by the manufacturer or producer, the tax becomes payable when the property in the goods passes to the purchaser thereof. RETURNS AND PAYMENT OF TAXES All firms subject to license are required to make a monthly return showing the total amount of taxable sales during the preceding month. Each return, which must be on a prescribed form and sworn to, is required to be filed and paid by not later than the last day of the next succeeding month. Firms operating offices or branches in more than one locality may, if they so desire, make one return to be filed by the head office for the entire business of the firm, or they may make returns and pay their tax at each of their branches. COMPUTATION OF TAX In respect of goods subject to the sales tax sold by retail by the manufacturer thereof in Canada the value of the goods for the purposes of the tax will be determined by the Minister of National Revenue in each class of cases, and he will also determine the wholesale price for purposes of transfer by the manufacturer to his wholesale branches when goods are sold to retailers only. The wholesale price is defined as the price at which the goods are regularly sold in representative quantities in the ordinary course of business to bona fide independent wholesalers, and is the value upon which the tax is payable when goods are sold to affiliated or subsidiary concerns. Licensed wholesalers are required to account for the sales tax on their taxable sales on the cost of domestic goods and on the dutypaid value of imported goods, even though by reason of depreciation or obsolescence the selling price may be less than this. GOODS EXEMPTED FROM TAX Numerous products, domestic and foreign, are exempted from the sales tax under schedule III of the act. In general, the tax does not apply to staple foodstuffs, to feedstuffs, nor to the implements used in the primary industries of farming, fishing, mining, and lumbering. SPECIAL EXCISE TAX ON IMPORTS A special excise tax of 3 percent is levied on the duty-paid value of all goods imported into Canada and is payable by the importer or transferee who takes the goods out of bond for consumption at the time when the goods are imported or taken out of the warehouse for consumption. Exempted from this tax are goods, the duty-paid value of which does not exceed $25, when imported by mail or express or by the owner thereof when entering Canada unless more than one entry of such goods be made by one importer during one day from one country, in which case the tax is applicable; certain articles enumerated in schedule V 90 of the act; and goods imported into Canada which are entitled to entry under the British preferen Complete lists of articles exempted from the sales tax, and the special excise tax on imported goods, may be obtained from the Foreign Tariffs Division, Bureau of Foreign and Domestic Commerce. tial tariff or under trade agreements between Canada and other British countries. STAMP DUTIES ON CHECKS, BILLS OF EXCHANGE, AND OTHER INSTRUMENTS Checks, bills of exchange, promissory notes, travelers' checks, money orders, and receipts to banks are subject " to a stamp tax of 3 cents if the amount for which the instrument is drawn does not exceed $100, and 6 cents if in excess of $100. Notes held by banks as collateral security for indebtedness are not subject to tax unless paid. The tax is payable by affixing an excise or postage stamp or by stamp impressed by means of an official die. Every person must affix a stamp on the transfer of a bill of exchange or promissory note to a bank as the holder, on delivery to a bank for collection or when issuing, for the purpose of selling foreign exchange, a bill of exchange drawn upon a person outside of Canada according to the tenor of the bill. Every bank having in its possession in Canada any check, bill of exchange, or promissory note made or drawn out of Canada, and payable in Canada, is required to affix the proper excise stamp before payment or presentment for payment; the value of the stamp so affixed is payable to the bank by the person entitled to the proceeds of the instrument. Postal notes issued for an amount in excess of $1 are subject to a stamp tax of 3 cents and for lesser amounts, 1 cent. EXCISE TAXES Excise taxes are levied by the Dominion Government on various products imported or manufactured in Canada, such as matches, cigarette papers, automobiles, toilet articles, cigars, sugar, tires and tubes, playing cards, and wines. Inquiries regarding excise taxes and the special excise tax on imports should be addressed to the Foreign Tariffs Division, Bureau of Foreign and Domestic Commerce. TAX ON INSURANCE COMPANIES AND BANKS Part III of the Dominion Special War Revenue Act provides that every insurance company, other than a life-insurance, marineinsurance, or mutual company carrying on business on the premium deposit plan and an exchange, must pay a tax of 1 percent on the net premiums received by it in Canada, less the net premiums paid for reinsurance to companies to which the act applies. Every mutual company and exchange is subject to a tax of 2 percent upon net premiums. Persons resident in Canada who insure their Canadian property in foreign insurance companies not authorized under the laws of the Dominion or of any Province to transact the business of insurance must pay a tax of 10 percent of the net premiums paid. Banks are liable to a tax of one-fourth of 1 percent on the average amount of their notes in circulation under the provisions of part I of the Special War Revenue Act. 91 Special War Revenue Act, Office Consolidation, July 1935, secs. 43-57, 64–70. SECURITY TRANSFER TAXES DOMINION TAX Under the Special War Revenue Act, 1917, as amended, the Dominion Government imposes an excise tax upon every change of ownership consequent upon the sale, transfer, or assignment of any bond or of any share of the capital stock of any association, company, or corporation, or of any participating interests in the operating profits of any association, company, or corporation, fund or trust, whether expressed in shares or not, represented by a certificate, or other instruments of title capable of being sold, transferred or assigned, including mineral deeds, oil royalties, syndicate units, and fixed investment trust shares issued by a trustee and representing equitable ownership in deposited securities. The rates are as follows: (a) Three cents for every $100 or fraction thereof, of the par value of a bond, debenture, or share of debenture stock. (b) For every share sold, transferred, or assigned at a price or valuation