{"id":"C2004A05336","name":"Commonwealth Places Windfall Tax (Collection) Act 1998","slug":"commonwealth-places-windfall-tax-collection-act-1998","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"25 of 1998","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":7821,"registerId":"commonwealth-C2004A05336-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Commonwealth Places Windfall Tax (Collection) Act 1998","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\ntitle: Cth Places Windfall Tax (Collection) 1998\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![](image.001.png)\n\n \n\n \n\n \n\n \n\nCommonwealth Places Windfall Tax (Collection) Act 1998\n\n \n\nNo. 25, 1998\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n![](image.002.png)\n\n \n\n \n\n \n\n \n\nCommonwealth Places Windfall Tax (Collection) Act 1998\n\n \n\nNo. 25, 1998\n\n \n\n \n\n \n\n \n\nAn Act relating to the imposition and collection of Commonwealth places windfall tax\n\n \n\n \n\n \n\nContents\n\nPart 1—Preliminary 1\n\n1 Short title..................................1\n\n2 Commencement..............................2\n\n3 This Act binds the Crown.........................2\n\n4 Definitions.................................2\n\n5 Administration...............................2\n\nPart 2—Liability 3\n\n6 Taxable amount..............................3\n\n7 Liability to windfall tax..........................3\n\nPart 3—Collection 4\n\n8 State must withhold windfall tax from taxable amounts.......4\n\n9 Taxpayer entitled to credit for amount deducted by State......4\n\nPart 4—Miscellaneous 6\n\n10 Annual report................................6\n\n11 Arrangements with States.........................6\n\n12 Commonwealth payments to States...................6\n\n13 Regulations.................................6\n\n \n\n![](image.003.png)\n\nCommonwealth Places Windfall Tax (Collection) Act 1998\n\nNo. 25, 1998\n\n \n\n \n\n \n\nAn Act relating to the imposition and collection of Commonwealth places windfall tax\n\n[Assented to 17 April 1998]\n\nThe Parliament of Australia enacts:\n\nPart 1—Preliminary\n\n \n\n1  Short title\n\n  This Act may be cited as the Commonwealth Places Windfall Tax (Collection) Act 1998.\n\n2  Commencement\n\n  This Act is taken to have commenced on 6 October 1997.\n\n3  This Act binds the Crown\n\n  This Act binds the Crown in each of its capacities.\n\n4  Definitions\n\n (1) In this Act, unless the contrary intention appears:\n\nCommissioner means the Commissioner of Taxation.\n\nliable to repay has the meaning given by subsection (2).\n\nState taxing law has the same meaning as in the Commonwealth Places (Mirror Taxes) Act 1998.\n\nwindfall tax means the tax payable under this Act.\n\n (2) For the purposes of this Act, a State is liable to repay an amount to a person if:\n\n (a) the State is liable to repay the amount to the person; or\n\n (b) the State is required or permitted to offset the amount against other amounts that are owing, or may become owing, to the State by the person; or\n\n (c) the State is required or permitted to apply the amount for the benefit of the person in any other way.\n\n5  Administration\n\n  The Commissioner has the general administration of this Act.\n\n\n\n\nPart 2—Liability\n\n \n\n6  Taxable amount\n\n (1) A taxable amount is any amount that meets all the following conditions:\n\n (a) a State is liable to repay the amount to a person (the taxpayer) because a State taxing law is wholly or partly invalid because of paragraph 52(i) of the Constitution;\n\n (b) the amount is by way of repayment of an amount paid under the State taxing law before 6 October 1997;\n\n (c) the amount is claimed by the taxpayer from the State, or a court orders the State to pay the amount to the taxpayer.\n\n (2) A taxable amount is reduced by deducting any part of it that a State would have been liable to repay even if the State taxing law were wholly valid.\n\nExample: An amount that is repayable solely because of an overpayment by the taxpayer would be deducted.\n\n7  Liability to windfall tax\n\n (1) The taxpayer in respect of a taxable amount is the person to whom the State was liable to repay the taxable amount.\n\nNote: Section 8 extinguishes the liability of the State to repay the taxable amount.\n\n (2) The person who is the taxpayer in respect of a taxable amount is liable to pay windfall tax on the taxable amount.