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Tax and Revenue Administration
Fuel Tax Act
Special Notice Vol. 1 No. 32


Released: March 28, 2011
Produced by: Alberta Treasury Board and Finance, Tax and Revenue Administration
For more information: tra.revenue@gov.ab.ca

Vol. 1 No. 32 / March 2011

FUEL TAX ACT SPECIAL NOTICE:
FUEL TAX AMENDMENT REGULATION - TAXATION OF RENEWABLE FUELS

NOTE: This special notice 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 special notice and governing legislation, the legislation takes precedence.

The Fuel Tax Amendment Regulation(the Regulation) incorporates changes that support implementation of the Alberta Renewable Fuels Standard (RFS).  The Regulation was approved on March 10, 2011 and the changes come into effect on April 1, 2011, to coincide with the RFS implementation date.

Definitions

The definitions of biodiesel and ethanol have been removed and replaced by reference to the definitions of renewable diesel and renewable alcohol in the RFS Regulation.  The new definitions are:

  • “renewable diesel” means fuel produced from one or more renewable fuel feedstock types, and meets the requirements:
    • of ASTM International Standard ASTM D6751, Standard Specification for Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels, or
    • set out in a standard of ASTM International or the Canadian General Standards Board. 

Additives that account for not more than one per cent total of the volume of the fuel are included.

  • “renewable alcohol” means fuel produced from one or more renewable fuel feedstock types, and meets the requirements:
    • for ethanol set out in ASTM International Standard ASTM D4806, Standard Specification for Denatured Fuel Ethanol for Blending with Gasolines for Use as Automotive Spark – Ignition Engine Fuel,
    • for ethanol set out in National Standard of Canada CAN/CGSB 3.511, Oxygenated Unleaded Automotive Gasoline Containing Ethanol, or
    • set out in a standard of ASTM International or the Canadian General Standards Board.

Any denaturant in the fuel is included.  Also, any other additive that accounts for not more than one per cent total of the fuel volume is included.

The revised definition of refinery includes a facility in Alberta where a product is manufactured or refined from crude oil, bitumen or another petroleum substance into fuel, and a renewable fuel production facility in Alberta.

The Regulation also added the following new definitions:

  • “denaturant” is a mixture of hydrocarbons that
    • has an end boiling point of less than 225 degrees Celsius,
    • is added to a renewable alcohol to make it unsuitable for use as a beverage but not unsuitable for use in gasoline or diesel engines, and
    • does not exceed a volume of 4.76 per cent of the total renewable fuel volume when combined with the mixture of hydrocarbons;
  • renewable fuel” refers to either renewable alcohol or renewable diesel;
  • a “renewable fuel producer” owns or operates a renewable fuel production facility in Alberta; and
  • a “renewable fuel production facility” is a facility in Alberta, designated as such by Tax and Revenue Administration (TRA) on behalf of the Minister, where renewable fuel is produced, manufactured, or refined.

Allowable Tax-out Transactions

Recognizing the complex movement of fuel before it enters the distribution stream, the transactions exempt from taxation were revised to facilitate the blending of renewable fuel and non-renewable fuel at the refinery level.  No tax is payable when:

  • fuel is rebranded at a refinery or terminal;
  • fuel is purchased before it is removed from a refinery or terminal;
  • fuel, other than renewable fuel, is removed from a refinery or terminal and delivered to another refinery, other than a renewable fuel production facility, or a terminal;
  • renewable fuel is removed from a refinery or terminal and delivered to another refinery or terminal;
  • renewable fuel is purchased in Alberta by a renewable fuel producer from another renewable fuel producer or from a full direct remitter; or
  • renewable fuel is imported into Alberta for delivery to a renewable fuel production facility.

Non-renewable fuel imported to a renewable fuel production facility is not included in the above tax-out transactions.

Although tax may not be payable at the time a particular transaction is made, it is usually payable later, either in the next calendar month as described below, or when a subsequent transaction triggers the tax, such as when the fuel leaves the refinery or is sold to someone other than a full direct remitter or renewable fuel producer.

Direct Remitters

The criteria for a full direct remitter have been revised to clarify that renewable fuel producers are considered activity-based direct remitters, not full direct remitters.

Tax Remittance

A full direct remitter or renewable fuel producer who purchases fuel tax-out is required to remit the tax payable on the fuel purchases so that it is received by TRA no later than 28 days after the end of the calendar month in which the fuel purchases were made.  However, tax on fuel purchases does not need to be remitted for fuel still in inventory at the full direct remitter’s refinery or terminal, or the renewable fuel producer’s renewable fuel production facility, at month-end.

Returns

Full and activity-based direct remitters are required to file monthly returns, whether or not operations or activities occurred in that month. These returns must be received by TRA no later than 28 days after the end of the calendar month. 

TRA may establish a threshold for direct remitters who engage in specific operations or activities to file on a quarterly, rather than a monthly, basis.  These quarterly returns must be received by TRA no later than 28 days after the end of each calendar quarter.  To date, no threshold has been established.   


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