Nova Scotia, federal government lock horns over $40M lottery terminal tax

Nova Scotia, federal government lock horns over $40M lottery terminal tax

Nova Scotia is at loggerheads with Canada’s federal government after the former contested the supposed CAD53.4 million (US$40 million) it owed in connection with First Nations video lottery terminal revenue.

Nova Scotia, federal government lock horns over $40M lottery terminal taxCBC News reported that Nova Scotia filed an appeal before a Canadian tax court challenging the move of the Canada Revenue Agency (CRA) to levy harmonized sales tax assessment on video lottery revenues from the province’s First Nations.

The appeal is also intended to recover a total of CAD53.4 million it reluctantly paid should Nova Scotia lose the case against the CRA.

Records showed that the province made the initial payment of CAD29.6 million ($23.68 million) in 2013 and another CAD23.8 million ($19.04 million) in monthly remittances pending the outcome of its tax court appeal

“Anything that impacts on the revenues of the province in one way or the other is a big deal,” Nova Scotia Finance Minister Karen Casey said, according to the report. “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?”

It was estimated that Nova Scotia has more than 500 VLTs that generate revenue of around CAD40 million ($31.99 million) a year.

Atlantic Lottery Corporation (ALC) is responsible for supplying and maintaining the VLTs and at the same time collects a rental fee from the tribes. The revenues that VLTs generate goes to the tribes.

In its appeal, Nova Scotia argued that its agent ALC simply rented or leased VLTs to the bands’ respective gaming commission.

The province denied that it accepted bets in relation to the games of chance of VLTs on reserves.

CRA, for its part, insisted that revenue generated from authorized VLTs belong to the province. In its reply last month, the federal attorney general argued that Nova Scotia “stood to win or lose from bets placed in the authorized VLTs.”

The ALC, the Assembly of Nova Scotia Mi’kmaq Chiefs, and the Nova Scotia Provincial Lotteries and Casino Corporation all declined to comment.