More businesses will be able to recover and grow through expanded access to the small business tax rate in British Columbia.
“The past two years have been challenging for small and medium-sized businesses as they deal with the continuing effects of the pandemic, climate change and inflation that is being fuelled by global uncertainty,” said Selina Robinson, Minister of Finance. “We are standing behind B.C. businesses by helping ensure access to the small business tax rate as they work through recovery, and innovate and grow.”
Growing B.C. businesses will be able to scale up by remaining eligible for the B.C. small business tax rate for longer, as the tax rate will not phase out until the $50-million taxable capital threshold ceiling. The change will benefit a wide range of businesses but will largely support those that are capital intensive.
Previously, access to the small business tax rate was gradually reduced when the taxable capital of businesses was more than $10 million. Access to the small business tax rate ended when businesses had $15 million or more of taxable capital. With the change, access to the small business tax rate will be gradually reduced when businesses have between $10 million and $50 million in taxable capital.
This includes businesses that have taxable capital between $10 million and $15 million, where business owners may decide not to invest in their business to acquire new equipment in order to keep access to the small business tax rate. This may look like a company, such as a craft brewery, considering adding a production line to its operations, or a company needing to buy specialized equipment, such as a computer numerical control (CNC) machine.
“Small and medium-sized businesses play an important role in our province. They provide good jobs, develop innovative products for the market and are strong supporters of their communities,” said Ravi Kahlon, Minister of Jobs, Economic Recovery and Innovation. “We are moving forward with the StrongerBC Economic Plan and important tax improvements like this as we continue to bring further improvements businesses need to succeed.”
The new, higher taxable capital ceiling will apply to taxation years that begin on or after April 7, 2022, which aligns with the federal approach, once passed.
[PHOTO] The brewery line at The Hatching Post, West Kelowna. Photo by Yvonne Turgeon.