Tax and Revenue Administration Fuel Tax Act Special Notice Vol. 1 No. 21

Vol. 1 No. 21 / March 2007

ALBERTA FUEL TAX ACT SPECIAL NOTICE:
KEROSENE TAXATION CHANGE

Effective April 1, 2007 a new Fuel Tax Act and regulations will take effect and clear kerosene is to be sold tax out by fuel sellers.

The taxation point for kerosene is being changed from when it leaves the refinery, to when it is used for a taxable purpose. Fuel sellers will no longer pay or charge tax on kerosene. The consumer will be responsible for paying tax directly to Alberta Finance if the kerosene is used for motive purposes in an internal combustion or turbine engine.

Kerosene is defined as a light petroleum distillate that meets the requirements of National Standard of Canada CAN/CGSB-3.3-99. Kerosene does not include aviation fuel.

Independent Fuel Sellers

Independent fuel sellers purchase their kerosene inventory and pay $0.09 Alberta fuel tax per litre up to March 31, 2007. After March 31, 2007 these independent fuel sellers will not be able to recover the $0.09 per litre from consumers. To allow independent fuel sellers to recover the $0.09 per litre they have already paid, Alberta Tax and Revenue Administration may refund the fuel tax paid on kerosene inventory. To obtain a refund of tax the following documents must be provided:

• all kerosene fuel purchase invoices from the last physical inventory to the close of business on March 31, 2007. This is to confirm that clear kerosene was purchased and included $0.09 per litre Alberta fuel tax.
  
  
• kerosene inventory reconciliation records such as opening balance, plus purchases minus sales. These records should be submitted for each bulk fuel storage location of kerosene.
  
  
• in the event of a discrepancy between book and physical inventory, you will receive a refund of tax on the lesser amount.

To request a tax refund on kerosene, please complete the Declaration of Kerosene Inventory AT4920.

Full Direct Remitters (Fuel Tax Collectors under the former Act)

The above entities will have to determine the unsold inventory of taxable kerosene at their agents' locations on March 31, 2007 and make a volume adjustment on the March 31, 2007 period end generic fuel tax return. Backup information must be submitted to support the adjustment. This volume adjustment for inventory should be included with the terminal opening inventory on the April 30, 2007 period end generic fuel tax return.

For further information please contact TRA at (780) 427-3044. To obtain information toll-free when dialing long distance within Alberta, dial 310-0000 followed by (780) 427-3044.