GST and FARMLAND

The GST ( goods and services tax ) is a tax put in place by the Federal Government at a present day rate of 5% in British Columbia. Although it does not apply to used residential housing it does apply to most lot purchases, an sort of applies to commercial property and farms purchases. When I say it sort of applies, there is a system in place where the tax calculation is made and accounted for but no money changes hands. Totally confused? Here's how it works. The seller is required to collect it and the buyer is required to pay it. If the buyer/farmer registers as a GST registrant and gets a GST filing number, he would be intitled to an instant rebate of the tax. Farmers are then required to collect GST on some products they sell (not food) and are entitled to input tax credits on farm related purchases. As an example farmers can claim an input tax credit of farm related purchases like fuel, hydro and equipment used for production purposes. They also charge GST and remit to the government on all non food sales from the farm. This all requires reporting on a monthly, quarterly on annual basis based on gross sales.  Most small scale farming operations would report annually. Make sure you know what the GST status is when you are buying so you can avoid surprises. If you aren't already bored you can visit the governmnet website at www.cra-arc.gc.ca/gsthst