and Revenue Administration
Fuel Tax Act
Special Notice Vol. 1 No. 38
||February 2, 2016
||Alberta Treasury Board and Finance,
Tax and Revenue Administration
|For more information:
Vol. 1 No.
38 / February 2016
BILL 4 - FUEL TAX AMENDMENTS
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.
Bill 4, An Act to Implement Various Tax Measures and to Enact the Fiscal Planning and Transparency Act, received Royal Assent on December 11, 2015. The bill included various amendments to the Fuel Tax Act (the Act), as explained below.
Tax Rate Increases
Section 11(1) of the Act was amended to increase the fuel tax rates effective March 27, 2015, as previously set out in Special Notice Vol. 1 No. 36. The current rates are:
- Gasoline and diesel: $0.13 per litre
- Liquefied petroleum gas (propane): $0.094 per litre
- Renewable diesel and renewable alcohol: $0.13 per litre
- Other prescribed fuels, including bunker fuel, kerosene, methanol and condensate, when used to generate motive power by means of an internal combustion or turbine engine: $0.13 per litre
Section 11(1) was further amended effective November 1, 2015 to increase the locomotive fuel tax rate to $0.055 per litre.
The rate for aviation fuel has not increased and remains at $0.015 per litre.
As explained in Special Notice Vol. 1 No. 36, effective March 27, 2015 the exemption of tax on marked fuel, including the exemptions provided under the Tax Exempt Fuel User (TEFU) and Alberta Farm Fuel Benefit (AFFB) programs administered by Alberta Treasury Board and Finance, Tax and Revenue Administration (TRA), have been capped at $0.09 per litre. Therefore, gasoline and diesel used in unlicensed vehicles and equipment that was previously tax-out for eligible off-road activities, farming operations or for use in licensed farm vehicles, is now effectively taxed at $0.04 per litre.
Various sections of the Act have been amended to reflect the cap on the exemption of tax on marked fuel, as marked fuel is no longer fully exempt from tax, but rather is now “partially exempt” from tax. Certain definitions under section 1 have been added or clarified and certain exceptions under section 4(3) have been repealed as they are now redundant. Section 8 was restructured in order to distinguish between clear fuel and marked fuel, and to clarify the respective requirements for exemption or partial exemption.
As the exemption of tax on marked fuel has been capped, as explained above, various sections relating to the calculation of tax owing on rebranded fuel or the tax recovery of rebranded fuel have been clarified.
Payment by Third Party
Section 34 provides the President of Treasury Board and Minister of Finance (the Minister) with the authority to garnish money payable by a third party (such as a financial institution) to a tax debtor. Therefore, the Minister may seize bank accounts of tax debtors in order to recover tax and other amounts owing to the Crown. Consistent with similar provisions in other tax legislation, section 34 was amended effective December 11, 2015 to authorize the Minister to seize a tax debtor’s portion of a joint payment, such as a payment due jointly to both the tax debtor and another person. It is assumed that the joint payment is split equally, although the Minister, tax debtor, or a person owed jointly with the tax debtor has the right to apply to the Court of Queen’s Bench of Alberta for an order dividing the payment otherwise.
Direct Appeal to the Court
Section 38 permits a taxpayer, with the consent of the Minister, to waive the right to have a tax dispute considered by the Minister and instead appeal the matter directly to the Court of Queen’s Bench of Alberta. The section was amended effective December 11, 2015 to clarify that the taxpayer is the one responsible for instituting the appeal subsequent to receiving the Minister’s consent.
For consistency with other legislation and current administrative practice, section 41 was amended effective December 11, 2015 to clarify that a taxpayer institutes an appeal by filing a notice of appeal with the clerk of the Court of Queen’s Bench of Alberta and serving a copy of the filed notice of appeal, including a copy of the underlying notice of objection, on the Minister.
Offence Exemption for Crown Employees and Officers
In the course of enforcing the Act, government employees and officers may engage in activities that otherwise may be offences under the Act, for example, while engaging in an undercover operation. Consistent with other tax legislation, section 61.1 was added to the Act to exempt from prosecution government employees and officers who contravene the Act while carrying out powers and duties in the course of investigations or undercover operations related to the enforcement of the Act.
Electronic Communication of Information
Various sections of the Act, including 65 and 65.1, have been updated or added effective December 11, 2015 to enable TRA to communicate electronically with taxpayers, as well as to clarify the date an electronic transmission is presumed to be sent to and received by a taxpayer.
TRA’s proposed process is to send an email to taxpayers, who can then view and print their notices of (re)assessment using Tax and Revenue Administration Client Self-Service (TRACS), a secure online system for authorized taxpayers to conveniently conduct business with TRA. Adequate notice will be provided to taxpayers before this proposed process is implemented. Additional information on the various services available on TRACS, such as accessing financial information and viewing account balances is provided on our website at http://finance.alberta.ca/tracs/index.html.
Consistent with changes made by the federal government to the Income Tax Act (Canada) in recent years, consequential amendments have been made throughout the Act to replace, for example, the phrase “mailed to the person or otherwise communicated” with the word “sent”, in order to encompass a broader range of forms of communication.