Commonwealth Numbered Acts

INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 No. 87 of 1978 - SECT 79

79. (1) This section applies in respect of a participating State in relation
to each financial year in respect of which a tax is imposed by the law of the
State on incomes of residents of the State and in relation to each subsequent
year.

(2) The Commissioner shall, whenever requested to do so by the Treasurer in
relation to a period, being a financial year in relation to which this section
applies in respect of a participating State, or being a part of such a
financial year, calculate the net collections, in relation to that period, of
income tax imposed by the law of that State.

(3) For the purposes of sub-section (2), the net collections, in relation to a
period, of income tax imposed by the law of a State shall be taken to be the
difference between-

   (a)  the amount that would, in his opinion, be the net personal income tax
        collections for that period within the meaning of the
        States (Personal Income  Tax Sharing) Act 1976 if-

        (i)    that period were a year to which that Act applied; and

        (ii)   where the law of another State provided for the making of
               payments by that other State to the Commonwealth in partial
               discharge of the liability of residents of that other State for
               income tax in respect of the financial year in which that
               period occurred or any previous financial year-the law of that
               other State had not provided for the making of those payments;
               and

   (b)  the amount that would, in his opinion, have been the amount referred
        to in paragraph (a) if the law of the State had not imposed a tax on
        the incomes of residents of the State of the financial year in which
        that period occurred or any previous financial year.

(4) Where the Commissioner calculates under sub-section (2) the net
collections, in relation to a period, of income tax imposed by the law of a
State, there is payable to the State the amount so calculated after deducting
an amount agreed upon between the Treasurer and the Treasurer of the State,
being a deduction made to reimburse the Commonwealth the costs of
administering the State income tax law.

(5) In the case of a financial year in relation to which this section applies
in respect of a participating State other than New South Wales or Victoria,
the Commonwealth Grants Commission shall assess an amount to be paid to the
State by way of equalization assistance, being an amount estimated by that
Commission to be the amount that would bring the per capita yield from the
income tax imposed by the law of that State in respect of that financial year
up to the amount which, if the laws of New South Wales and Victoria imposed
taxes on incomes of residents of those States in respect of that financial
year at the rate at which tax was imposed by the law of the first-mentioned
State, would be the average per capita yield from those taxes.

(6) The Treasurer may make advances to a State of portions of any amount or
amounts to which it appears to him the State will be entitled under this
section in respect of a financial year.

(7) Payments (including advances) under this section shall be made out of the
Consolidated Revenue Fund, which is appropriated accordingly.