of over $150 per share, 4 cents per share, plus one-tenth of 1 percent of the price or value of the share in excess of $150. Over $75 but not more than $150: 4 cents. Where there is a change of ownership otherwise than by sale, the tax is computed on the basis of the current market value of the share of stock. In cases where a current market value has not been established by recent sales or where it is difficult to ascertain the value of shares, the Minister may fix a value on which the tax shall be paid. The tax is payable in excise stamps by the vendor, transferor, or assignor. The following transactions are not subject to the transfer tax: (a) The sale, transfer, or assignment of any bond of the Dominion of Canada, or of any Province of Canada. (b) The allotment by any association, company, or corporation of its shares, in order to effect an issue thereof, and the first issue of a bond, or of any participating interest in the operations or profits of any association, company, corporation, fund or trust represented by certificate or other instrument of title capable of being sold, transferred, or assigned. (c) The sale to any person resident and domiciled outside of Canada of any bond, provided such sale is duly completed by a delivery of the certificate or other instrument of title to a point outside of Canada. (d) Any transmission on account of death. (e) Any gift made inter vivos in consideration of natural love and affection, or to a religious, charitable, or educational institution. PROVINCIAL TRANSFER TAXES Under the Ontario Corporations Tax Act, a stock-transfer tax is levied by the Province upon every change of ownership of shares, bonds, debentures, etc., made or carried into effect in Ontario, and upon every order given in Ontario for the sale, transfer, or assignment of securities when the order is to be executed outside of Ontario. The rates are as follows: (1) 3 cents for every $100 or fraction thereof, of the par value of a bond, debenture, or debenture stock. (2) For every share of stock sold or transferred when the price per share is Over $150: 5 cents. Over $75 but not over $150: 4 cents. The Quebec Security Transfer Tax Act provides the same rates as those levied by the Ontario Government upon the transfer of securities and on the same basis as in Ontario. The Alberta and British Columbia Stock Transfer Taxes are as follows: (1) 3 cents for every $100 or fraction thereof of the par value of a bond. (2) On every share of stock sold or transferred at a price Over $100: 4 cents. Between $20 and $100: 3 cents. SASKATCHEWAN RETAIL SALES TAX Under the Saskatchewan Education Tax Act of April 16, 1937, a 2-percent retail sales tax is imposed on and collected from consumers and users of tangible personal property to raise money for educational purposes. All retail vendors of tangible personal property in the Province are required to hold a license for which no fee is charged, and to levy and collect the tax from the consumer computed on the value of the property. The following classes of personal property are exempt from the tax: Bread; flour; milk, including buttermilk; cream; butter; eggs; sugar; fresh meat; fresh poultry; fresh fish: water; coal; wood; newspapers; gasoline taxable under the Gasoline Act; farm implements and parts; farm machinery and parts; grain and mill feeds; binder twine; fishing nets; agricultural products (including livestock) produced within the Province when sold by the producer thereof; and railway rolling stock, ties, and steel rails. The act came into effect on August 2, 1937. MUNICIPAL TAXES The principal source of municipal revenue is the real estate or property tax generally assessed at the rate of so many mills on the dollar of the assessed valuation, although municipalities in certain Provinces also tax personal property, income, and businesses. The municipalities also collect license fees on various types of activities carried on within their limits. As the property rates, methods of assessment, and types of local taxes vary considerably, any firm or individual establishing an office or engaging in business in a particular municipality should obtain information direct from the local authorities. Some of the taxes levied by a number of municipalities are shown below: Halifax, Nova Scotia.-No taxes are levied in Halifax on income of individuals or profits of commercial or manufacturing undertakings. There is a graduated poll tax based on salary remuneration or income, the schedule of which is as follows: Municipal taxes are based on real estate, either owned or leased. St. John, New Brunswick.-Taxes assessable on real estate, business, and income, with certain exemptions on income. The business tax is based on value of premises occupied. The tax rate (1935) was 4 percent, applicable on property, income, or business. Montreal, Quebec.-Real-estate tax (1936): Municipal assessment $1.739 per $100 of real estate valuation, plus a school tax of $1 for Protestants, $1.20 for neutrals, and from $0.70 to $0.85 in Catholic school districts. Water tax: 72 percent of annual assessed rental. Business tax: 10 percent of annual assessed rental. Income tax: On individuals but not on corporations (see Quebec income taxation). Toronto, Ontario.-No municipal income tax is now levied. Commencing with 1936 the Ontario government imposes a Provincial income tax, part of the revenue of which is allocated to the municipalities. Municipal property tax, 1936 rate, for public-school supporters was 34.85 mills and for separate (Catholic) school supporters 39.40 mills, levied on business and realty assessments. Winnipeg, Manitoba.-No income or corporation tax is levied by the municipality. Regina, Saskatchewan.-No income or corporation tax is levied by the municipality. Municipality taxes are levied on land and business; the land is assessed at 100 percent of value, building improvements at 30 percent, and business on a floor-space basis at rates. ranging from $0.15 per square foot for open yard space to $8 per square foot for financial business. The tax rate is 50 mills for publicschool supporters and 56.53 mills for separate (Catholic) school supporters. Calgary, Alberta.-No income or corporation tax is levied by the municipality. Usual property taxes are imposed, as well as a tax at the rate of 8 percent on the annual rental value of business properties. Vancouver, British Columbia.-No income or corporation tax is levied by the municipality. Municipal tax, assessed on 100 percent of land value and 50 percent on improvement values, was 37.886 mills on the dollar for 1936. |