41 (1) There may be deducted from the tax otherwise payable under this Part by a corporation for a taxation year an amount equal to the percentage described in subsection (1.1) of the amount determined under subsection (2), if the corporation has made a deduction under section 125 of the Income Tax Act
(Canada) for the taxation year, or could have made a deduction under that section if its business limit for the taxation year under paragraph 125 (1) (c) of that Act had been determined without reference to subsection 125 (5.1) of that Act.  1996, c. 1, Sched. B, s. 5 (1); 1998, c. 5, s. 10 (1); 2004, c. 16, s. 2 (2). Same (1.1) Subject to subsections (1.2) to (1.4), the percentage referred to in subsection (1) is, (a) 6 per cent, in respect of a taxation year that ends after June 30, 1994 and before May 5, 1998; (b) 6.5 per cent, in respect of a taxation year that ends after May 4, 1998 and before January 1, 1999; (c) 7 per cent, in respect of a taxation year that ends after December 31, 1998 and before January 1, 2000; (d) 7.5 per cent, in respect of a taxation year that ends after December 31, 1999 and before October 1, 2001; (e) 6.5 per cent, in respect of a taxation year that ends after September 30, 2001 and before January 1, 2003; (f) 7 per cent, in respect of a taxation year that ends after December 31, 2002 and before January 1, 2004; (g) 8.5 per cent, in respect of a taxation year that ends after December 31, 2003. (h)  Repealed:  2003, c. 7, s. 3 (1). (i)  Repealed:  2003, c. 7, s. 3 (2). (j)  Repealed:  2000, c. 10, s. 4 (1). 1998, c. 5, s. 10 (2); 2000, c. 10, s. 4 (1); 2001, c. 8, s. 21 (1); 2001, c. 23, s. 32 (1-3); 2002, c. 22, s. 42 (1, 2); 2003, c. 7, s. 3 (1, 2); 2004, c. 16, s. 2 (2). Same, 1998 (1.2) Despite clause (1.1) (b), if the taxation year begins before May 5, 1998, the increase from 6 per cent to 6.5 per cent shall be prorated according to the number of days in the taxation year that are after May 4, 1998.  1998, c. 5, s. 10 (2); 2004, c. 16, s. 2 (2). Same, 1999 (1.3) Despite clause (1.1) (c), (a) if the taxation year begins before May 5, 1998, the reference to 7 per cent in clause (c) shall be read as the percentage equal to the total of, (i) 6 per cent multiplied by the ratio of the number of days in the taxation year that are before May 5, 1998 to the total number of days in the taxation year, (ii) 6.5 per cent multiplied by the ratio of the number of days in the taxation year that are after May 4, 1998 and before January 1, 1999 to the total number of days in the taxation year, and (iii) 7 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 1998 and before January 1, 2000 to the total number of days in the taxation year; and (b) if the taxation year begins after May 4, 1998 and before January 1, 1999, the increase from 6.5 per cent to 7 per cent shall be prorated according to the number of days in the taxation year that are after December 31, 1998 and before January 1, 2000.  1998, c. 5, s. 10 (2); 2004, c. 16, s. 2 (2). Same, 2000 and later (1.4) Despite clauses (1.1) (d) to (g), if the taxation year begins on or before the particular September 30 or December 31 indicated in clause (d), (e), (f) or (g), the change in the percentage from the percentage set out in the preceding clause to the percentage set out in the applicable clause must be prorated according to the number of days in the taxation year that are after the particular September 30 or December 31, as the case may be.  2003, c. 7, s. 3 (3); 2004, c. 16, s. 2 (2). Same (2) For the purpose of subsection (1), the amount determined under this subsection is the amount calculated using the formula, A × B in which, “A” is the least of the amounts determined under paragraphs 125 (1) (a), (b) and (c) of the Income Tax Act
(Canada) for the taxation year and not exceeding the total of the amounts described in clauses (3.2) (a) to (f), and “B” is the Ontario small business allocation factor for the taxation year. 2000, c. 10, s. 4 (3); 2003, c. 7, s. 3 (4); 2004, c. 16, s. 2 (2); 2009, c. 18, Sched. 9, s. 1. Adjustment to taxable income (3) For the purposes of determining the amount of any deduction for a taxation year under subsection 41 (1), 42 (1) or 43 (1) from the tax otherwise payable under this Part, the amount of the corporation’s taxable income for the year for the purposes of paragraph 125 (1) (b) of the Income Tax Act
(Canada) shall be deemed, for the purposes of the application of that paragraph to subsections 41 (2), 42 (2) and 43 (2), to be, (a) the aggregate of, (i) the amount of the corporation’s taxable income for the year for the purposes of the Income Tax Act
