Individuals and corporations in British Columbia that pay logging tax can claim the BC logging tax credit.
Equivalent to one-third of the logging tax payable, this is a non-refundable credit that can be calculated on page 1 of the provincial form FIN 542S, Logging Tax Return of Income for individuals, or page 2 of the provincial form FIN542P, Logging Tax Return of Income for Processors.
What is the BC logging tax?
The British Columbia logging tax is applicable to individuals and corporations in the province that received income related to logging operations that year. The tax applies to income from logging operations on private or Crown land.
The tax amount is equivalent to either 10% of the total income earned from the logging activity, or 150% of the federal logging credit allowed before political contributions and investment tax credits.
What is considered income from logging operations?
According to the Logging Tax Act, logs include piles, pulpwood, railway ties, poles, pulp logs, saw logs, spars, wood chips and other cut timber.
Logging operations include a variety of commercial activities involving timber. Some examples are:
- the sale or acquisition of standing timber
- the sale or acquisition of the right to cut standing timber
- the delivery of logs to a sawmill, pulp or paper plant, or other place for processing or manufacturing
- the import, export or transportation of logs
- the producing of primary and secondary forest products
There is no minimum amount when calculating logging income. It is usually gross revenue minus related operating expenses, calculated according to Division B of the Income Tax Act (Canada).
How to claim the logging tax credit
A corporation can claim the BC logging tax credit when they fill out Schedule 5, Tax Calculation Supplementary – Corporations. The amount being claimed must be inserted on line 651.
When individuals file their T1 Income Tax Return, they need to indicate the claim amount in the British Columbia Tax form (BC 428).
T2inc can help you claim the BC logging tax credit
Our tax advisors are available around the clock to help you file your tax returns efficiently and easily. Whether you need a corporate tax specialist or you are an individual who earns income from logging operations in BC, we can help you claim your logging tax credit.
Contact us today to learn more about our tax filing services.