 |
Tax
and Revenue Administration
Fuel Tax Act
Information
Circular TEFU-1R2 |
| Last Reviewed: |
August 1998 |
| Produced by: |
Alberta Finance, Tax
and Revenue Administration |
| For more information: |
tra.revenue@gov.ab.ca |
TEFU-1R2 /
August 1998
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 - TAX EXEMPT FUEL USERS:
REBATES OF ALBERTA FUEL TAX
- The Fuel Tax Act allows a consumer
to obtain a fuel tax rebate for fuel oil or liquid petroleum gas consumed
in motor vehicles and refrigerated (reefer) units while they are being
used for commercial purposes off public roads and areas. A rebate
may also be obtained of tax on gasoline or diesel fuel exported in
bulk by a consumer to another jurisdiction. In this circular, "off-road"
means any area where fuel use in a licensed vehicle may result in
the user qualifying for a fuel tax rebate. The following paragraphs
set out Tax and Revenue Administration's (TRA) requirements and processing
rules relating to applications for fuel tax rebates from a consumer.
- The following roads and areas qualify
as off-road locations:
- a licence of occupation road;
- a private road on private or Crown
land;
- a highway under construction that
is not open to or accessible to the public;
- any area that is not a highway as
defined in the Highway Traffic Act.
- A private road is any area that the
public is not ordinarily entitled or permitted to use, in whole or
in part, for the passage or parking of vehicles. The term "private
road" does not refer to the ownership of the road, but to the
use of the road.
- Section 1(g) of the Highway Traffic
Act defines a highway to mean any thoroughfare, street, road,
trail, avenue, parkway, driveway, viaduct, lane, alley, square, bridge,
causeway, trestleway or other place, whether publicly or privately
owned, that the public is ordinarily entitled or permitted to use
for the passage or parking of vehicles. The following are included
in the definition of a highway:
- a sidewalk (including the boulevard
portion of the sidewalk);
- a ditch, if the ditch lies adjacent
to and parallel with the roadway; and
- if a highway right of way is contained
between the fences or between a fence and one side of the roadway,
all the land between the fences, or all the land between the fence
and the edge of the roadway, as the case may be.
- In summary, an area to which the public
ordinarily has access for the passage and parking of vehicles is not
off-road. For example, rest areas and service station parking lots
are open to or accessible to the public and are not off-road. Loading/unloading
areas are often accessible to the public and are then not off-road.
- A rebate of tax may be granted to an
applicant for taxed fuel consumed in a motor vehicle or reefer unit
used for commercial purposes in off-road operations. Commercial operations
using unlicensed vehicles and equipment are expected to use marked
fuel, which is already tax exempt, in those vehicles (see paragraph
7 for details on obtaining marked fuel). A rebate of fuel tax paid
may be granted for unlicensed vehicles or equipment if, in TRA's opinion,
marked fuel was "not reasonably available". Only commercial
operations having licensed vehicles operating both on and off-road
and using clear, tax-paid fuel should normally be applying for a rebate
of the tax paid on the portion of fuel used off-road.
- Marked fuel is considered to be "not
reasonably available" only if the consumer has obtained
a TEFU (tax exempt fuel user) number and:
- no bulk fuel dealer located within
a 50 kilometer radius of the consumer has marked fuel available
for sale; or
- the fuel is being used in a project
where clear fuel must also be used, and there is a legal restriction
(such as zoning) that prevents the consumer from having more than
one storage tank.
- In order to purchase marked fuel,
a purchaser must present a tax exempt fuel user declaration
number at time of purchase. To apply for this exemption number
a "Declaration of Tax Exempt
Fuel User" (Form AT321) must be completed and submitted
to TRA.
- A rebate of fuel tax may be granted
to a city, town, village, summer village, municipal district, county,
school board, college established under the Colleges Act or University
established under the University Act for tax-paid fuel consumed in
motor vehicles while operated on off-road locations.
- A consumer may qualify for a rebate
of fuel tax on gasoline or diesel fuel that the consumer has exported
in bulk to another jurisdiction, if the consumer has reported the
importation to the other jurisdiction and paid the fuel tax owing
to that jurisdiction.
Forms and Supporting Documentation
- A person who receives a rebate of fuel
tax is required to keep complete and accurate records of purchases
as well as all documentation relating to rebate claims of fuel tax.
It is the responsibility of claimants to have documentation to support
their claims and the off-road fuel usage factor that is used. These
records and documentation are to be retained for four years after
the end of the year in which the rebate is paid.
