Tax and Revenue Administration Fuel Tax Act Information Circular FT-7

FT-7/ March 2007

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - ASSESSMENTS

(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 assessment of fuel tax to be remitted to Alberta Finance and Enterprise, Tax and Revenue Administration (TRA), or other amounts owing by a person and the assessment of penalties and interest. Topics include:

• Definitions
• Assessments
• Normal Assessment Periods
• Exceptions
  • Waivers of Time Limit to Reassess and Revocations of Waiver
  • Misrepresentation or Fraud
  • Objections and Appeals
• Penalties
• Interest

DEFINITIONS

1. ”Person” includes an individual, corporation, partnership, trust or an Indian band.

ASSESSMENTS

2. TRA may assess a direct remitter for the amount of tax owing that the direct remitter failed to remit. Refer to Information Circular FT-11, “Direct Remitters” for information on filing requirements.
   
   
3. In addition to fuel tax owing by a direct remitter, TRA may assess other amounts owing by a person. This includes the amount of:
   
   
   • tax that has not been paid by the person, if that person is not a direct remitter;
     
     
   • a refund, credit or allowance provided to the person that exceeds the refund, credit or allowance to which the person was entitled;
     
     
   • a rebate provided to the person that exceeds the rebate to which the person was entitled;
     
     
   • an Alberta Farm Fuel Distribution Allowance (AFFDA) or grant received by the person that exceeds the AFFDA or grant to which the person was entitled;
     
     
   • a reimbursement provided to a vendor that exceeds the amount of reimbursement to which the vendor was entitled; or
     
     
   • tax or benefit the person is liable for when in contravention of the Act. This includes amounts owing where the person:
     
     
     • is a vendor who does not pass along the benefit of a tax exemption or the AFFDA to an eligible consumer;
       
       
     • is a vendor who makes a tax-exempt sale to a consumer who does not provide a fuel tax exemption certificate or other prescribed evidence of exemption at the time of purchase, or the vendor knows or ought to know that the fuel tax exemption certificate or other evidence is false, or that the fuel will not be used for eligible purposes or use;
       
       
     • is a vendor who sells marked fuel at the reduced price to a consumer who does not provide a fuel tax exemption certificate or other prescribed evidence of exemption, or the vendor knows or ought to know that the fuel tax exemption or other evidence is false, or that the marked fuel will not be used for farming operations in Alberta;
       
       
     • is a consumer who purchases tax exempt fuel and uses it or permits it to be used for an ineligible purpose;
       
       
     • is a consumer who purchases marked fuel at the reduced price and uses it or permits it to be used for a purpose or use other than for farming operations in Alberta;
       
       
     • possesses marked fuel when not eligible to do so;
       
       
     • is registered to sell marked fuel and owns the fuel, but does not account to TRA for the receipt, possession and disposition of marked fuel; or
       
       
     • has delegated responsibilities under the Act to another person and that person does not fulfill the delegated responsibilities.

NORMAL ASSESSMENT PERIODS

4. TRA may, within four years from the end of the calendar year in which tax was to have been remitted, assess a direct remitter for taxes owing.
   
   
5. For other amounts owing, TRA may make an assessment within four years from the end of the calendar year in which the person first owed the amount.
   
   
6. Where TRA establishes that a person has paid more tax than was required, TRA may, within four years after the overpayment was made, assess the person for the correct amount.
   
   

EXCEPTIONS

Waivers of Time Limit to Reassess and revocation of waivers

7. A waiver of time limit to reassess ensures that the person does not lose the right to have an adjustment made even if the normal assessment period expires. If an assessment period is about to expire and an issue relating to a proposed assessment has not been resolved between the person and TRA, the person may make application to waive the limitation of the assessment period. If a valid waiver has not been filed, TRA may issue an assessment before the assessment period expires, even if the issue has not been fully resolved.
   
   
8. To make a waiver valid, the person must submit to TRA a prescribed form signed by an authorized signing officer and specifying the conditions under which the assessment period has been waived. The waiver must be received by TRA before the assessment period expires.
   
   
9. Once a valid waiver is received by TRA for a taxation period, that period is held open indefinitely for assessment of the matters specified in the waiver. The person may, however, submit to TRA a "Notice of Revocation of Waiver" in the required format. The revocation prohibits an assessment for that period from being processed as a result of a waiver beyond six months from the date on which the notice of revocation is received by TRA.
   

Misrepresentation or fraud

10. An assessment may be made at any time, including beyond the normal reassessment period, if the person has made a misrepresentation by neglect, carelessness or wilful default, committed any fraud in the filing of a return or in supplying information, or in omitting to disclose any information.

Objections and appeals

11. A reassessment may be made at any time when it results from the resolution of an objection or appeal.
    

PENALTIES

12. If a person does not submit a return or report as and when required, TRA may assess a penalty against the person equal to the greater of:
    
    
    • $25 for each day of default, or
      
    • five per cent of any unpaid tax

    up to a maximum penalty of $1,000.

13. Where an amount is assessed against a person and attributable to neglect, carelessness, wilful default, fraud or evasion, TRA may, in addition to the amount owing under the assessment, assess a penalty against the person in the amount of 50 per cent of the amount so attributable.
    

INTEREST

14. Interest is payable on any amounts owing or assessed under the Act. For taxes owing, interest is payable from the day on which the tax was to be remitted to TRA until the day on which TRA receives the amount assessed. For other amounts owing (see paragraph 2) under the Act, interest is payable from the day the amount was first owed until the day that TRA receives the amount owing.
    
    
15. Interest payable under the Act is simple interest calculated at the prescribed rate. The interest rate is determined quarterly, based on a "reference rate” (the average interest rate, rounded up, on 90-day treasury bills during the first month of the preceding calendar quarter).  Current interest rates can be obtained from our Internet site or by contacting TRA.