The booming e-book industry is causing complications for book publishers worldwide. Ontario book publishing companies are receiving some support in the form of the Ontario Book Publishing Tax Credit (OBPTC). Through this tax incentive program, book publishers are able to receive tax credits on expenditures throughout their operations, from pre-press to digital and paper publications to marketing expenses.
Ontario Tax Incentive Eligibility
Ontario-based book publishing corporations must publish at least two books the year before applying for OBPTC. Also, the corporation must allocate >50% of its taxable income to Ontario throughout the taxation year that the credit is being claimed. The following criteria must be followed for literature to be classified as an eligible published book:
- Written by an eligible Canadian author, or if it is written by more than one author, at least 90% of the material is written by eligible Canadian authors;
- 90% or more of the literary work is new material that has not been previously published;
- Belongs to an eligible category of writing;
- If it contains pictures, the ratio of the amount of text to pictures is at least 65 % (except in the case of children’s books);
- At least 48 printed pages in length (except in the case of children’s books) and is bound as a paperback, or a hardback, or if it is published after March 26, 2009, as a digital or electronic version of the literary work; and
- Not a prescribed ineligible publication.
Eligible authors are either a Canadian citizen or a permanent resident in Canada, their literary work is published before March 27, 2009, and has not written more than two previously published literary devices of the same category of writing.
Ontario Tax Credit Amount
OBPTC can be claimed on 30% of eligible Ontario expenditures up to a maximum of $30,000 per book title. Expenses may be related to pre-press activities, printing, and marketing expenditures related to the literary work. 100% of costs relating to preparing the book for publication in either print or electronic formats and 50% of production and distribution costs (printed versions only) are deemed eligible expenses.
Apply for Ontario Book Publishing Tax Credit Today
To learn more about the OBPTC, please visit the Ontario Media Development Corporation (OMDC) Website or contact Mentor Works. When you are ready to begin, please review the OBPTC Guidelines and create an account on the OMDC Online Application Portal to start the application process.