The Government of Canada is offering tax deferrals to an expanded list of municipalities for livestock producers struggling due to drought.
“Our Government continues to assess the affects a cool, dry spring and summer in some parts of Alberta and, as a result we have designated more areas for tax exemption on livestock sales,” Minister of National Revenue and Minister of State (Agriculture) Jean-Pierre Blackburn said in a release.
The tax deferral allows eligible producers in designated areas to defer income tax on the sale of breeding livestock for one year to help replenish breeding stock in the following year. In the case of consecutive years of drought designation, producers may defer sales income to the first year in which the area is no longer designated.
Producers who reduced their breeding herds by at least 15 per cent are eligible. 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.
Eligible producers will be able to request this deferral when filing their 2009 income tax returns. Livestock producers are advised to contact their local Canada Revenue Agency Tax Services Office for details on the income tax provisions.
While forage yield information is not available until later in the year, designations can be made earlier in the year based primarily on spring moisture conditions and estimates of forage yield. Early designation of eligible areas will allow producers to make informed decisions about fall and winter livestock management decisions.
The release said ssessment of the drought situation will continue throughout the fall and, as more data about forage yields are known, tax deferral areas could be expanded.