Tax and Revenue Administration Alberta Indian Tax Exemption (AITE) Special Notice Vol. 4 No. 12

Vol. 4 No. 12 / June 2004

ALBERTA INDIAN TAX EXEMPTION SPECIAL NOTICE:
SALES OF BLACK STOCK TOBACCO TO INELIGIBLE PERSONS

The requirements for lawfully selling black stock tobacco are outlined in the Alberta Tobacco Tax Act and Regulation, and are discussed in the AITE Information Circulars and Special Notices. The information circulars and special notices are available on the internet and from the offices listed at the bottom of this notice.

Tax and Revenue Administration (TRA), together with the Alberta Gaming and Liquor Commission and other law enforcement bodies, enforce the Tobacco Tax Act and ensure that black stock tobacco is not being sold unlawfully. Charges may be laid if evidence has been gathered indicating that retailers and/or their staff are selling black stock tobacco to ineligible persons.

If a charge has been laid, TRA will review the evidence to determine whether there appears to be a problem with the controls implemented at the store. If TRA is satisfied that a problem exists, then the following actions may be taken.

First Charge:

TRA may send a registered letter to the exempt sale retailer asking them to describe what changes have been made in their operations to ensure black stock tobacco is sold only in compliance with legislation and their AITE retailer agreement.

Please note that cancellation or suspension of the exempt sale retailer status will be considered if corrective action is not taken.

Second Charge:

A second charge within 2 years of the first charge may result in the store's exempt sale retailer status being suspended for a period of 60 days. The exempt sale retailer must also take corrective action and provide TRA with a description of these corrective actions.

Before the 60-day period expires, TRA will assess the corrective actions taken by the exempt sale retailer and decide whether to:

• allow the exempt sale retailer to make tax-exempt sales after the period expires,
• continue the suspension, or
• cancel their AITE registration (see below for consequences of cancellation).

Subsequent Charges:

A subsequent charge may result in the permanent cancellation of the exempt sale retailer's status and that exempt sale retailer will no longer be able to sell tax-exempt products (including fuel) under the AITE program.

Before a registration is suspended or cancelled, exempt sale retailers will be given an opportunity to present reasons as to why this action should not be taken.