\n\n\n\n\nPart 3—Collection\n\n \n\n8  State must withhold windfall tax from taxable amounts\n\nState must withhold windfall tax\n\n (1) A State that is liable to repay a taxable amount must not repay or otherwise apply the taxable amount without first having deducted the windfall tax on the taxable amount.\n\n (2) As soon as practicable after making a deduction under subsection (1), the State must notify the taxpayer in writing that the deduction was made.\n\n (3) An amount deducted under subsection (1) is payable by the State to the Commonwealth.\n\nState discharged from liability to account\n\n (4) When a State makes a deduction from a taxable amount under subsection (1) (or purportedly under subsection (1)), the State is discharged from any liability to pay or account for the amount deducted to any person other than the Commissioner.\n\n9  Taxpayer entitled to credit for amount deducted by State\n\n (1) When a State makes a deduction from a taxable amount under section 8 (or purportedly under section 8), the taxpayer is entitled to a credit equal to the amount deducted.\n\n (2) However, the taxpayer is not entitled to a credit for any amount purportedly deducted under section 8 in relation to an amount paid under a valid State taxing law.\n\n (3) The credit is a debt due to the taxpayer by the Commissioner on behalf of the Commonwealth.\n\n (4) The Commissioner may apply some or all of the credit against the taxpayer’s liability to windfall tax (whether or not that liability is in respect of the taxable amount that gives rise to the credit). The Commissioner must refund any amount not applied.\n\n\n\n\nPart 4—Miscellaneous\n\n \n\n10  Annual report\n\n  After the end of each financial year, the Commissioner must give a report to the Minister, for presentation to the Parliament, on the operation of this Act during the year.\n\n11  Arrangements with States\n\n (1) The Commissioner may make an arrangement with an appropriate officer or authority of a State about any matter in connection with the administration of this Act.\n\n (2) In particular, an arrangement may relate to the Commissioner’s delegation of powers or functions under this Act or the regulations.\n\nNote: Section 8 of the Taxation Administration Act 1953 contains the Commissioner’s delegation power.\n\n12  Commonwealth payments to States\n\n (1) Whenever a State becomes liable to make a payment to the Commonwealth under section 8, the Commonwealth is liable to pay an equal amount to the State.\n\n (2) Amounts payable by the Commonwealth under subsection (1) are to be reduced by amounts that the Commissioner is liable to refund under subsection 9(4).\n\n (3) The Consolidated Revenue Fund is appropriated for the purposes of this section.\n\n13  Regulations\n\n (1) The Governor‑General may make regulations prescribing matters:\n\n (a) required or permitted by this Act to be prescribed; or\n\n (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.\n\n (2) In particular, the regulations may prescribe penalties for offences against the regulations by way of fines of up to 10 penalty units.\n\n \n\n \n\n[Minister's second reading speech made in—\n\nHouse of Representatives on 5 March 1998\n\nSenate on 23 March 1998]\n\n \n\n(14/98)\n\n\n \n\n \n\n \n","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"The Act, as drafted, limits scope to repayments made because a State taxing law is invalid under paragraph 52(i) of the Constitution and to amounts claimed or ordered (s 6). It is retroactive to 6 October 1997 (s 2), but the text itself does not indicate any alteration of that substantive scope from an earlier provision; the mechanics for withholding, crediting and Commonwealth reimbursement define how that scope is collected and administered (ss 8–12)."},"complexity_factors":["Cross‑jurisdictional collection mechanism: States must withhold and remit tax to the Commonwealth (s 8), while the Commonwealth reimburses States (s 12) — coordination and cash‑flow issues increase complexity.","Substantive trigger depends on constitutional invalidity: taxable amounts arise only where a State taxing law is wholly or partly invalid under paragraph 52(i) of the Constitution (s 6(a)), requiring legal determinations.","Definition and calculation of taxable amount: reductions where part of the amount would have been repayable even if the law were valid (s 6(2)) create valuation and measurement tasks.","Credit/debt mechanics and offsets: taxpayers receive a credit (s 9(1)–(4)) that is a Commonwealth debt but may be applied against liabilities and refunded, giving the Commissioner discretion in application (s 9(4)).","Retroactive