On March 20, 2018, Finance and Treasury Board Minister Karen Casey presented the 2018-2019 Nova Scotia budget. This year’s budget, which is titled “Stronger Services and Support”, focuses on personal income tax by increasing a number of non-refundable credits, including the basic personal amount, the age amount, the spousal amount, and the dependent amount. The Medical Expense Tax Credit will also be improved by removing the $10,000 limit on eligible medical expenses that may be claimed for a dependent. In addition, a new, narrowly focused Innovation Equity Tax Credit will be introduced, effective January 1, 2019.
This year’s budget also includes one interesting commodity tax measure, as noted below.
Nova Scotia agreed to enter into a coordinated cannabis tax framework with the federal government this past December. Under this tax framework, a federal excise duty of $0.25 per gram of flowering material used in cannabis products will be collected by the federal government and an additional $0.75 per gram will be collected on behalf of the province. The duties to be paid by licensed producers, however, will be equal to the greater of the flat duty rate applied to the quantity of cannabis included in a final product at the time of packaging for retail sale; and a 10 per cent ad valorem rate applied to the selling price, excluding the excise duty, at the time of delivery. These duties will be collected once the cannabis is packaged for sale and delivered to provincially authorized non-medical cannabis retailers or to individuals purchasing medical cannabis.
These cannabis taxes will be in place for two years once recreational cannabis is legalized, and the province anticipates that they will raise $10.4 million in revenue during the 2018-19 budget year.
Further information on Nova Scotia’s 2018 budget may be found on the province's web site at: Nova Scotia Budget 2018
If you have any questions about how these proposed changes might impact your organization, please do not hesitate to call the Ryan TaxDirectTM line at 1.800.667.1600.