Tax and Revenue Administration Fuel Tax Act Information Circular FT-13

FT-13/ March 2007

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - EXEMPT-SALE VENDORS

(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.

EXEMPT-SALE VENDORS

This Information Circular explains:

• Definition of Tax-Exempt Fuel
• Registration
• Fuel Tax Exemption Certificates
• Sale of Tax-Exempt Fuel
• Sale to Ineligible Consumers

DEFINITION OF TAX-EXEMPT FUEL

1. Tax-exempt fuel is any fuel purchased exempt from tax by a consumer who provides, at the time of purchase, a valid fuel tax exemption certificate or other evidence required by the Fuel Tax Act (Act) and uses the fuel for a prescribed purpose as specified in the Act. Where required by the Act the tax-exempt fuel must be marked.

REGISTRATION

2. Under the Act any person who sells tax-exempt fuel in Alberta to consumers is required to register with Alberta Finance and Enterprise, Tax and Revenue Administration (TRA) as an exempt-sale vendor.
   
   
3. A registered exempt-sale vendor that is located on a reserve in Alberta and sells tax-exempt clear fuel to Indians or Indian bands will, on approval from TRA, also be registered to provide the exemptions under the Alberta Indian Tax Exemption (AITE) program. In addition, a registered exempt-sale vendor who delivers tax-exempt clear fuel to a reserve in Alberta to Indians or Indian bands will, on approval from TRA, be registered to provide the AITE program exemptions. The duties and responsibilities for these exempt-sale vendors are explained in the AITE series of information circulars.

FUEL TAX EXEMPTION CERTIFICATES

4. Exempt-sale vendors are permitted to sell fuel exempt from tax to consumers who provide evidence of exemption. The FT-3, “Fuel Tax Exemption Certificates”, information circular explains the evidence required before an exempt-sale vendor is permitted to sell clear fuel exempt from tax or marked fuel.

SALE OF TAX-EXEMPT FUEL

5. Information about the sale of clear tax-exempt and marked fuel and the provision of the Alberta Farm Fuel Distribution Allowance (AFFDA) is available in the FT-4, “Sale of Tax-Exempt Fuel” information circular.

SALE TO INELIGIBLE CONSUMERS

6. Where an exempt-sale vendor sells tax-exempt fuel without obtaining proof of the purchaser's eligibility for the fuel exemption, or knows or ought to know that the fuel will not be used for authorized purposes, both the exempt-sale vendor and the consumer are jointly and severally liable to pay to TRA the amount of the tax the consumer would have been required to pay on the fuel.
   
   
7. Where an exempt-sale vendor sells marked fuel which includes the AFFDA without obtaining the evidence of the consumer's eligibility for the exemption and grant, or knows or ought to know that the fuel will not be used for eligible farming operations, both the exempt-sale vendor and the consumer are jointly and severally liable to pay to TRA the amount of the AFFDA provided.