- To receive a rebate of fuel tax,
an applicant must complete and sign a Fuel
Tax Rebate Application (form AT342 - see IN342
Instructions) plus accompanying schedules and records as
the circumstances require and send them to Tax and Revenue Administration.
Schedule(s) A of Fuel Tax Rebate
Application (form AT343)
- Form
AT343, Schedule A, is a listing of all invoices for Alberta
tax-paid fuels (i.e. excludes marked fuel), some or all
of which was consumed in commercial motor vehicles or reefer
units that were operated partly or entirely off-road during
the claim period.
- Each type of fuel purchased (gasoline,
diesel and propane) must be listed separately on the Schedule A. Computer-generated
forms may be used instead of TRA's pre-printed forms providing all
the required information is presented in the same format as Schedule
A.
- The invoices for each fuel type must
be listed chronologically except that any invoices for fuel that are
not in the applicant's name must be listed separately (see paragraph
16 below).
Fuel Purchase Invoices in Applicant's
Name
- All supporting fuel purchase
invoices must be submitted with an application and arranged in chronological
order. Suppliers' statements are also acceptable provided they contain
all necessary information, as described in the following paragraph.
Invoices and suppliers' statements will be returned to the claimant
on completion of our review and processing of the application.
- All supporting fuel purchase invoices
or statements must show the name and address of the seller, the name
of the purchaser, the date of the purchase, the invoice number, the
type of fuel, the quantity of fuel purchased and the price paid. It
must be clear that Alberta fuel tax was included in the purchase price.
Rebate claims based on invoices or statements that do not meet these
requirements will be rejected.
Fuel Purchase Invoices not in Applicant's
Name
- Although it is the applicant itself
that has usually purchased the fuel, this is not always the case.
When someone other than the applicant has purchased fuel on which
the applicant is seeking a tax rebate, special application procedures
are required, as explained below.
Example:
An applicant might have, for instance, authorized its employees,
shareholders or affiliated companies to purchase fuel on its behalf,
with the applicant reimbursing the purchaser. In such a case,
the applicant must provide with its fuel tax application a signed
agreement between himself and the initial purchaser of the fuel
stating that the fuel purchased in the name of the other party
was in fact used in the commercial operations of the applicant
and that the other partywill not claim a fuel tax rebate in respect
of that fuel. The agreement must be signed by the applicant and
by the party in whose name fuel was purchased. Appendix A provides
a sample agreement.
Carriers and Owner-Operators
- The ultimate purchaser and user of the
fuel is the party that is eligible for the rebate. However, in some
cases, where an owner-operator uses fuel purchased from a carrier,
it may be more practicable for the carrier to file a rebate claim
on behalf of all its owner-operators, than for all of the owner-operators
to file claims themselves. If a carrier makes a claim that includes
fuel used by owner-operators, then the carrier must provide an assignment
of the refund entitlement from each owner-operator who used fuel that
is included in the claim. An assignment could be in the form of a
clause in a contract between the owner-operator and the carrier, or
in the form of a separate document.
- Some owner-operators' vehicles may be
included in a carrier's International Fuel Tax Agreement (IFTA) fleet
and also be used partly off-road. In such cases, the owner-operator
must obtain IFTA information from the carrier and submit it with the
tax-exempt fuel use ("TEFU") rebate claim. The information
must show how the vehicle's travel, fuel use and fuel taxes were reported
for IFTA purposes. TEFU rebate claim periods in these cases must begin
on the first day of January, April, July or October and end on the
last day of March, June, September or December.
Off-Road Fuel Usage Calculation
- An applicant will have used clear fuel
and possibly propane in both on-road and off-road activities during
the period covered by the rebate application. The applicant must determine
the breakdown of fuel consumption between on-road and off-road. Ideally,
records are maintained about fuel consumption as the fuel is being
used.
- However, if operations are fairly uniform
over a period, it might be reasonable to conduct a survey of actual
on-road vs. off-road operations over a representative number of days
and from that derive factors for off-road fuel usage. If the rebate
claims are based on survey results, the period and the sample size
selected for the survey should be representative of the company's
operations and the use of its vehicles during the entire claim period.
The surveys must be based on actual fuel used during the period surveyed,
not on estimates, and the off-road percentages arrived at must be
adjusted for seasonal variations when claims are submitted.
