The federal government has posted its initial list of communities in which livestock producers will be eligible to defer 2008 income tax owing on sales of breeding stock due to drought.
The government has so far designated 23 rural municipalities (RMs) in southern Saskatchewan, three northern Alberta counties and the Peace River Regional District in British Columbia as eligible for the deferral.
“Producers will be able to use these savings when they rebuild their herds in the spring,” federal Agriculture Minister Gerry Ritz said in three separate press releases Friday.
The deferrals were granted after forage yield, precipitation, soil moisture and water supply data were reviewed for the 2008 growing season, and provides a management option to breeding livestock owners.
Eligible Saskatchewan RMs include Auvergne, Bengough, Excel, Glen Bain, Glen McPherson, Grassy Creek, Gravelbourg, Happy Valley, Hart Butte, Lake of the Rivers, Lone Tree, Mankota, Old Post, Poplar Valley, Pinto Creek, Stonehenge, Surprise Valley, Sutton, Val Marie, Waverley, Willow Bunch, Wise Creek and Wood River.
Nearly all of the eligible Saskatchewan municipalities were previously designated for the 2007 tax year as well. A producer whose area is designated in consecutive years can defer sales income ahead to the first year in which his or her area is no longer designated.
Eligible Alberta counties for the 2008 tax year include Grande Prairie No. 1, Saddle Hills and Clear Hills.
Owners of breeding livestock in the designated areas who were forced to sell all or at least 15 per cent of their herds in 2008 due to drought conditions are eligible for the deferral as a management option.
When filing his or her 2008 tax return, an eligible producer can request the deferral on income tax owing on 30 per cent of income from net sales, if his or her herd has been reduced by at least 15 per cent, but by 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.