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The Rural Voice, 1992-01, Page 20Copper Base ROYALE BULBS made by PHILIPS Guaranteed 6000 hours Also Available •Energy Saving Lights •Heat Bulbs, etc. THE DUTCH STORE 519 482-7302 55 Albert St. CLINTON The DOWNIE Mutual fire Insurance Company HEAD OFFICE P.O. Box 10, Sebringville, Ont. NOK 1X0 393-6402 ALL LINES OF FARM AND URBAN INSURANCE For quotations contact: AGENTS: Ken Hutchison 273-2458 Doug Jacob 271-7894 Robert Ready 393-6965 R. Allan Fuller 271-6176 Serving the community for 107 years. Let us serve you in 1992. 16 THE RURAL VOICE SAVING ON TAXES In these times when farmers are fman- cially hard-pressed to make ends meet, they should be trying to take advantage of the numerous tax exemptions and tax refunds available to them in the Province of Ontario. Under the Retail Sales Tax Act of On- tario ("the Act"), every purchaser of per- sonal property in Ontario is required to pay to our provincial government, at the time of sale, a tax equal to eight per cent of the fair value of that property. Each purchas- er, therefore, pays eight per cent more for the goods unless he qualifies under an ex- emption permitting the purchaser to forego the payment of the retail sales tax portion. A farmer in Ontario may purchase — tax-exempt — goods or equipment re- quired to operate a farming business. Further, these same goods may be repaired exempt from tax. For the purposes of the Act, a person "engaged in the business of farming" means a person who farms with a reasonable expectation of profit. Farming can include the growing of food for human and animal consumption; tilling of the soil for the purposes of growing trees, seeds, plants, and flowers; raising livestock; breeding fur -bearing animals; and growing tobacco. In addition, someone who plants, cultivates, harvests, fertilizes or installs draining tiles exclusively for farmers may qualify as a farmer. Some exempt goods are obviously just for farming purposes, such as milking machines, farm wagons and threshing machines. However, there are other goods that, to obtain an exemption, a farmer must certify will be used for farming. For ex- ample, a farmer may purchase pesticides, tools and watering systems exempt from tax, upon signing a certificate that states he is using the goods for the business of farming. Farmers may purchase, totally exempt from tax, materials used to construct farm grain storage bins and grain dryers. At the time of making the purchase, the farmer must fill out and sigr an exemption certi- ficate, available from a Retail Sales Tax Branch of the Ministry of Revenue. Tax exemptions may also apply to fish farmers, green house operations, rabbit farmers and sod growers. There are some items upon which a farmer must pay sales tax, but which quali- fy for a tax refund. For example, a refund may be claimed for the tax paid on a vehi- cle that was not designed for farm use, but which was converted to farm use within 30 days from the date of purchase. As anoth- er example, a farmer must pay sales tax on lumber and other materials. However, the farmer may claim a refund if the material is used to build a tax-exempt item, such as a farm fence. In order to claim the sales tax refund, an application must be filled out and mailed to the Ministry of Revenue with supporting invoices and proof of purchase. It is important that the necessary documen- tation is forwarded to the Ministry immed- iately after purchase, so the refund can be delivered to the farmer on a timely basis. Delays in submitting the application and other documents may result in a serious cash crunch, particularly where numerous items attracting tax have been purchased. The availability of tax exemptions and refunds can provide welcome relief for the farmer. Fanners should be sure to investi- gate the tax status of the items they pur- chase, in order to determine whether an exemption or refund is available and take full advantage of their special status. Information and advice to assist farmers in planning their purchases can be obtained both from the Ministry of Revenue and professional advisors.) Agrilaw is a syndicated column produced by a full-service London law firm. Marlene McGrath, an associate lawyer, specializes in corporate and commercial law, wills and estate planning. Agrilaw is intended to provide information to farmers on subjects of interest and importance. The opinions expressed are not intended as legal advice. Before acting on any information contained in Agrilaw, readers should obtain legal advice with respect to their own particular circumstances.