A 15% refundable tax offset is available for the purchase of new conservation seeding equipment.
Primary producers are now able to participate in research and apply for a 15 per cent refundable tax offset (RTO) on the purchase of new conservation seeding equipment. The equipment needs to be installed and ready for use between 1 July 2012 and 30 June 2015.
This initiative is designed to encourage conservation agricultural practices to reduce greenhouse gas emissions, increase soil carbon and maintain productivity. The RTO is part of the Carbon Farming Futures Program under the Australian Government’s Securing a Clean Energy Future plan.
This refundable tax offset is only available for eligible seeders installed ready for use between 1 July 2012 and 30 June 2015. From 1 July 2015, the refundable tax offset will be repealed.
To be eligible you need to:
- hold the eligible seeder
- start to use, or install ready for use the eligible seeder in the course of carrying on a primary production business (the eligible seeder must not have been used previously, including by someone else)
- have a Research participation certificate from the Department of Agriculture, Fisheries and Forestry (DAFF).
The refundable tax offset can be claimed in your tax return for the relevant year (2012-13, 2013-14 or 2014-15).
An eligible seeder is a no-till seeder (made up of both a cart and tool) that is any of the following:
- A tine machine fitted with minimum tillage points to achieve minimum soil disturbance and less than full cut-out (for example, narrow points, knife points or inverted ‘T’ points).
- A disc opener with single, double or triple disc blades designed to achieve minimum soil disturbance and less than full cut-out.
- A disc/tine hybrid machine with single, double or triple arrangements fitted with minimum tillage points to achieve minimum soil disturbance (for example, narrow points, knife points or inverted ‘T’ points).
- A disc/blade hybrid machine with single, double or triple arrangements fitted with blades to achieve minimum soil disturbance and less than full cut-out.
What do I need to do to claim the offset?
- Purchase and install a new, eligible conservation tillage seeder
- Fill out an application form
- Receive your Research Participation Certificate
- Claim your offset in your tax return
The information collected in the application form (which includes a Conservation Tillage Survey) will be used to create a data set that may be used for further agricultural research. By applying for a Research Participation Certificate, producers agree that they may be approached by DAFF regarding additional research activities at a later time. However, a claim for the RTO is not conditional on being involved in any additional research activities. Subsequently declining to be involved in additional research activities will not lead to a requirement for the entity to pay back the amount received through the RTO.
Example 1: Purchase of cart and tool from one dealer
On 12 June 2012, Mike signed a purchase contract for an air seeder made up of an air cart and air drill that met the minimum tillage points requirement in the definition of an eligible seeder. It was delivered to his property and installed ready for use on 12 July 2012.
If Mike satisfies all other eligibility requirements (such as holding a Research participation certificate) for the refundable tax offset, Mike can claim the offset in his 2012-13 tax return.
If the seeder had been delivered and installed ready for use before 1 July 2012, Mike would not have been eligible to claim the offset.
Example 2: Purchase of cart and tool from two dealers
Jess looked into buying a no-till seeder and decided to buy a new air cart from one dealer and a new air drill from another dealer. Jess signed contracts with both dealers on 30 May 2013. The drill component that she purchased met the minimum tillage points requirement.
Her air cart arrived on 10 June 2013 but the air drill did not arrive until the following month on 15 July 2013. Jess set up her new eligible seeder and it was ready for use on 18 July 2013.
If Jess satisfied all other eligibility requirements she can claim the refundable tax offset when lodging her 2013-14 tax return.
Example 3a: Upgrading one part of a seeder
Tony has been using a no-till seeder for some years. He bought a new air drill that was delivered and installed ready for use on 15 August 2012.
An eligible seeder must be new and since the air cart had previously been installed and used, Tony is not eligible for the refundable tax offset. The purchase of the new air drill on its own does not qualify as an eligible seeder.
Example 3b: Further upgrade
Tony discovered he was not eligible to claim the refundable tax offset because he was using his old air cart with the new air drill. He decided to buy a new air cart. The new air cart was installed and ready for use on 7 January 2013.
Although Tony acquired a new air cart and a new air drill within the same income year, both components must not have been used previously in order to be eligible for the refundable tax offset. As Tony had been using the new air drill before purchasing the new air cart, he was not eligible to claim the refundable tax offset for either part.