuel.

31 Section 46 (1) is amended by striking out "a penalty under section 44 or 45," and substituting "a penalty under section 44, 45 or 45.3,".

32 Section 50 (1) (d) is repealed and the following substituted:

(d) an estimate, assessment or imposition under section 42, 43, 44, 45, 45.3, 46.1 or 48; .

 
Property Transfer Tax Act

33 Section 4 (1) of the Property Transfer Tax Act, R.S.B.C. 1996, c. 378, is amended in the definition of "qualifying value" by striking out "$275 000" and substituting "$325 000" and by striking out "$225 000" and substituting "$265 000".

34 Section 8 (1) (c) is repealed and the following substituted:

(c) ensure that, in the first 12 months after the registration date, the indebtedness secured by eligible securities registered against the property is not reduced by more than the following:

(i) if the registration date is on or after February 16, 2005 and the property is property referred to in paragraph (a) of the definition of "qualifying value", the greater of

(A) $13 000, and

(B) the amount that would reduce that indebtedness to 70% of the fair market value of the property as at the date on which the application for registration of the eligible transaction was made at a land title office;

(ii) if the registration date is on or after February 16, 2005 and the property is property referred to in paragraph (b) of the definition of "qualifying value", the greater of

(A) $10 600, and

(B) the amount that would reduce that indebtedness to 70% of the fair market value of the property as at the date on which the application for registration of the eligible transaction was made at a land title office;

(iii) if the registration date is before February 16, 2005 and the property is property referred to in paragraph (a) of the definition of "qualifying value", the greater of

(A) $11 000, and

(B) the amount that would reduce that indebtedness to 70% of the fair market value of the property as at the date on which the application for registration of the eligible transaction was made at a land title office;

(iv) if the registration date is before February 16, 2005 and the property is property referred to in paragraph (b) of the definition of "qualifying value", the greater of

(A) $9 000, and

(B) the amount that would reduce that indebtedness to 70% of the fair market value of the property as at the date on which the application for registration of the eligible transaction was made at a land title office.

35 Section 8 (1) (c) is amended

(a) in subparagraphs (i) and (ii) by striking out "the registration date is on or after February 16, 2005 and", and

(b) by repealing subparagraphs (iii) and (iv).

 
School Act

36 The School Act, R.S.B.C. 1996, c. 412, is amended by adding the following section:

School tax exemptions and refunds for approved
and eligible alternative energy power projects

131.1 (1) In this section, "power project" and "supply" have the same meaning as in section 1 of the Hydro and Power Authority Act.

(2) The Lieutenant Governor in Council may

(a) establish and approve one or more classes of alternative energy power projects for the purposes of this section, and

(b) in respect of one or more power projects or types of power projects, within a class of alternative energy power projects approved under paragraph (a), make regulations providing for

(i) exemptions from school taxes, and

(ii) refunds of school taxes paid.

(3) A regulation providing an exemption from school taxes under subsection (2) (b) (i) may, as the Lieutenant Governor in Council considers advisable,

(a) designate one or more power projects or types of power projects, within a class of alternative energy power projects approved under subsection (2) (a), as eligible for the exemption,

(b) limit the exemption to newer power projects, and for that purpose establish what constitutes a newer power project,

(c) limit the exemption to specified types of land, improvements or both, that are used, or will be used at a future time, for or in connection with the generation or supply of power,

(d) establish the conditions on which and prescribe the manner in which the exemption may be provided, and

(e) provide differently for different power projects or types of power projects.

(4) The Lieutenant Governor in Council may make a regulation providing an exemption under this section retroactive to the extent necessary to apply for the purposes of the 2005 taxation year.

(5) A regulation may not be made under subsection (4) after December 31, 2005.

(6) A regulation providing a refund of school taxes under subsection (2) (b) (ii) may, as the Lieutenant Governor in Council considers advisable,

(a) designate one or more power projects or types of power projects, within a class of alternative energy power projects approved under subsection (2) (a), in respect of which the refund may be provided,

(b) limit the refund to newer power projects, and for that purpose establish what constitutes a newer power project,

(c) limit the refund to school taxes paid by the taxpayer in respect of specified types of land, improvements or both,

(d) establish the conditions on which and prescribe the manner in which the refund may be provided to the taxpayer, and

(e) provide differently for different power projects or types of power projects.

