Vol. 3 No. 4 / April 2002 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 TOBACCO
TAX ACT SPECIAL NOTICE:
Alberta’s Budget 2002 announced a tax increase on cigars from 80% to 183%. The minimum tax per cigar is $0.35 with a maximum tax per cigar of $8.00. The increase is effective 12:01AM on March 20, 2002. This notice is to provide information on a new term to be used in the calculation of the Alberta tax on cigars effective 12:01AM March 20, 2002. To provide some certainty in the price to be used in calculating the Alberta tax on cigars, the term "retail price" previously used will be replaced with a new term "taxable price". The taxable price of a cigar is defined as follows: Manufacturers who are not retailers If the cigar was manufactured in Canada and the manufacturer is not the retailer, the taxable price of a cigar is 1.3 times the manufacturer’s selling price, including any charges for delivery or transportation and any duty and excise tax imposed under the laws of Canada, but excluding the federal Goods and Services tax. Importers who are not retailers If the cigar was manufactured outside of Canada and the importer is not the retailer, the taxable price of a cigar is 1.3 times the importer’s selling price, including any charges for delivery or transportation and any duty and excise tax imposed under the laws of Canada, but excluding the federal Goods and Services tax. Manufacturers or Importers who are the retailers If the manufacturer or importer of a cigar is also the retailer of the cigar, the taxable price of a cigar is the price the consumer paid for the cigar, including any charges for delivery or transportation but excluding the tax imposed under the Alberta Tobacco Tax Act or the federal Goods and Services tax. The Alberta tax on the cigar is calculated as 183% of the taxable price of the cigar. This provides certainty to those manufacturers and importers who are not the retailers in the calculation, collection and remittance of the Alberta cigar tax. The section of Tobacco Tax Act that implements the use of the taxable price is the same section that determines the tax percentage. Therefore, it will be retroactive to 12:01 AM on March 20, 2002. However, we recognize that it may take manufacturers and importers a few days to change their systems. We request that all cigar manufacturers and importers advise us of the changeover date to the new calculation.
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