On the 6th of June 2013 the Premier and Treasurer, Mr Jay Weatherill handed down the 2013-14 State Budget. The estimated net deficit for the 2012-13 year is a $1,314 million, an increase of $145 million from the Mid-Year Budget Review. The budget for 2013–14 is a deficit of $911 million with an estimated return to a “substantial surplus” in 2015–16 of $375 million.
The following key taxation measures were announced by the Government as part of the Budget.
Land Tax Exemptions for Not-for-Profit Community Associations
The State Government have announced the extension of the scope of land tax exemptions available for land used for sporting, recreational and community based activities to a wider range of not-for-profit community associations that provide services or support to the community.
Accordingly, associations that provide services or support to the community, in the areas of literature, science, the arts and preserving traditional cultural heritage, may now be eligible for a land tax exemption on the land used for these activities.
Small Business Payroll Tax Rebate
The State Government has announced a two-year payroll tax rebate payment which will be provided to eligible employers with a taxable Australian payroll of less than or equal to $1.2 million.
The rebate payment will be paid in the first half of the 2013-14 and 2014-15 financial years, based on eligible employers’ 2012-13 and 2013-14 taxable payrolls respectively.
Employers will not be eligible for the rebate payment until their relevant annual payroll tax reconciliation process is final (including payment of any underpayments made during the year).
Once the rebate payments have been made, employers with a taxable Australian payroll of up to $1 million will have effectively only paid payroll tax at a level equivalent to 2.50% (2.45 percentage points lower than the statutory rate of 4.95%).
Rebate payments will phase out for eligible employers with a taxable payroll of between $1 million and $1.2 million.
The maximum benefit of the payroll tax rebate is $9,800 each year.
Stamp Duty Exemption for Corporate Reconstructions
The State Government will now provide a stamp duty exemption for all eligible corporate reconstructions from 1 July 2013, where certain requirements are met.
The stamp duty exemption will replace the corporate reconstruction ex-gratia relief administrative scheme that is currently provided by the Government, which provides relief for corporate reconstructions of up to 95% of duty otherwise payable.
The eligibility criteria for the exemption remains the same to the criteria applying under the current administrative scheme. That is, stamp duty relief may be provided to a transfer of assets between members of a corporate group that simplifies or rationalises a group structure that does not involve any change in the ultimate beneficial ownership of the assets. The transfer must involve “substantially all” of the assets of the transferor that has been a member of the same corporate group for three years prior to the transaction.
As the necessary amendments will not be passed before 1 July 2013, the current administrative scheme will operate until the new legislation is passed.
If you have any questions about the tax issues contained in this summary, please contact the William Buck Tax Directors, Ian Snook or Malcolm Wight.