(Canada), and (ii) the amount of losses deducted under section 111 of the Income Tax Act (Canada) by the corporation in the computation of its taxable income for the year for the purposes of that Act, minus, (b) the amount of losses deducted by the corporation under section 111 of the Income Tax Act (Canada), as made applicable by subsection 34 (1), or deemed to have been deducted by subsection 34 (5), in the computation of its taxable income for the year for the purposes of this Act.  R.S.O. 1990, c. C.40, s. 41 (3); 2004, c. 16, s. 2 (2). Business limit (3.1) For the purposes of this section and subsection 43 (4), the amount of the corporation’s business limit for the taxation year under paragraph 125 (1) (c) of the Income Tax Act
(Canada) shall be determined without reference to subsection 125 (5.1) of that Act.  2004, c. 31, Sched. 9, s. 15 (1). Application of certain federal provisions (3.2) In applying subsections 125 (2) and (3) of the Income Tax Act (Canada) to determine a corporation’s business limit under paragraph 125 (1) (c) of that Act for the purposes of this section and subsection 43 (4) for a taxation year, the dollar amount set out in subsections 125 (2) and (3) of the Income Tax Act (Canada) shall be read as a reference to the total of, (a) $200,000 multiplied by the ratio of the number of days in the taxation year that are before January 1, 2001 to the total number of days in the taxation year; (b) $240,000 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2000 and before October 1, 2001 to the total number of days in the taxation year; (c) $280,000 multiplied by the ratio of the number of days in the taxation year that are after September 30, 2001 and before January 1, 2003 to the total number of days in the taxation year; (d) $320,000 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2002 and before January 1, 2004 to the total number of days in the taxation year; (e) $400,000 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2003 and before January 1, 2007 to the total number of days in the taxation year; and (f) $500,000 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2006 and before January 1, 2009 to the total number of days in the taxation year.  2003, c. 7, s. 3 (5); 2004, c. 16, s. 2 (2); 2004, c. 31, Sched. 9, s. 15 (2); 2008, c. 7, Sched. E, s. 2. Ontario small business allocation factor (4) For the purposes of this section, the Ontario small business allocation factor for the taxation year is the ratio of “A” to “B” where, “A” is the amount of that portion of the corporation’s taxable income for the taxation year that is determined to have been earned in Ontario under the rules referred to in the definition of “taxable income earned in the year in a province” in subsection 124 (4) of the Income Tax Act (Canada), and “B” is the total amount of the portions of the corporation’s taxable income for the taxation year that are determined to have been earned in provinces of Canada, under the rules referred to in the definition of “taxable income earned in the year in a province” in subsection 124 (4) of the Income Tax Act (Canada).  2004, c. 31, Sched. 9, s. 15 (3). Definition (5) In this section and section 42, “tax otherwise payable under this Part” means the tax for the taxation year otherwise payable by the corporation under this Part after making any deduction applicable under sections 39 and 40, but before making any deduction under this section or section 42, whichever is applicable, or section 43.  R.S.O. 1990, c. C.40, s. 41 (5); 2004, c. 16, s. 2 (2). Specified partnership income (6) In applying subparagraph 125 (1) (a) (ii) of the Income Tax Act (Canada) for the purposes of this section for a taxation year ending after May 1, 2000, the reference to “specified partnership income” in that subparagraph shall be read as a reference to the amount that would be determined under the definition of “specified partnership income” in subsection 125 (7) of that Act in respect of a partnership if the variable “M” in that definition were the amount equal to the lesser of, (a) the amount determined under subsection (3.2); and (b) the amount determined under subsection (7).  2002, c. 22, s. 42 (4); 2004, c. 16, s. 2 (2). Same (7) For the purposes of clause (6) (b), the amount is determined using the formula, ( B/365 ) × C in which, “B” is the amount determined under subsection (3.2), and “C” is the total of all amounts each of which is the number of days contained in a fiscal period of the partnership ending in the year. 2002, c. 22, s. 42 (4); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1994, c. 14, s. 14 (1, 2) - 01/05/1992; 1996, c. 1, Sched. B, s. 5 (1, 2) - 01/07/1994; 1998, c. 5, s. 10 (1, 2) - 05/05/1998 2000, c. 10, s. 4 (1-4)
- 02/05/2000 2001, c. 8, s. 21 (1) - 01/01/2002; 2001, c. 8, s. 21 (2, 3) - no effect - see 2001, c. 23, s. 32 (5, 8) - 01/10/2001; 2001, c. 23, s. 32 (1-8)
- 01/10/2001 2002, c. 22, s. 42 (1-3)
- 09/12/2002; 2002, c. 22, s. 42 (4)
- 02/05/2000 2003, c. 7, s. 3 (1-4)
- 01/01/2004; 2003, c. 7, s. 3 (5)
- 01/01/2003 2004, c. 16, s. 2 (2)
- 01/01/2004; 2004, c. 31, Sched. 9, s. 15 (1, 3) - 16/12/2004; 2004, c. 31, Sched. 9, s. 15 (2) - 01/01/2003 2008, c. 7, Sched. E, s. 2 - 01/01/2007 2009, c. 18, Sched. 9, s. 1 - 01/01/2007