Tax and Revenue
Administration (TRA), Alberta Finance, administers
the Tobacco
Tax Act, which legislates the collection
of tax on tobacco (see "Background" below).
The Tobacco Tax Act requires all wholesalers
and importers to be licensed to sell or import tobacco
for resale. Retailers are required to purchase all
tobacco from licensed wholesalers or importers.
All cigarettes and fine cut tobacco intended for
tax-paid sale in Alberta must be marked with the
Alberta tear strip or stamp. Those permitted to mark tobacco must purchase the tear tape from Alberta licensed tear tape producers.
Retailers cannot sell
Alberta-marked cigarettes and fine cut tobacco exempt
from tax. Black stock tobacco and tobacco not required
to be marked (such as snuff, cigars etc.) are the
only products that can legally be sold tax-exempt by registered Alberta Indian Tax Exemption (AITE) retailers to eligible Alberta Indians or Indian bands (see the Alberta Indian Tax Exemption (AITE) series of information circulars) or by duty-free shops to persons leaving Canada. The term
"black stock" refers to those packages of cigarettes and loose tobacco
products that have a peach tear tape rather than
the Alberta tear strip.
The Tobacco Tax Act and its Regulation make provision for:
- collection of tobacco
tax;
- administration of
the tobacco tax exemption under the AITE program, including the payment
of refunds under the program; and
- refunds of tobacco
tax to wholesalers on uncollectible debt or to retailers on tobacco that has
been destroyed or stolen.
Background
Alberta tobacco tax is
applied to all tobacco products: cigarettes, tobacco sticks, cigars,
cigarillos, pipe, water pipe, raw leaf and loose tobacco, snuff and chewing tobacco
purchased in Alberta. Most of the tax is collected
from sales of cigarettes taxed at $0.16
per cigarette.
The tobacco tax is
expected to generate about $740 million in 2006-07.
This revenue goes into general revenues to pay for
all provincial services including healthcare.
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