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Conservation tillage refundable tax offset

1st July 2012

 By BMO Associate Partner David Briese.

As part of the recently introduced carbon tax legislation, a Carbon Farming Futures program will be started with $429 million to be spent in the first six years.

Carbon Farming Futures will support research, measurement approaches and action on the ground to reduce emissions or store carbon, including support for conservation tillage equipment.

So what does this mean:

• A Refundable Tax Offset (RTO) will apply to eligible “no-till” machinery purchases from the 1st July 2012 to the 30 June 2015. .i.e. the 2012-13, 2013-14, 2014-15 income tax years.

• The machinery must be an eligible no-till seeder and can be any of the following:

1. Tine machines fitted with minimum tillage points designed to achieve minimum soil disturbance and less than full cut-out.
Minimum tillage points designed to achieve minimum soil disturbance and less than full cut-out include narrow points, knife points or inverted 'T' points.

2. Disk openers with a single, double or triple disc arrangement.

3. Disc/tine or disc/blade hybrid machine.

• The seeder must be new, i.e. not previously used by anyone.

• The entity buying the seeder must use it in a primary production business.

Give us a call and we will help you find out if you are eligible to receive this incentive.

See the full factsheet here>

Common Questions and Answers:

1. If I buy the machine in two parts (eg. Air seeder cart and the ground engaging tool bar) and assemble it will it still be eligible? 
    Yes, the combination of these two components will be eligible - see s 385-235.

2. Is there a $ limit on claims? 
    The offset can be claimed for more than one asset provided each asset meets the eligibility criteria – see s 235-175 and 385-235.

3. If I buy a no-till seeder now can I claim it in the 2013 financial year? 
    Yes, if you first use the seeder or have the seeder installed and ready for use after 1 July 2012.

4. If I already have an air seeder cart and just want to replace the toolbar can I claim the tax offset? 
    Yes, In a press release on 29 June 2012, the Assistant Treasurer announced that the government would "ensure that primary producers who  purchase just the tool will be able to access the offset".

5. Is the 15% offset calculated on the full cost of the new machine or on the net cost after accounting for a trade-in? 
    15% RTO is calculated on the full cost of the new machine/s.

6. If I buy a spray rig is it eligible for the new offset? 
    No, the legislation specifically refers to eligible no-till seeders only as defined in s 385-235 of the legislation.

7. Where can you access the form to apply for the Research participation certificate? 
   

The form is now available in an online format>

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