- For each refund claim, TRA requires
a complete explanation of the off-road activities and complete descriptive
calculations to support the off-road fuel usage. The explanation should
answer the following questions:
a) What did the applicant do that
required some or all of its vehicles to operate off-road? In what
part of the province did the off-road activity occur?
b) What kind of vehicles and motorized
equipment did the applicant operate during the claim period? Which
of these consumed taxed fuel and operated at least partially off-road?
What was the off-road activity of the licensed vehicles that did
operate off-road?
c) What kind of fuel - diesel, gasoline
or propane - did each of the vehicles and pieces of equipment
consume?
d) What was the total consumption
of each kind of fuel over the period for which application is
made?
e) What were the rates of consumption
of fuel by the various vehicles during various operations? (For
instance, how much fuel did a truck burn per hour of highway travel
and how much per hour while idling or pumping at a job site?)
How were the rates of fuel consumption determined? (e.g. from
a survey or actual consumption? from manufacturer's specifications?
from some other set of standards?)
- New surveys should be provided for each
claim period unless the applicant can demonstrate that there has not
been any significant change in the percentage of off-road activity
and the mix of vehicles and equipment used in its operations. The
results of these new surveys cannot be used to adjust the offroad
factors used in prior claim periods.
- If the consumer is applying for a refund
of fuel tax on gasoline or diesel fuel exported to another jurisdiction,
the following documentation must be provided with the claim:
- a copy of a bill of lading from
a carrier, and
- a copy of the fuel tax return for
the other jurisdiction evidencing that the fuel importation was
reported and the fuel tax was paid, or
- a copy of the customs document.
Time Limits and Claim Periods
- A claim for a fuel tax rebate from a
consumer must be received by TRA not later than three years after
the end of the calendar year in which the fuel was purchased. The
application must be complete -- it must include all supporting schedules
and documentation as described above.
- An application for a tax rebate must
cover a minimum period of three months. To facilitate the processing
of rebate claims, we require the following:
a) that the claim period for an application
end at the end of a calendar quarter whether the period covered
by the claim is for just one quarter or for a longer period;
b) that amendments for time periods
covered by previous applications be filed separately as amended
applications for those claim periods and not be included
with the application for the current period.
- Amended applications should be filed
within 90 days of the date of the letter from TRA that described the
disposition of the original application.
- An interjurisdictional carrier who is
registered with IFTA must file quarterly tax returns and might also
file applications for fuel tax rebates. A rebate application for a
period will not be processed until the quarterly tax returns for that
period have been received by TRA.
- Before TRA pays a fuel tax rebate, it
attempts to satisfy itself that the application is reasonable. To
that end, TRA staff may contact the applicant and request additional
information or clarification about information included in the application.
If all of the required information and supporting documentation is
not supplied, TRA may adjust or disallow the claim. If there are numerous
problems with a claim, the claim may be deemed not to have been filed,
and may be returned to the claimant for correction and re-submission.
Payment of all or part of a requested rebate does not mean that TRA's
review has been completed. At a later date, the application may undergo
an in-depth review by TRA's auditors. The auditors may contact the
applicant for clarification about the application. They may also inspect
the records of the applicant at the applicant's premises or have the
records delivered to the offices of TRA.
- For forms or additional information,
please call TRA at 427-3044 or toll free in Alberta at 310-0000/427-3044.
APPENDIX
A
FUEL TAX REBATE AGREEMENT
(Between Claimant &
Purchaser)
Claimant
Initial Purchaser of Fuel
1. We hereby agree that the invoices submitted:
____ with this application,*
____ within the period _____________ to _____________,**
(start date) (finish date)
____ from the period _____________ until rescinded,**
(start date)
(with an "X" select one of the above options, and then complete inserts as necessary)
in the name of __________________________________ represent fuel purchased
(initial purchaser's name)
on behalf of and consumed in the operations of ____________________________.
(claimant's name)
2. _____________________________agrees that he will not use these invoices on a fuel tax rebate claim.
(initial purchaser)
___________________________________ __________________________________
(initial purchaser's signature) (claimant's signature)
___________________________________ __________________________________
(date) (date)
* Only invoices included with this particular
application are subject to this particular agreement.
** Any invoices in the name of the Initial
Purchaser that are submitted by the Claimant will be subject to this
agreement. It is the responsibility of the parties to the agreement
to advise Alberta Finance - Tax and Revenue Administration of any change
to, or cancellation of, this agreement prior to the ending date. Without
such notification, the agreement in its present form will be binding
on both parties.
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