Manitoba 2010 Budget: Business Tax Measures
http://www.gov.mb.ca/finance/taxation/bulletins/2010budget.pdf
Manitoba PST Rate: - 7%
Manitoba’s five-year economic plan helps the province continue to weather the worldwide economic recession while positioning Manitoba for growth and prosperity in the years ahead.
Budget 2010 projects a summary shortfall of $545 million, which includes core government departments, Crown corporations and pension obligations. A payment of $96 million will be made to start paying down principle and interest on the debt incurred as a result of the economic downturn.
Over the course of the five-year plan, the deficit will be eliminated and the province will return to balance by Budget 2014.
Independent forecasters are projecting economic growth of 2.5 per cent this year and three per cent next year for Manitoba.
Retail Sales Tax
The 2010 budget states that Manitoba has declined invitations to harmonize its sales tax with the federal goods and services tax. It proposes the following retail sales tax (RST) changes:
- Small businesses – Businesses with under $10,000 in annual taxable sales will not be required to register and collect RST.
Corporate Income Tax Rate
- The budget does not revise Manitoba’s general corporate rate which stands at 12% currently, which also applies to manufacturing and processing (M&P) income.
Small Business Income Tax Rate
- Manitoba’s small business limit will remain $400,000.
- The budget confirms that the following previously announced change to its small business rate will proceed.
- January 1 2009 – 1%
- December 1 2010 – 0%
Corporate Capital Tax
The budget does not revise capital tax rates. Capital tax:
- Was eliminated on July 1, 2008, for corporations that use more than 50% of their labour and capital in Manitoba in M&P activities; and
- Will be eliminated after 2010 for other corporations.
Research and Development Tax Credit
- The budget phases in partial refundability for Manitoba’s 20% Research and Development (R&D) Tax Credit for in-house R&D expenses.
- The credit will be 25% refundable for these expenditures in 2011 and 50% refundable after 2011.
- The credit is already fully refundable for R&D expenditures incurred under a contract with a qualifying research institute in Manitoba.
Small Business Venture Capital Tax Credit
- The Small Business Venture Capital Tax Credit will replace the Community Enterprise Investment Tax Credit and will expire December 31, 2013.
- This new program will prioritize economic developments in accordance with provincial objectives and its administration will correspond to other tax credit programs.