and Revenue Administration
OLD Fuel Tax
Information Circular FT-1R2
|| Alberta Finance, Tax
and Revenue Administration
|For more information:
FT-1R2 / June
Note: Due to the
Government of Alberta reorganization in November 2004, where applicable,
the web versions of our documents have been updated to change references
from "Minister of Revenue" or "Provincial Treasurer"
to "Minister of Finance". References to "Revenue Canada"
or "Canada Customs and Revenue Agency" have been changed to
"Canada Revenue Agency" to reflect that name change as well.
The paper version of this document is available from Tax
and Revenue Administration and if applicable, will be updated as time
ALBERTA FUEL TAX ACT
INFORMATION CIRCULAR - OIL MARKETING COMPANIES
OVERVIEW OF FUEL TAX
This information circular gives an overview of the Alberta fuel tax. The topics
- Every consumer of fuel oil, whether the fuel oil is purchased in Alberta or received in
Alberta, must pay fuel tax unless specifically exempted by legislation (see
"Exemptions from Fuel Tax" section). The consumer pays the tax to the retailer
as part of the purchase price of the fuel. The seller of the fuel normally pays an amount
equal to the tax to the supplier as part of the purchase price of the fuel.
- Agent-collectors are appointed by Alberta
Finance, Tax and Revenue Administration
("TRA") to collect fuel tax on all fuel oil sold in or delivered into Alberta.
Agent-dealers are also appointed by TRA and are authorized to dye fuel in certain
circumstances and deal in marked, tax-exempt fuel (see paragraphs 11 and 12). Businesses
that are appointed as both agent-collectors and agent-dealers are referred to as agents.
Persons wishing to become agents, agent-collectors or agent-dealers must apply to TRA.
- In cases where the applicant's financial strength is considered to be inadequate, TRA
requires the applicant to provide security prior to being appointed as an agent or
agent-collector. The security required is equal to three times the estimated monthly tax
- All approved applicants must sign an agreement with TRA which formalizes their
appointments and sets out their duties and obligations with respect to the collection of
- Fuel tax is payable on all fuel oil and aviation fuel purchased in Alberta or delivered
into Alberta. Fuel oil is defined as fuel capable of being used to generate power in an
internal combustion engine or a turbine engine other than a locomotive or an aircraft.
Aviation fuel includes both aviation gasoline and jet fuel.
- Ethanol and methanol that is included in mixed fuel is not considered to be fuel oil and
is not taxed under certain conditions. See Information Circular FT-5
- Propane is taxed when dispensed from a system capable of filling a vehicle. The FTP
series of information circulars provide information on the taxation of propane.
- Fuel tax is payable on locomotive fuel used in Alberta, and is calculated and remitted
by the railway companies. The railway companies buy their locomotive fuel tax-out.
- Ultimately the consumer is the one who pays the tax. However, sales to anyone other than
another agent, agent-collector or railway must be made tax-in. Bulk dealers and service
station operators must pay the tax amount on all clear fuel oil purchased and will recover
this tax when the fuel is sold to the consumer.
- Agents and agent-collectors must collect the tax and remit it to TRA (see Information Circular FT-2).
- Marked fuel is fuel that has been coloured or identified by injecting a dye into the
fuel. Only authorized persons are permitted to dye fuel -- e.g. terminals, agent-dealers.
Bulk fuel dealers are only given authorization to dye fuel in the event of a product mix
between clear and marked fuel. The authorization to dye fuel is usually provided in the
agreement between the Provincial Treasurer and the agent or agent-dealer.
- Marked fuel is exempt from fuel tax and can be sold only by persons who have entered
into an agreement with the Provincial Treasurer to handle marked fuel. Agents can sell
marked fuel only to agent-dealers or to consumers who provide an approved fuel tax
exemption number or Alberta Farm Fuel Benefit registration number (see
BD series of Information Circulars for further details).
Export Sales -
- An agent-collector is permitted to sell clear fuel without adding the Alberta fuel tax
if the fuel is delivered to a customer located outside Alberta and is for use outside
Alberta. To be sold on a tax exempt basis, the fuel must be delivered by the
agent-collector or by an independent common carrier to the location outside Alberta. If
the customer is not an appointed fuel tax collector for that jurisdiction, the tax of the
jurisdiction to which the fuel is delivered must be charged to the customer and remitted
to that jurisdiction.
- If an independent common carrier delivers the fuel, the agent-collector must obtain a
bill of lading. It must be signed by the agent-collector as shipper and by the customer.
It must state the amount and type of fuel consigned to the carrier and the delivery
location. Invoicing documentation must show that Alberta fuel tax was not charged.
- Alberta Revenue may require agent-collectors to produce bills of lading supporting tax
Export Sales - International
- The guidelines set out above for interprovincial sales also apply to international
sales. In addition, an agent-collector may sell fuel on a tax exempt basis to a U.S.
customer if the U.S. customer transports the fuel and if the agent-collector receives an original "Entry Summary Form" (form 7501). The Entry Summary Form must:
a) bear an original U.S. Customs Department stamp and original signature for each truck
load of product lifted; and
b) include volume, product and bill of lading or ticket number as stated by the U.S.
The agent-collector must obtain the Entry Summary Form by the end of the month
following the month in which the product was lifted. If the agent-collector fails to
obtain an original Entry Summary Form, he will be liable for the Alberta fuel tax which
would otherwise have been payable on the fuel lifted. The original Entry Summary Form
should be retained for audit purposes.
- If a U.S. customer purchases gasoline or diesel fuel from a bulk dealer for use outside
of Alberta, the customer may claim a refund of Alberta fuel tax. The refund claim must be
supported by one of the following:
a) a copy of the bill of lading covering the transport of the fuel by a carrier;
b) a copy of the fuel tax return for the jurisdiction of destination which includes the
fuel transaction; or
c) an original "Entry Summary Form" (form 7501) containing the
information set out above to claim a refund of Alberta fuel tax.
- For both interprovincial and international deliveries, agent-collectors are required to
complete the "Fuel Sales, Transfers or Exchanges Outside of Alberta" (form FTD 3
or FTG3). This form must be submitted to Tax and Revenue Administration with the monthly
fuel tax return to support tax exempt sales.
Sales to the Government of Canada
- Fuel paid for directly by the Government of Canada (not by a government employee) is not
subject to fuel tax. The Government of Canada includes all government departments, and a
number of agencies and Crown Corporations. In order to ensure that the purchaser of the
fuel is included in the definition of the Government of Canada, a collector must obtain an
exemption certificate in the following form:
"This is to certify that the fuel ordered/purchased hereby is being purchased by
Name of Department, Agency or Corporation
which is part of the Government of Canada or is a tax-free Government of Canada
agency, and is therefore not subject to Alberta fuel tax."
- The certification must be obtained on the purchase order, contract, or invoice relating
to the fuel purchased. Any fuel sold to a purported government entity that did not produce
an exemption certificate is taxable.
Alberta Indian Tax Exemption
- Eligible Indians and Indian bands in Alberta can purchase fuel exempt from the
provincial tax, when such purchases are made at registered retail businesses located on
Alberta Indian reserves or from registered bulk dealers who deliver to reserves.
Registered retailers buy the fuel tax-in and obtain a refund from TRA of the tax on the
qualifying sales. For further information about this program, refer to the AITE series of information circulars.