Ontario offers tax update for its farmers
July 2, 2010 By Ontario Ministry of Agriculture Food and Rural Affairs
July 2, 2010, Toronto, Ont. –
Ontario's tax plan will help
farmers, rural communities and agri-businesses save money, become more
competitive in international markets and create jobs.
July 2, 2010, Toronto, Ont. – Ontario's tax plan will help farmers, rural communities and agri-businesses save money, become more competitive in international markets and create jobs.
By modernizing an outdated, 50-year-old tax system, the province is cutting taxes for families and businesses and combining two existing sales taxes into one – the Harmonized Sales Tax (HST). It puts Ontario farmers on a level playing field with four other provinces.
Starting July 1, farmers and many agri-businesses can expect to save $15 million annually from reductions in Corporate Income Tax (CIT). Their tax rate will drop from 12 to 10 per cent on farming income.
Farmers will also now be exempt from the Retail Sales Tax (RST) on business purchases such as trucks, industrial freezers and computers. Previously, they were only exempt from the federal government sales tax. This means farmers will be able to claim a 13 per cent rebate under the HST. This translates into an estimated savings of $30 million each year for farmers, rural communities and agri-businesses, or an average of $600 per farm.
These savings will allow farmers to sell more products, focus on new farming innovations, and buy new equipment and create new jobs.
Ontario's tax changes are part of the five-year Open Ontario plan to create jobs, grow the economy and build a stronger Ontario. It is estimated that these changes will help create almost 600,000 new, good jobs within the next 10 years.
AT A GLANCE
- Cash receipts from farming operations in Ontario were valued at $10.2 billion in 2008.
- In terms of farm cash receipts, Ontario's agriculture industry ranks first among all provinces.
- Investment in farming equipment and machinery in Atlantic Canada jumped 12 per cent following the implementation of the HST.
- The small business CIT rate will fall to 4.5 per cent, from 5.5 per cent.
- Capital Tax was eliminated for farmers on January 1, 2007.
TO LEARN MORE
- Take a longer look at how HST would benefit the agricultural sector.
- Discover more facts about HST and Ontario's new tax plan.
- Find more information about the gains for business under HST.
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