It’s tax season and I thought this might be a good time to answer one of the questions I am asked most frequently in relation to Hutterites. Do Hutterites pay taxes? To the great surprize of no one the answer is a resounding yes!
Hutterites are taxed under section 143 of the Income Tax Act. Colonies are taxed as if they were a trust so the collective income of the community gets allocated to colony members who are 18 years of age and older. The income allotted to these individuals gets reported on personal income tax returns and these colony members pay taxes at the applicable personal tax rates.
Of course no one on a Hutterite colony actually gets paid for their labour. The principle of community life is that all your needs such clothing, food, shelter etc. are provided for “from the cradle to the grave.” Individuals don’t have bank accounts or funds at their disposal. Instead, the colony’s financial manager writes a cheque on behalf of these colony members to pay for their so-called “personal taxes.” In this way, Hutterites are able to preserve their unique way of life.
But, it comes with clear disadvantages.
Section 143 does not allow Hutterite colonies to allocate income to community members under the age of 18 while other farmers are allowed to do so. For example, a regular farmer can pay his child who is under the age of 18 up to $ 10,000 tax free, while Hutterites cannot. This is a clear disadvantage for Hutterite communities where both male and female young people are swept into the adult workforce at age 15.
It wasn’t until 1997 that colonies were allowed to allocate income to their spouses while other farmers have had that ability for many years. Nor do they collect premiums from the Canada Pension Plan or receive social assistance.
Hutterites contribute an impressive 2 billion dollars to the annual economy of Canada. Do they pay taxes? Yes! Arguably, more than their fair share.
* special thanks to Paul Wipf of Viking Colony for his kind help with this article.
Mary-Ann Kirkby is a Hutterite Author and Professional Speaker. Her award-winning books, Secrets of a Hutterite Kitchen, and I Am Hutterite, are available in book stores and at www.polkadotpress.ca. Contact Mary-Ann at email@example.com
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