(7) School tax refunds provided under this section must be paid out of the consolidated revenue fund.

 
Social Service Tax Act

37 Section 1 of the Social Service Tax Act, R.S.B.C. 1996, c. 431, is amended in paragraph (b) of the definition of "tax" by adding "96 (7)," after "95,".

38 Sections 6 (3), 10 (1) (b), 20 (1) (b) and 37 (2) (b) are amended

(a) by striking out "$47 000" in both places and substituting "$49 000",

(b) by striking out "$48 000" in both places and substituting "$50 000", and

(c) by striking out "$49 000" in both places and substituting "$51 000".

39 The following section is added:

Tax if recording exhibited

21.1 A person

(a) who, under section 76 (1) (l) (ii), acquired exempt from tax a recording of a motion picture, and

(b) who exhibits the motion picture in a movie theatre or other public venue

must, at the time the motion picture is exhibited, pay tax in an amount equal to the amount that would have been payable if the person had acquired the right or authority to exhibit the motion picture from a willing lessor acting in good faith in an arm's length transaction in the open market.

40 Section 71 (j) is amended by striking out "$50" and substituting "$250".

41 Section 74 (e) is amended by adding ", subject to the prescribed terms and conditions" after "energy".

42 Section 75 is amended

(a) by renumbering the section as section 75 (1), and

(b) by adding the following subsection:

(2) Tax payable under sections 5 to 25 and 112.3 by a purchaser, user or lessee of a motor vehicle that qualifies under the regulations as an alternative fuel vehicle is reduced by the amount set out in the regulations.

43 Section 76 (1) is amended by adding the following paragraph:

(l) a recording of a moving picture production or of an audio production acquired for the purpose of

(i) public broadcast by a licensed radio or television broadcaster, or

(ii) making copies

(A) for public broadcast by a licensed radio or television broadcaster,

(B) subject to section 21.1, for public exhibition in a movie theatre or other public venue, or

(C) for sale or lease.

44 Section 76 (1) (l) is amended by striking out "or" at the end of subparagraph (i), by adding ", or" at the end of subparagraph (ii) and by adding the following subparagraph:

(iii) copying into another recording of a moving picture production or of an audio production for

(A) public broadcast by a licensed radio or television broadcaster,

(B) public exhibition in a movie theatre or other public venue, or

(C) sale or lease.

45 Section 90.2 is repealed.

46 Section 130 is amended

(a) in paragraph (h) by striking out "90.2" and substituting "75 (2)", and

(b) by repealing paragraph (j) and substituting the following:

(j) prescribing tax reductions under section 75 (2), including different reductions for different classes of alternative fuel vehicles.

47 Section 138 (1) is amended by adding the following paragraphs:

(j) prescribing tangible personal property for the purposes of section 74 (e), and specifying terms and conditions of the exemption;

(j.1) requiring, in prescribed circumstances, that a refund be paid to prescribed persons for tax paid on or in respect of tangible personal property prescribed as exempt under paragraph (j); .

 
Tobacco Tax Act

48 Section 51 of the Tobacco Tax Act, R.S.B.C. 1996, c. 452, is amended

(a) in subsection (2) (b) by striking out "or" at the end of subparagraph (iii), by adding ", or" at the end of subparagraph (iv) and by adding the following subparagraph:

(v) was acquired for the purpose of sale at retail in British Columbia from a person who is not authorized, by a dealer's permit as required by section 5 (2), to sell tobacco at wholesale. , and

(b) in subsection (3) by striking out "subsection (2) (b) (iv)," and substituting "subsection (2) (b) (iv) and (v),".

 
Transitional Provisions

Transitional -- Insurance Premium Tax Act

49 Regulations made under the Insurance Premium Tax Act approving medical services or health care plans may, if made before December 31, 2005, be made retroactive to January 1, 1997, and a regulation made retroactive is deemed to have come into force on the date specified in the regulation.

Transitional -- Social Service Tax Act

50 Regulations made under section 130 (j) or 138 (1) (j) or (j.1) of the Social Service Tax Act may, if made before June 1, 2005, be made retroactive to a date on or after February 16, 2005.

Commencement

51 The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table: