Incorporated businesses in Nova Scotia pay about $500 million in provincial taxes, a fraction of the $3.5 billion levied by the province on households. However, corporate taxation is particularly important because business decisions about investment and production determine the economic climate that supports jobs and wages earned by households.
As with households, it is important to look at the tax burden by size of taxpayer.
For businesses, gross revenue from Nova Scotia operations is a good indicator of firm size. Tax planning decisions can distort other size measures, such as taxable income, salaries and wages, capitalization, and asset values. Note that revenues are not the same as profits: high revenue companies can have low margins and vice versa.
The figure below divides Nova Scotia’s 32,000 incorporated companies into six categories of gross revenue and measures their provincial share of:
- Number of companies
- Gross corporate revenues from Nova Scotia operations
- Taxable income allocated to Nova Scotia
- Provincial taxes on corporate income and capital
- Salaries and wages paid by corporations
Note that this does not include ‘business’ taxation of unincorporated enterprises and partnerships that pay taxes through the personal income tax system. Nor does it include capital taxes levied specifically on certain financial institutions.
Nova Scotia Corporate Taxes by Company Size
(Click chart to enlarge)