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Limited “tool tax” relief…

Limited “tool tax” relief for technicians announced by Ottawa

December 10, 2001 was budget day in Ottawa, and apprentice automotive technicians are among the few for whom there’s good news. Finance Minister Paul Martin formally announced limited tax relief for apprentices during the Budget Speech before the House of Commons. The amount of the deduction will be the total cost of new tools acquired in a taxation year, less the greater of $1000 and 5% of the individuals apprenticeship income for the year. This measure is expected to cost the Federal Government $10 million a year, and be available only to those employee apprentices who are registered in a provincial or territorial programs leading to certification as a vehicle mechanic.

In the example cited in the budget plan, an apprentice earning $25,000 a year who spends $5,000 on new tools would enjoy a deduction of $3750 ($5000-$1250, the greater of $1000 and five percent of $25,000) which would translate into a tax savings of $600.

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