Ontario Minister of Finance, Dwight Duncan, released his 2008 Budget on March 25, 2008. Following is a summary of the relevant measures for clients of the firm:
- New for 2009 will be a Senior Homeowners’ Property Tax Grant of up to $250 which increases to $500 for 2010 and subsequent years. Single seniors with income less than $35,000 ($45,000 for a couple) will receive the maximum grant. Those having income between $35,000 and $50,000 ($45,000 and $60,000 for couples) will receive a proportionately smaller grant.
- A new annual textbook and technology grant to full-time post-secondary students. For 2008, the grant will be $150 per student, $225 in 2009 and $300 thereafter.
- Transfers of farm land from family farm corporations to individual family members will be exempt from Land Transfer Tax, for qualifying transfers occurring after March 25, 2008.
- A 10 year income tax exemption will be available for new corporations that commercialize intellectual property developed by qualifying Canadian universities, colleges or research institutes.
- An increase in the Ontario Innovation Tax Credit (OITC) expenditure limit from $2 million to $3 million of qualifying SR & ED expenditures. The upper limit of the taxable income phase out range will increase to $700,000 from $600,000. These changes reflect similar changes announced in the 2008 Federal Budget and will be effective once the federal implementing legislation is enacted.
- Elimination of the Capital Tax for companies primarily engaged in manufacturing and resource activities will now be retroactive to January 1, 2007. This proposal applies to corporations whose salaries and wages relating to M&P activities, represent 50% or more of their total salaries and wages in Ontario. Where M&P salaries and wages are between 20% and 50% of total salaries and wages, a proportionate reduction in the Capital Tax will be available.
- Extend the 50% straight-line CCA rate for M&P equipment to assets acquired in 2009 (previously only available for 2008 acquisitions) and 50% declining balance for qualifying assets acquired in 2010 and 2011. These measures parallel those announced in the 2008 Federal Budget.
- Ontario will adopt various measures announced in the 2008 Federal Budget including the Tax Free Savings Account (TFSA), changes to the rules governing Registered Education Savings Plans, capital gains tax exemption for the donation of certain exchangeable securities, and changes to the excess corporate holdings regime for private foundations
As noted, this is only a summary. Please contact your DJB professional for further information