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Nova Scotia & Federal Government Clash Horns Over Lottery Terminal T
They say that the only two things that are guaranteed in life are death and taxes.
Nova Scotia is challenging the second one in a new spat with the federal government over $53m that Ottawa says its owed from revenue collected from First Nations’ video lottery terminal (VLT) activity in the province.
Nova Scotia Appeals Its Tax Bill
The dispute began when Nova Scotia decided to appeal to the federal tax courts against the Canada Revenue Agency’s (CRA) decision to try and collect harmonized sales taxes on the terminals.
The reason behind the decision stems from the fact that the province doesn’t actually own the VLT’s, but instead simply rents or leases them to the First Nations. The province then argued that by extension, any revenue made by the First Nations is not provincial revenue and thus should not be included in its federal tax bill.
Vanishing Provincial Revenue Problematic
Canadians might be known for being nice, but that didn’t stop provincial representatives from getting a little bit testy when litigating the issue though the press:
“Anything that impacts on the revenues of the province in one way or the other is a big deal…if it takes away from revenues, then you have to decide how to continue the services and supports. What are your priorities if that source of revenue is gone?” said Karen Casey, Nova Scotia’s Finance Minister in a statement to the CBC.
Needless to say, the CRA disagrees with Nova Scotia’s assessment. They argue that because Nova Scotia “stood to win or lose from bets placed in the authorized VLT’s,” the province must pay tax on them.
Fighting against a federal tax bill is definitely an uphill battle. However, the fact that the court has agreed to hear the case at all is already a good sign. Nova Scotia’s arrangement with First Nations will clearly be subjected to much further legal scrutiny before a decision can be made.