This is final installment in a series about U.S. tax issues when selling grain in the U.S. State tax rules tend not to be an issue for Canadian producers, but it depends on each jurisdiction and the volume of business conducted. Each state has rules about who, what and how to tax activities in their […] Read more
Stories by Paul Hammerton & David Turchen
Permanent establishment designation may spark taxes
Selling grain to American buyers might earn Canadian farmers better profits, but it is important to structure the sale so that it cannot be considered a U.S.-sourced sale. If it is, the proceeds will be considered “effectively connected income” in the United States under U.S. tax law and taxable at graduated U.S. federal corporate rates […] Read more
Ensure contract states when title passes to U.S. buyer
Canadian farmers can sometimes find American buyers who are willing to pay more for their grain than Canadian companies. However, cross border sales could attract the unwelcome interest of the U.S. Internal Revenue Service if producers don’t have the proper contracts and paperwork. A key point that must be spelled out in the contract is […] Read more
Definition of a U.S.-sourced grain sale might surprise you
More Canadian farmers are investigating cross border grain sales in the post-CWB monopoly environment as they search for stronger prices. However, it is important that farmers know how taxation authorities look at cross border sales so they can avoid situations where the U.S. Internal Revenue Service thinks it has a claim on some of the […] Read more
New rules, new tax pitfalls on selling grain in the U.S.
This is part one of a five-part series on avoiding unnecessary U.S. taxes. The United States has be-come an attractive outlet for direct grain sales by many Canadian producers since the dissolution of the Canadian Wheat Board’s single desk trading monopoly. U.S.-based grain traders are soliciting new business in Canada, and some are also investing […] Read more
