Bill 137 2004

An Act to amend the
Income Tax Act to provide for
a tax credit for expenses incurred
in using public transit

Preamble

Public transit is an important public good for Ontario which must be promoted.

By encouraging people to use public transit, many benefits result. For instance, harmful greenhouse gas emissions are reduced and traffic congestion and gridlock are eased because fewer motorists will be on our province's roads.

In order to encourage people to use public transit, it is important to give them incentives. One way to achieve this is to permit taxpayers to obtain a non-refundable income tax credit for expenses incurred for using public transit.

Therefore, Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

1.  (1)  Subsection 8 (10) of the Income Tax Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule B, section 4 and amended by 1998, chapter 34, section 69, is amended by adding at the end "except no portion of the individual's public transit expense tax credit determined under section 8.4.5 for the taxation year shall form part of the amount paid under this subsection".

(2)  Section 8 of the Act, as amended by the Statutes of Ontario, 1992, chapter 18, section 55, 1992, chapter 25, section 3, 1993, chapter 29, section 6, 1994, chapter 17, section 99, 1996, chapter 1, Schedule C, section 8, 1996, chapter 24, section 13, 1996, chapter 29, section 9, 1997, chapter 19, section 9, 1997, chapter 43, Schedule B, section 4, 1998, chapter 5, section 3, 1998, chapter 9, section 81, 1998, chapter 34, section 69, 1999, chapter 9, section 120, 2000, chapter 42, section 55, 2001, chapter 8, section 40, 2001, chapter 23, section 131, 2002, chapter 22, section 108, 2003, chapter 4, section 11 and 2003, chapter 7, section 12, is amended by adding the following subsections:

Public transit expense tax credit

(16.1)  An individual who is an eligible individual under section 8.4.5 for a taxation year ending after December 31, 2004 may deduct from the amount of tax otherwise payable under this Act for the taxation year an amount not exceeding the amount of the individual's public transit expense tax credit determined under that section for the taxation year.

Same, payer of expenses

(16.2)  A taxpayer who pays public transit expenses on behalf of an eligible individual under section 8.4.5 for a taxation year ending after December 31, 2004 may deduct from the amount of tax otherwise payable under this Act for the taxation year an amount not exceeding the amount of the payer's public transit expense tax credit determined under that section for the taxation year.

2.  The Act is amended by adding the following section:

Public transit expense tax credit

8.4.5  (1)  In this section,

"eligible individual" means, in respect of a taxation year, an individual other than a trust who is resident in Ontario on the last day of the year and subject to tax under this Act throughout the year; ("particulier admissible")

"public transit expenses" means expenses incurred by an eligible individual for personal transportation on a regular passenger transportation service operated by, for or on behalf of the Government of Ontario, a municipality in Ontario or a transit commission or authority in Ontario. ("dépenses de transports en commun")

Amount of tax credit

(2)  Subject to subsection (4), the amount of an eligible individual's public transit expense tax credit for a taxation year under subsection 8 (16.1) is 50 per cent of the public transit expenses that the individual incurs and pays in respect of the taxation year.

Same, for payer

(3)  Subject to subsection (4), the amount of a payer's public transit expense tax credit for a taxation year under subsection 8 (16.2) is 50 per cent of the public transit expenses that an eligible individual incurs in respect of the taxation year and that the payer pays on behalf of the individual.

Receipts required

(4)  No person may claim a tax credit under this section for the public transit expenses that an eligible individual incurs unless the individual,

(a) obtains receipts, in a form approved by the Minister, for the expenses issued by the provider of the transportation service to which the expenses relate; and

(b) forwards the receipts to the person who paid the expenses on behalf of the individual, if the person is not the individual.

Duty to provide receipts

(5)  A provider of a transportation service to which an eligible individual's public transit expenses relate shall, at the request of the individual and at no cost to the individual, provide to the individual a receipt in a form approved by the Minister for any such expense.

Commencement

3.  This Act comes into force on the day it receives Royal Assent.

Short title

4.  The short title of this Act is the Income Tax Amendment Act (Public Transit Expense Tax Credit), 2004.

EXPLANATORY NOTE

The Bill amends the Income Tax Act to permit taxpayers to obtain a non-refundable income tax credit for expenses that they incur and pay for using public transit. If another person pays the expenses on behalf of the taxpayer, that other person is entitled to the tax credit.