Tax and Revenue Administration Fuel Tax Act Information Circular LPG-4R1

Note: Due to the Government of Alberta reorganization in November 2004, where applicable, the web versions of our documents have been updated to change references from "Minister of Revenue" or "Provincial Treasurer" to "Minister of Finance". References to "Revenue Canada" or "Canada Customs and Revenue Agency" have been changed to "Canada Revenue Agency" to reflect that name change as well. The paper version of this document is available from Tax and Revenue Administration and if applicable, will be updated as time permits.

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - PROPANE PRODUCERS AND DISTRIBUTORS:
ADMINISTRATION

This information circular discusses the following topics:

• Audit and Enforcement
• Prosecutions
• Interest and Penalties
• Tolerances
• Objections and Appeals

Audit and Enforcement

1. Alberta Finance, Tax and Revenue Administration ("TRA") auditors are authorized by the Minister of Finance to conduct inspections and audits to determine whether the fuel tax has been properly collected and remitted. A producer or distributor selected for audit must make his records available to the auditor for inspection.
   
   
2. The provisions of the Fuel Tax Act are enforced by the Royal Canadian Mounted Police, municipal police forces, and TRA staff. Enforcement activities include random sampling of totalizer readings by TRA auditors and, upon request from TRA, by producers and distributors when delivering propane.

Prosecutions

3. A producer or distributor who fails to collect or remit tax is guilty of an offence and is liable, upon conviction, to a penalty as follows:
   • for a first offence, a fine of up to $10,000 and/or a jail term of up to six months;
   • for a subsequent offence, a fine of up to $25,000 and/or a jail term of up to one year;
   • plus, for any offence, an amount of up to 300 percent of any amount lost by TRA as a result of the offence.
     
     
4. A producer or distributor who makes, assents to, or conspires with another person to make false statements or false or deceptive entries in records, or destroys or alters records, or willfully evades compliance with the Fuel Tax Act or Regulations, is guilty of an offence and is liable, upon conviction, to a fine of up to 300% of any amount lost by TRA as a result of the offence.
   
   
5. A producer or distributor who fails to file a return or provide information, or who fails to maintain records and books of account when required to do so, is guilty of an offence and is liable, upon conviction, to a fine of $50 for each day of default.
   
   
6. A producer or distributor who contravenes a provision of the Act or Regulations for which no other penalty is specified is guilty of an offence and is liable, upon conviction, to a penalty of:
   • for the first offence, a fine of up to $1,000 and/or a jail term of up to one month;
   • for a subsequent offence, a fine of up to $5,000 and/or a jail term of up to six months.

Interest and Penalties

7. Interest is charged on any overdue amounts owing to TRA. The interest rate used is the same as the debit interest rate calculated for purposes of the Alberta Corporate Tax Act.

   Current interest rates can be obtained by calling TRA or from our Internet site.

8. When fuel tax has not been remitted as and when required, a monthly penalty of 5% of the outstanding amount may be charged. The penalty is calculated for each month or partial month between the mailing date of the notification identifying the unremitted tax and the date of payment.
   
   
9. A penalty of $25 may be assessed to a producer or distributor who fails to submit a return as and when required by the Fuel Tax Act, for each day between the day the return was required to be filed and the day the return was received by TRA.
   
   
10. If an amount owed to TRA results from neglect, carelessness, willful default, fraud or evasion, a penalty of 25 percent of the amount owing may be assessed.
    
    
11. If a producer or distributor contravenes the Act or Regulation, or legislation in another jurisdiction governing the collection of fuel tax in that jurisdiction, TRA may cancel or suspend the registration of the producer or distributor.

Tolerances

12. In the course of an in-office review or a field audit, small discrepancies may be identified. To avoid time-consuming revisions, specific tolerances have been adopted by TRA. One such tolerance is that no disbursement will be made or collection action taken if the total amount involved is $20.00 or less. Other tolerances may apply to field audits.

Objections and Appeals

13. The Tax Services Division of TRA has the responsibility of considering objections to any of the following actions:
    • an assessment or reassessment of fuel tax, interest or penalties;
    • the refusal to issue or cancellation of a fuel tax exemption number for the purchase of tax-out LPG from a producer;
    • the refusal to pay a refund of fuel tax; and
    • the refusal to register or cancellation of the registration of a producer, distributor or retailer.
      
      
14. A separate notice of objection must be completed in the prescribed form for each action to which objection is taken within 90 days of the day of mailing of the notice of the action leading to the objection. Notices of objection may be personally delivered or sent by certified mail, registered mail, courier, or fax to:

    TAX SERVICES DIVISION
    TAX AND REVENUE ADMINISTRATION
    9811 109 STREET
    EDMONTON AB T5K 2L5
    Fax: (780) 427-0348

15. An appeals officer will review the objection and will either confirm, vary or reverse the assessment or reassessment, or confirm or reverse the refusal or cancellation. The objector will be advised of the decision.
    
    
16. Notice of objection forms can be obtained by calling 427-3044 (Edmonton calling area) or 310-0000/427-3044 (Alberta toll free).
    
    
17. Objectors who are dissatisfied with the outcome of their objection may file an appeal with the Court of Queen's Bench within 90 days of the date of mailing of the response to the notice of objection. Also, any objectors who have not received a response from Tax Services within 90 days of the filing of the notice of objection, may file an appeal with the Court of Queen's Bench. In both cases the appeal must be served on TRA and a copy must be filed with the Clerk of the Court. The Court may confirm, vary or reverse the (re)assessment leading to the appeal or confirm or reverse the refusal or cancellation leading to the appeal. The Court may make an order relating to costs as it deems appropriate. The decision of the Court may be appealed to the Alberta Court of Appeal, and subsequently to the Supreme Court of Canada.