The recent budget included a number of items of interest for members of the not-for-profit and charity section.
TAXES IN DISPUTE AND CHARITABLE DONATION TAX SHELTERS
Where a taxpayer has invested in a tax shelter that involves a charitable donation and subsequently files an objection of Canada Revenue Agency's reassessment of the tax credits claimed, the 2013 Budget permits Canada Revenue Agency to collect 50% of the disputed tax, interest or penalties, pending the ultimate determination of the taxpayer's liability. This measure will apply in respect of amounts assessed for the 2013 and subsequent taxation years. For recently released Q&A from the Canada Revenue Agency on this measure, please go to: http://www.cra-arc.gc.ca/gncy/bdgt/2013/qa13-eng.html.
SUPPLIES OF PAID PARKING BY A PUBLIC SECTOR BODY ("PSB")
Special provisions exempt from GST/HST are all supplies of a property or a service made by a PSB if all or substantially all (generally 90% or more) of the supplies of the property or service are made for free. A PSB includes a not-for-profit organization, a charity, a municipality, a school authority, a hospital authority, a public college, a university and a government. Budget 2013 proposes to clarify that this special simplifying exemption provision does not apply to supplies of paid parking that are made in the course of a business carried on by a PSB. Taxable parking would include paid parking provided on a regular basis by a PSB. Occasional supplies of paid parking by a PSB, such as those made as part of a special fund-raising event, would continue to qualify for the exemption. These measures are deemed to have come into force on December 17, 1990.
SUPPLIES OF PAID PARKING THROUGH CHARITIES
A special exemption from GST/HST applies to parking provided by charities that are not a municipality, university, public college, school or hospital. Budget 2013 proposes to clarify that the special GST/HST exemption for parking supplied by charities does not apply to supplies of paid parking that are made in the course of a business carried on by a charity set up or used by a municipality, university, public college, school or a hospital to operate a parking facility. This measure will apply to supplies made after March 21, 2013.
FIRST-TIME DONOR'S SUPER CREDIT
The existing Charitable Donations Tax Credit provides individual donors with a tax credit of 15% for the first $200 of an individual's total annual charitable donations and a further credit of 29% for any amount over $200 donated. Budget 2013 proposes to introduce a new temporary First-Time Donor's Super Credit for First-Time individual donors providing an additional 25% tax credit on cash donations up to $1000. Combining the Charitable Donations Tax Credit and the First-Time Donor's Super Credit, a First-Time donor would be entitled to a 40% federal tax credit with respect to donations up to $200 and a 54% federal tax credit on the portion of donations in excess of the $200 threshold. This measure will apply in respect of first-time donations made on or after March 21, 2013 and before 2018. For recently released Q&A from the Canada Revenue Agency that further discusses this measure, please go to: "http://www.cra-arc.gc.ca/ gncy/bdgt/2013/qa01-eng.html" .
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