Tax and Revenue Administration Fuel Tax Act Information Circular FT-10R1

FT-10R1/ July 2007

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - OFFENCES AND RELATED PENALTIES

(Effective April 1, 2007)

NOTE: This Information Circular is intended to explain legislation and provide specific information. Every effort has been made to ensure the contents are accurate. However, if a discrepancy should occur in interpretation between this Information Circular and governing legislation, the legislation takes precedence.

This Information Circular explains the following topics:

• Overview
• Definitions
• Offences and Related Penalties
  • Recipients
  • Vendors
  • Consumers
  • Document and Records
  • General
• Failure to File Returns or Maintain Records

OVERVIEW

1. Any person convicted of a serious offence under the Alberta Fuel Tax Act (Act) is liable to substantial fines, terms of imprisonment, or both.
   
   
2. Penalties related to offences are Court-imposed. Maximum fines and/or terms of imprisonment that may be imposed are specified in the Act and depend on the nature of the offence.

DEFINITIONS

3. “Person” includes an individual, a corporation, a partnership, a trust, and an Indian band.
   
   
4. "Recipient" means
   
   
   • a consumer or any other person who purchases fuel,
     
     
   • a person who imports fuel into Alberta,
     
     
   • a person who sells or removes fuel from a registered terminal or refinery,
     
     
   • a distributor of liquefied petroleum gas,
     
     
   • a person who rebrands fuel, and
     
     
   • a person who is required by the Act to pay tax on fuel used in Alberta, including railways and International Fuel Tax Agreement (IFTA) carriers.
     
     
5. “Vendor” means a person who sells fuel in Alberta to a consumer.
   
   
6. “Consumer” means a person who purchases fuel in, or import fuel into, Alberta:
   
   
   • for use by that person;
     
     
   • for use by another person at the first person's expense; or
     
     
   • on behalf of, or as an agent for, a principal to be used by the principal or by another person at the principal's expense.
     

OFFENCES AND RELATED PENALTIES

Recipients

7. A recipient, other than a consumer, who does not register or pay tax as and when required under the Act, or does not account for the receipt, possession and disposition of the recipient's marked fuel, is guilty of an offence and liable:
   
   
   • for a first time offence, to a fine of not more than $10,000, a term of imprisonment of not more than six months, or both.
     
     
   • for a subsequent offence, to a fine of not more than $25,000, a term of imprisonment of not more than one year, or both.

Vendors

8. A vendor who:
   
   
   • does not pass on the benefit of a fuel tax exemption or the Alberta Farm Fuel Distribution Allowance (AFFDA) to an eligible consumer;
     
     
   • sells marked fuel or provides the AFFDA without the proper evidence that the consumer is eligible to purchase marked fuel or is eligible for the AFFDA;
     
     
   • sells marked fuel where the vendor knows or ought to know that the evidence of eligibility presented by the consumer is false, or the marked fuel will not be used for a prescribed purpose or use; or
     
     
   • sells clear fuel and provides a tax exemption without obtaining the proper evidence that the consumer is eligible to purchase clear fuel exempt from tax,

is guilty of an offence and liable:

• for a first time offence, to a fine of not more than $10,000, a term of imprisonment of not more than six months, or both.
  
  
• for a subsequent offence, to a fine of not more than $25,000, a term of imprisonment of not more than one year, or both.

Consumers

9. A consumer who:
   
   
   • does not pay and/or remit tax as and when required under the Act;
     
     
   • colours or otherwise identifies fuel in contravention of the Act;
     
     
   • adds anything to marked fuel, or puts marked fuel through a process that affects or changes the marked fuel so it is no longer coloured or identifiable as marked fuel according to the Regulations;
     
     
   • sells, or passes off, as marked fuel any fuel that is not marked fuel;
     
     
   • sells, or passes off, as clear fuel any fuel that is not clear fuel;
     
     
   • buys marked fuel for farming operations in Alberta, then sells it to another consumer for a purpose or use other than farming operations in Alberta;
     
     
   • buys, then uses the marked fuel for an ineligible purpose; or
     
     
   • possesses marked fuel in contravention of the Act

is guilty of an offence and liable:

• for a first offence, to a fine of not more than $1,000.
  
  
• for a subsequent offence, to a fine of not more than $5,000, a term of imprisonment of not more than six months, or both.

Documents and Records

10. A person who:
    
    
    • makes, participates in, agrees to, or allows the making of false or deceptive statements in an application, return, statement, record, report, or document delivered or made under the Act or the Regulations;
      
      
    • destroys, alters, mutilates, or disposes of records required to be kept under the Act;
      
      
    • makes, agrees to, or allows the making of false or deceptive entries, or omits, agrees to, or allows the omitting of information in records required to be kept under the Act;
      
      
    • wilfully evades, or attempts to evade, compliance with the Act or the Regulations; or
      
      
    • conspires with another person to commit any offence noted above
      

is guilty of an offence and, in addition to any penalty provided for by the Act, is liable to

• a fine of not more than 300 per cent of
  
  
  • the tax evaded or sought to be evaded;
    
    
  • the difference between the amount that should have been remitted and the amount remitted;
    
    
  • the refund, credit, allowance, reimbursement or rebate obtained or sought to be obtained; or
    
    
• a fine as noted above and a term of imprisonment of not more than two years.
  

General

11. A person, other than a consumer, who:
    
    
    • in contravention of the Act and/or Regulations, introduces into any fuel a substance or thing for the purpose of, or having the effect of, colouring or identifying the fuel;
      
      
    • adds anything to marked fuel, or puts marked fuel through a process that affects or changes the marked fuel so that it is no longer coloured or identifiable as marked fuel according to the Regulations;
      
      
    • sells, or passes off, as marked fuel any fuel that is not marked fuel;
      
      
    • sells, or passes off, as clear fuel any fuel that is not clear fuel; or
      
      
    • possesses marked fuel in contravention of the Act

is guilty of an offence and liable:

• for a first offence, to a fine of not more than $10,000, a term of imprisonment of not more than six months, or to both a fine and imprisonment.
  
  
• for a subsequent offence, to a fine of not more than $25,000, a term of imprisonment of not more than one year, or to both a fine and imprisonment.
  

12. A person in contravention of any provision of the Act or Regulations for which a penalty is not otherwise provided is guilty of an offence and liable:
    
    
    • for a first time offence, to a fine of not more than $1,000, a term of imprisonment of not more than one month, or to both a fine and imprisonment.
      
      
    • for a subsequent offence, to a fine of not more than $5,000, a term of imprisonment of not more than six months, or to both a fine and imprisonment.

FAILURE TO FILE RETURNS OR MAINTAIN RECORDS

13. A person who does not submit a return or report, or does not provide information or a document as and when required under the Act or the Regulations is guilty of an offence and liable to a fine of $50 for each day of default.
    
    
14. A person who does not maintain records and books of account when required by TRA is guilty of an offence and liable to a fine of $50 for each day from the day the person receives notification of the requirement to the day the person complies with the requirement.