commencement: Act is taken to have commenced on 6 October 1997 (s 2), creating retrospective effect for earlier repayments and potential timing disputes.","Administrative delegation and reporting: Commissioner administers the Act (s 5), may make arrangements with States (s 11) and must report annually (s 10), adding procedural layers.","Crown‑binding and discharge of State liabilities: the Act binds the Crown (s 3) and discharges States from further liability once they deduct (s 8(4)), which affects legal remedies and enforcement.","Regulatory and penalty powers: regulations may prescribe further matters and fine penalties (s 13(1)–(2)), creating potential compliance obligations beyond the Act’s text."],"plain_english_summary":"This law makes people who receive repayments from a State because a State taxing law was held invalid under paragraph 52(i) of the Constitution liable for a Commonwealth “windfall tax” on that repayment. States must deduct the tax before paying and remit it to the Commonwealth; recipients receive a credit administered by the Commissioner, and the Commonwealth pays States an equal amount (subject to certain offsets). It applies to repayments claimed or ordered, including those before 6 October 1997."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The legislation remains tightly focused on its original purpose: collecting tax on refunds of State taxes that were invalid due to the Commonwealth places constitutional limitation. The scope has not expanded beyond this specific fiscal mechanism."},"complexity_factors":["Short statute: only 13 sections across 4 Parts","Minimal defined terms: only 4 definitions in section 4 (Commissioner, liable to repay, State taxing law, windfall tax)","Simple conditional structure: single main trigger (State liable to repay due to constitutional invalidity)","Limited cross-references: only references to the Constitution (paragraph 52(i)), the Commonwealth Places (Mirror Taxes) Act 1998, and the Taxation Administration Act 1953","Straightforward collection mechanism: State withholds → State pays Commonwealth → Commonwealth pays State back → Taxpayer gets credit","No nested exceptions: only one simple exception in section 9(2) regarding valid State taxing laws"],"plain_english_summary":"**What this law does:**\n\nThis Act creates a special tax called the \"Commonwealth places windfall tax\" that applies when a State government has to refund money to someone because a State tax law was invalid.\n\n**The background:**\nUnder the Australian Constitution (specifically paragraph 52(i)), States generally cannot tax property owned by the Commonwealth. Sometimes State tax laws are found to be invalid because they accidentally tried to tax Commonwealth property (called \"Commonwealth places\"). When this happens, States must refund the tax money they wrongly collected.\n\n**What the tax does:**\nWhen a State has to refund this money, this Act imposes a tax on that refund. The State must **withhold** (deduct) the tax from the refund before paying it to the taxpayer. The taxpayer then gets a **credit** (like a pre-payment) for the amount withheld, which they can use against their final tax bill.\n\n**Who it affects:**\n- **Taxpayers:** People or businesses receiving refunds from States because of invalid State tax laws affecting Commonwealth places\n- **State governments:** They must withhold the tax from refunds and pay it to the Commonwealth\n- **The Commissioner of Taxation:** Administers the system and handles the credits\n\n**Why it matters:**\nThis prevents a \"windfall\" situation where taxpayers would get back 100% of invalidly collected State taxes without any Commonwealth tax applying. It ensures that when State taxes are struck down for constitutional reasons, the Commonwealth still collects equivalent revenue through this substitute tax. The system is designed to be revenue-neutral for States—they get back from the Commonwealth whatever they withhold from taxpayers."}},"importantCases":[],"_links":{"self":"/api/acts/commonwealth-places-windfall-tax-collection-act-1998","history":"/api/acts/commonwealth-places-windfall-tax-collection-act-1998/history","analysis":"/api/acts/commonwealth-places-windfall-tax-collection-act-1998/analysis","conflicts":"/api/acts/commonwealth-places-windfall-tax-collection-act-1998/conflicts","importantCases":"/api/acts/commonwealth-places-windfall-tax-collection-act-1998/important-cases","documents":"/api/acts/commonwealth-places-windfall-tax-collection-act-1998/documents"}}