The BC Provincial Government’s new Employer Health Tax (EHT) will be taking effect starting January 2019. Please see below as to how this new tax may affect you differently.
What is EHT?
The EHT is an annual tax on an employer’s BC remuneration. No employers are exempt from this tax. However, there is an exemption available in the amount of $500,000 for employers or $1,500,000 for charitable or non-profit employers.
For the employer health tax, a charitable or non-profit employer is defined to include both registered charities and non-profit organizations. Non-profit organizations are organizations described in section 149 (1)(e), (g), (i), (j), (k) or (l) of the Income Tax Act (Canada).
Section 149 (1)(l) of the Income Tax Act (Canada) refers to a club, society or association that isn’t a charity and is organized and operated only for social welfare, civic improvement, pleasure or recreation, or any other purpose other than profit.
How Might This Affect Your Co-op?
It is our understanding that if your organization is a Community Service Cooperative incorporated under the Cooperative Association Act and files a T1044 Non-Profit Organization (NPO) Information Return annually and would; therefore, likely qualify as a non-profit organization under s. 149 (1)(l) of the Income Tax Act (Canada) and be a charitable or non-profit employer for the purpose of the employer health tax.
For detailed information on charitable or non-profit employers’ tax liability, please refer to the webpage Employer Health Tax for Charitable & Non-Profit Employers: https://www2.gov.bc.ca/gov/