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Last updated: Oct. 8, 2021
On March 25, 2021, Nova Scotia Finance Minister Labi Kousoulis presented the province’s fiscal 2021-22 budget.
No surprises here – Nova Scotia is spending more on health care like other provinces. On the business side, they announced property tax relief for small business owners and the extension of the Equity Tax Credit. There are no changes to the personal tax rates, Nova Scotia corporate tax rate or the HST.
We outline the measures in the budget that may impact your small business below.
Equity Tax Credit Extension
The budget extends the Equity Tax Credit for investments in Community Economic Development Investment Funds (CEDIFs) until February 28, 2032.
The Equity Tax Credit provides a 35% tax credit for individuals who invest up to $50,000 in a taxation year and hold their shares for a five-year period. The credit was previously scheduled to expire on February 28, 2022.
New Small Business Real Property Tax Rebate Program
The Small Business Real Property Tax Rebate Program will give eligible businesses a one-time rebate of $1,000 or 50% of their property taxes paid for the last 6 months of the 2020-21 tax year.
The program is for gyms and fitness establishments, dine-in restaurants and drinking establishments, and businesses like salons, spas, barber shops and body art establishments.
To qualify, your business must:
- Be registered to do business in Nova Scotia
- Not be a corporate store of a franchise network with establishments located outside Atlantic Canada
- Have either:
- Received benefits under the Nova Scotia Small Business Impact Grant (Part 1 or 2) or the Small Business Reopening and Support Program
- Experienced a year-over-year decline in revenues of at least 30% in any of the three months of April, May or June 2020
- Started business operations in Nova Scotia on or after Jan. 1, 2020
- Conduct eligible business activities primarily from business premises in Nova Scotia that are assessed at a commercial tax rate
- Have not received rebates through the Tourism Accommodations Real Property Tax Rebate Program
The province says applications will open soon.
Second Round of the Tourism Accommodations Real Property Tax Rebate Program
The province will offer a second round of the Tourism Accommodations Real Property Tax Rebate Program. This program provides Nova Scotia’s hotel, motel and inn operators with a 50% payment on the first six months of their 2021-22 commercial property tax. Tourism accommodation operators can use the rebate for any aspect of their business, including hiring staff, paying down debt, paying utilities or ordering supplies.
To qualify for the rebate, your business must:
- Meet the definition of a roofed accommodation as set out in the Tourist Accommodation Registration Act
- Be registered as a host under the act
- Have more than five rooms
- Not be in arrears of property taxes or property tax installment payments
- And have experienced a year-over-year revenue loss of at least 30% from April 1 to Oct. 31, 2020
Applications for this program will open in Spring 2021.
If you’ve previously received support through the first round of this program, you will automatically qualify for the new support. You’ll be contacted directly by the program administrators.
PERSONAL TAX MEASURES
Personal income tax rates in Nova Scotia
As mentioned above, the budget does not include any changes to personal income tax rates. Nova Scotia’s personal income tax rates are set out below.
| 2020/2021 Nova Scotia Personal Tax Rates | |||
| Bracket | 2020 Rates | 2021 Rates | |
| $0 – $29,590 | 8.79% | 8.79% | |
| $25,591 to $59,180 | 14.95% | 14.95% | |
| $51,181 to $93,000 | 16.67% | 16.67% | |
| $93,001 to $150,000 | 17.50% | 17.50% | |
| Above $150,000 | 21.00% | 21.00% | |
For taxable income in excess of $150,000, the 2021 combined federal-Nova Scotia personal income tax rates are as follows:
| Personal Combined Federal/Provincial Marginal Rates | |||||
| 2021 | $150,000 to $151,978 | $151,978 to $216,511 | Above $216,511 | ||
| Interest and regular income | 47.00% | 50.32% | 54.00% | ||
| Capital gains | 23.50% | 25.16% | 27.00% | ||
| Eligible dividends | 31.92% | 36.50% | 41.58% | ||
| Non-eligible dividends | 40.23% | 44.05% | 48.28% | ||
Nova Scotia Personal Tax Credits
Personal tax credits for 2020 will be indexed by 1.0%. The maximum tax credit amounts and actual Nova Scotia tax credits for 2020 and 2021 are set out below.
Nova Scotia Non-Refundable Tax Credits |
||||
| 2020 | 2021 | |||
|
Maximum Amount |
Nova Scotia
Tax Credit |
Maximum Amount |
Nova Scotia
Tax Credit |
|
| Basic Personal Amount | $8,481 | $745 | $8,481 | $745 |
| Spousal Amount | 8,481 | 745 | 8,481 | 745 |
| Eligible dependent amount | 8,481 | 745 | 8,481 | 745 |
| Age amount | 4,141 | 364 | 4,141 | 364 |
| Infirm dependent amount | 2,798 | 246 | 2,798 | 246 |
| CPP Contributions | 2,898 | 255 | 3,166 | 278 |
| EI Contributions | 856 | 75 | 890 | 78 |
| Pension income amount | 1,173 | 103 | 1,173 | 103 |
| Disability amount | 7,341 | 645 | 7,341 | 645 |
| Disability supplement | 3,449 | 303 | 3,449 | 303 |
| Tuition and education amounts | Variable | Variable | Variable | Variable |
| Adoption expenses | 0 | 0 | 0 | 0 |
| Medical expenses | Variable | Variable | Variable | Variable |
| Medical expenses (other dependents) | N/A | N/A | N/A | N/A |
| Caregiver amount | 4,898 | 431 | 4,898 | 431 |
| Interest on student loans | Variable | Variable | Variable | Variable |
| Donations & Gifts
-first $200 – over $200 |
200 75% of income |
20 Variable |
200 75% of income |
20 Variable |
| In general, credits are multiplied by 8.79% to arrive at the deduction from Nova Scotia Tax. In the case of donations and gifts over $200, the credit is 21% | ||||
Corporate tax measures
Nova Scotia corporate tax rate
No corporate tax rate changes were proposed in the budget. As a result, Nova Scotia’s small business tax rate remains as follows:
Corporate Income Tax Rates — As of January 1, 2021 |
||
| Nova Scotia | Combined Federal and Nova Scotia | |
| General | 14% | 29% |
| Small business* | 2.5% | 11.5% |
| on first $500,000 of active business income | ||
Contact FBC
Have questions about this or other COVID-19 programs for Canadian businesses? Unlimited consultation related to tax matters is a key benefit of FBC Membership. We’re offering a free consult where we get to know your business and determine next steps on saving you time and money. Book your appointment online.
You can also visit our COVID-19 Resource Centre for the latest information on Canadian small business grants and other resources that will support you and your business throughout this crisis.
