Remitting Federal and State Checkoff Dollars FAQ
All selling and purchasing transactions must be reported to OBC. In each instance, the checkoff must be paid or a Non-Producer Status exemption form must be collected by the buyer from the seller. If you opt to claim an exemption, you swear that:
- your share in the proceeds is only a sales commission or service fee OR you acquired ownership of the cattle to facilitate the transfer of ownership to a third party AND
- you owned the cattle less than 10 days AND
a. upon your purchase the checkoff was collected or you received a Certification of Non-Producer Status from the seller OR
b. you purchased the cattle in a transaction where you were not responsible for collection of the checkoff (ex: Auction Market).
The checkoff should be collected and remitted when cattle are used as payment for services. This type of transaction should be treated as a private treaty sale.
Example: Farmer “A” hires manager Smith to run 100 head of cattle. At years end manager Smith keeps 5 heifers for his work. Five dollars in checkoff assessments should be collected from farmer “A” and remitted to the state beef council. Just as in a private treaty sale, both manager Smith and farmer “A” are liable until the checkoff is remitted.
The major criteria for determining when assets (cattle, beef, or beef products) are transferred from one legal entity to another, is the transfer of risk of loss between the parties. The point at which risk of loss passes from one legal entity to another signifies that ownership has transferred for determining whether or not the checkoff is due.
Dairy producers’ primary business is producing milk, but they also produce beef from market cows and bull calves. In fact, about 20 percent of the beef produced in the United States comes from dairy animals. Producers who helped write the Beef Act wanted to be certain that all producers who would benefit from increased beef demand share in the cost of funding the program. So dairy producers pay the beef checkoff, too, and are represented on state beef council boards and on the 103-member Beef Board, which currently includes about 20 dairy producers.
No producer is exempt from the checkoff, according to the Act. Buyers who resell cattle no more than 10 days from the date of purchase may file a non-producer status form and avoid paying an additional dollar. They are, however, responsible for remitting collected funds and reporting any transaction to the qualified state beef council. More recently, producers of 100 USDA percent certified organic products were exempted from most commodity checkoffs in separate legislation.
If cattle are located in one state for 30 days prior to their sale, the checkoff dollars stay in that state. If it is less than 30 days, then the dollars go back to the state of origin.
When ownership of cattle is shared, each owner must pay his pro rata share of the checkoff when shared cattle are sold. The important issue is not the mechanics of the transaction, but that the entire checkoff is collected.
An assessment is due on each transfer of ownership of cattle even if no money has changed hands between parties. For example, when cattle are used as payment for services rendered or when cattle are given as a gift or donation the producer shall remit the checkoff. The transaction will be treated as a private treaty sale. If cattle are purchased and transferred as a gift within 10 days, then the rules governing Non-Producer Status apply.
The checkoff is due by the 15th of the month following the transaction. (Example: You sell cattle on June 6, the checkoff must be postmarked by July 15th.) Under the Act and the Order, OBC is legally responsible for collecting monthly assessments as well as a two percent late charge on checkoff remittances if not postmarked by the 15th of the month following the transaction.
By law, all producers selling cattle or calves, for any reason and regardless of age or sex, must pay the checkoff to support beef/veal promotion, research and information through the Beef Promotion and Research Act. The buyer is generally responsible for collecting $2 per head from the seller, but both are responsible for seeing that the checkoff is collected and paid. In addition, the checkoff also is collected at the same rate on every live beef animal imported and at the equivalent rate of $1-per-head on all beef products that are imported.
On March 31, 2014, the Ohio Department of Agriculture certified the results of the Ohio Beef Marketing Program Referendum. A total of 2,118 votes were certified: 1,527 votes, or 72 percent of the total, were cast in favor of the referendum and 591 votes were opposed to the increase.
Beginning June 2, 2014, and continuing thereafter, a total of $2 per head beef checkoff will be assessed on all cattle sold in Ohio. The beef checkoff is assessed on all cattle, including beef, dairy and veal when there is a change in ownership. As with the existing federal $1 beef checkoff, all checkoff assessments are to be mailed and made payable to the Ohio Beef Council, and are due by the 15th of the month following assessment.
Producers who live outside of Ohio and bring cattle into Ohio to market will be assessed the $2 checkoff. The first federal dollar will be sent back to their state by the beef council to be split 50-50 between the state of origin and the Beef Board. The second Ohio $1 will stay in Ohio.
Ohio cattle sold in internet sales are also subject to the $2.00 assessment. Marketers located outside of Ohio who operate internet sales where Ohio cattle are marketed will also need assess and remit the $2.00 checkoff.
Ohio producers who haul cattle to a market located outside of Ohio are responsible for paying the second $1 for the Ohio state checkoff directly to the Ohio Beef Council. (The existing federal dollar will be deducted at the point of sale and returned to its state of origin.)
Federal and state checkoff can be remitted using one check and one new state/federal remittance form, providing it is completed according to its instructions to clearly show the amount of federal checkoff and state checkoff.
Per the Ohio Revised Code, refunds of the $1 state checkoff are available by written request using an approved Ohio Beef Council refund form. These forms can be requested by contacting the Ohio Beef Council at 614-873-6736 or by emailing firstname.lastname@example.org. No refund is available on the first dollar since it is governed by the federal beef checkoff.
The recently passed checkoff increase will generate additional funds to enable the Council to extend beef’s presence in Ohio’s schools, conduct more public relations outreach and farm tours for Ohio’s food professionals, directly connect with consumers through spokesperson training programs, provide nutrition seminars for health professionals and develop a greater statewide media presence through radio, print, and social media all which help to reach Ohio’s 11.5 million consumers with a beef message.