BC Employer Health Tax to include exemptions for Charities and Not-for-Profit Organizations with payroll under $1.5 million.
In a notice posted the first week of July 2018, the BC government announced their intention to allow a complete exemption from the Employer Health Tax (EHT) for both not-for-profit organizations and charities with a payroll below $1.5 million.
Legislation for the new tax will be put forward in the fall of 2018, and the tax will come into effect January 1, 2019. While the exemption does not apply to all organizations, it includes a majority of the 26,000 not-for-profits and charities in the province from paying the introduced EHT.
Not-for-profit organizations provide critical services and community supports throughout British Columbia. The higher exemption bracket enables small and medium sized not-for-profit organizations to continue their programs without redirecting fundraising dollars or increasing member or service fees. Furthermore, not-for-profits and charities that administer programs in multiple locations will be able to calculate their tax rate, or eligibility for exemption, based on the payroll at each location, rather than their overall payroll.
Vantage Point thanks the provincial government for taking into consideration the impact this tax has on the not-for-profit sector in BC and for meeting with Vantage Point and other leaders from the sector to discuss potential mitigation measures. When the EHT was announced earlier this year, many not-for-profit organizations expressed concern that the tax would have a significant impact on their capacity to run programs and services. The notice posted in July demonstrates a measured approach to implementing the new tax without compromising the capacity of a vast number of BC’s most important community organizations.