Income tax deferrals are on tap for ranchers in any of four Manitoba rural municipalities who had to sell breeding livestock due to excess moisture during the 2009 tax year.
Much like the program for drought-designated municipalities, ranchers in municipalities designated by the federal government can defer a portion of tax owing on income from breeding stock sold due to excess moisture in 2009, the government announced Wednesday.
The Manitoba RMs designated so far are Bifrost, Gimli, Armstrong and Fisher, the government said.
The tax deferral allows eligible producers in designated areas to defer income tax, in order to help them replenish breeding stock in the following year. In the case of consecutive years of designation, producers can defer sales income to the first year in which the area is no longer designated.
To be eligible, a producer needs to have reduced his or her breeding herd by at least 15 per cent. Thirty per cent of income from net sales can be deferred if the herd has been reduced by at least 15 per cent, but less than 30 per cent
Where the herd has been reduced by 30 per cent or more, 90 per cent of income from net sales can be deferred.
Forage yield data isn’t available until later in the year but these designations can be made earlier in the year, based primarily on spring moisture conditions and estimates of forage yield, the government said.
With an earlier designation of eligible areas in place, producers can make “informed decisions” about fall and winter livestock management, the government said Wednesday. More areas may also be designated as the crop year continues.
“We’re pleased to see the government announce the tax deferral at this point in the year, rather than later,” said Ian Wishart, president of Manitoba’s general farm organization, Keystone Agricultural Producers, in a release Wednesday.
KAP said it lobbied the federal and provincial governments for months in 2008 and 2009 to expand the tax deferral to include excess moisture situations, where the deferrals previously were only to be used for producers affected by drought.
“The expanded deferral is proving to be valuable because it gives livestock producers another option to consider when they’re making decisions about their winter feed supplies,” said Wishart, who farms at Portage la Prairie.
Eligible producers can request the deferral when filing their 2009 income tax returns, and are advised to contact their local Canada Revenue Agency tax services offices for details.
The Interlake, the region of central Manitoba between Lakes Manitoba and Winnipeg, took on excessive moisture from the fall of 2008 and got higher-than-normal precipitation throughout the spring, the government noted. This has left ranchers and hay producers unable to reseed forages or cut available forage crops.