Tax and Revenue Administration Fuel Tax Act Information Circular PRO-2R1

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.

This information circular sets out the refund application process and the related responsibilities of propane retailers under the Fuel Tax Act and Regulations. The topics discussed include:

• Calculating the Refund Due
• Filing Refund Claims
• Payment of Claims by TRA
• Records and Records Retention

Calculating the Refund Due

1. Retailers purchase all propane that is delivered into a storage tank used to fuel vehicles tax-in from distributors or producers. Retailers charge tax on propane sold through the automotive dispensing system, but not propane dispensed into portable cylinders. Retailers may make an application to Alberta Finance, Tax and Revenue Administration ("TRA") for a refund of the tax paid by them on all propane sold tax-out to consumers. Retailers must first register with TRA in order to be eligible to claim this refund (see Information Circular PRO-1 for details on registration).

2. Retailers must keep records of all propane purchased and received (see paragraphs 6 and 7 below) as well as totalizer readings which indicate the volume of propane sold tax-in. The refund due to the retailer for a reporting period is calculated by taking the total volume of propane purchased tax-in and deducting the total volume of tax-in sales to arrive at the amount of propane that the retailer bought tax-in and subsequently sold tax-out. The volume of tax-in sales is based on the volumes recorded on the totalizer meter, adjusted for propane returned into the retailer's storage tank during meter testing. A reporting period can be any length of time that is one week or more. Reporting periods must be consecutive; that is, the beginning date of a period must be the day after the ending date of the previous period. Refund claims are determined by completing the Propane Retailer Claim for Refund of Propane Tax (form AT384) and Calculation of Non-Taxable Propane Volumes Daily Worksheet (form AT385). Refund applications should not be submitted until the total amount of the refund due exceeds $100.00.

Filing Refund Claims

3. After registering (see paragraph 1), retailers will be given detailed instructions and an access code to allow them to file their refund claims using a touch-tone telephone. A retailer with more than one location must file separate claims for each of their locations.

Payment of Claims by TRA

4. Retailers who wish to obtain refunds of propane tax paid must send an Application for Direct Deposit (form AT4812) to TRA with their Retailer Registration for Propane Tax Refunds (form AT389). The information on the direct deposit request is confidential and will only be used to enable TRA to provide the refunds as quickly as possible.

5. TRA will provide notification to the retailer that the refund was processed and deposited into the retailer's bank account. This notification will be communicated by Payment Systems Corporation (which processes all Government of Alberta payments) by way of a Notice of Deposit.

Records and Records Retention

6. Certain records are to be retained by retailers for a period of four years from the end of the calendar year to which the records and books of account relate. Records may be destroyed after four years, unless TRA has formally specified that records be kept for a longer period. Records may only be destroyed before the end of the four year period if written permission is received. To obtain permission for early destruction of records, a retailer must forward a letter to TRA requesting permission to destroy records. TRA will review the request and advise the retailer of its decision.

7. The type of records and books of account which must be retained for the four year period include:

• purchase records for propane (purchase orders, records of products received);
• totalizer meter readings;
• sales records (invoices to customers, accounts receivable statements or ledgers and bank statements);
• computer records of any / all of the above and additional computer files and records used for the preparation of, or as an information source for, refund applications, including a copy (i.e. backup on tape or diskette) of any program used to create, maintain and review these records;
• records of meter repairs and calibrations.