PROVINCIAL TAXATION OF PAID-UP CAPITAL OF FOREIGN CORPORATIONS

Abstract

In this article the author discusses provincial legislation levying taxes with reference to the paid-up capital of foreign corporations. Although four distinct requirements must be satisfied in order for such legislation to be constitutional, the author focuses on the constitutional requirement that the subject of the tax must be found within the province. First, the author demonstrates that the case of Bank of Toronto v. Lambe decides nothing as to the location of paid-up capital when it is taxed. The author then examines the Ontario Corporations Tax Act and suggests that it fails to meet the discussed constitutional requirement. In concluding his article, the author then briefly refers to a case where the location of paid-up capital is discussed, and looks to the future of provincial legislation taxing the paid-up capital of foreign corporations.