Tax and Revenue Administration OLD Fuel Tax Act Information Circular FT-2R4

FT-2R4 / November 2004

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - OIL MARKETING COMPANIES
AGENT AND AGENT-COLLECTOR RESPONSIBILITIES

This Information Circular sets out the agent's and agent-collector's responsibilities under the Fuel Tax Act. The topics discussed include:

• Invoicing Requirements (Sales of Clear Fuel)
• Fuel Tax Returns and Remittances
• Books and Records Retention
• How to Obtain a Refund

Invoicing Requirements

1. Invoices prepared for cardlock, keylock, or delivered bulk sales of clear fuel must include the rate per litre of fuel tax included in the selling price of the fuel and the amount in dollars of fuel tax charged. The invoice must also show the name and address of the seller, the name of the purchaser, the date of the sale, invoice number, type of fuel and quantity of fuel purchased.
   
   
2. This information is needed by purchasers who may later submit invoices as support documentation to claim fuel tax refunds for fuel used off­road. Incomplete invoices cannot be accepted, resulting in reduced refunds to the purchaser.

Fuel Tax Returns and Remittances

3. Fuel tax returns and fuel tax remittances must be received by Tax and Revenue Administration ("TRA") on or before the twenty-eighth day of the month following the month of collection. If the twenty-eighth day is a weekend day or a government holiday, then the due date is the next business day. Those agent or agent-collectors who require TRA to acknowledge receipt of their returns must enclose a stamped, self-addressed envelope with their returns.
   
   
4. Agents and agent-collectors must file Generic Fuel Collector Summary Forms (form FTD-Tax and FTG-Tax) monthly.
   
   
5. A person who has possession of, or control over, funds that are collected as taxes under the Act, holds those funds in trust for the Provincial Minister.  Taxes may be remitted by any of the following methods:

   a) mailed, delivered by courier or hand-delivered to TRA. Remittances should be made payable to the Minister of Finance and accompanied by a Remittance Advice. The effective date of receipt of a mailed or delivered remittance is the date on which it is actually received by TRA. Remittance s mailed or couriered to TRA should be sent with adequate lead-time to ensure receipt on or before the due date. If hand-delivered, they should be taken to one of the Alberta Finance offices listed on this circular between, the hours of 8:15 a.m. and 4:30 p.m., Monday to Friday, except government holidays.

   b) at most financial institutions in Canada, if accompanied by a Remittance Advice. The effective date of receipt is the business day stamped on the Remittance Advice by the institution.

   c) by wire transfer. T he effective date of receipt is the business day that the funds are received by TRA's bank. For more information on this option, contact TRA at (780) 427-3044 or 310-0000 / (780) 427-3044 (Alberta toll free).

   d) through internet payment services provided by major financial institutions in Canada. The effective date of receipt is the date that TRA's account is credited. The earliest possible effective date is the next business day. For further details on this option, contact your financial institution or call TRA at the above number. 

6. If a return is received late and payment is deficient, interest will be charged on the amount not paid. The interest rate used is the same as the debit interest rate calculated for purposes of the Alberta Corporate Tax Act.

   Click here for current interest rates or contact TRA.

7. Agents and agent-collectors who do not collect and remit fuel tax as and when required under the Fuel Tax Act may be assessed an amount equal to the tax not collected, and additional penalties and interest.

Books and Records Retention

8. Certain records are to be retained by fuel agents and agent-collectors for a period of four years from the end of the calendar year to which the records and books of account relate. Records may be destroyed after this period, unless TRA has formally specified that records be kept for a longer period. Records may only be destroyed before the end of the required retention period if written permission is received from TRA.
   
   
9. Books and records, including supporting documentation, should be kept at the agent's or agent-collector's place of business or residence in Alberta unless approval is received from TRA to locate the records elsewhere in Canada or outside the country.
   
   
10. If an agent or agent-collector has received permission to keep its records outside of Canada, it must, upon TRA's request and at its own cost, forward the records, books and supporting documentation to TRA or a business location in Canada, or arrange to have TRA's audit staff visit at the location of the records and books. In the latter instance, the agent or agent-collector will be responsible for absorbing the incremental costs incurred in sending auditors outside Canada.
    
    
11. The type of records and books of account which must be retained for the four year period noted in paragraph 8 above include:
    
    
    • purchase records for fuel (purchase orders, exchange agreements, meter tickets and invoices from suppliers);
      
      
    • inventory measurements (dip measurements and tank capacities on at least a monthly basis);
      
      
    • sales records (invoices to customers, accounts receivable statements or ledgers and bank statements);
      
      
    • record of exemption and registration numbers;
      
      
    • copies of the "Rebrand Notification" forms (form AT376) to rebrand product;
      
      
    • records of intercompany transfers, including those between jurisdictions, import and export records and related documentation;
      
      
    • computer records of any/all of the above and additional computer files and records used for the preparation of, or as an information source for, the tax return, including a copy (i.e., backup on tape or diskette) of any program used to create, maintain and review these records.

How to Obtain a Refund

12. Refunds or adjustments of Alberta fuel tax may be claimed on clear, tax-paid fuel sold and delivered to customers located outside the province of Alberta and who will consume this fuel outside the province of Alberta. A "Fuel Sales, Transfers or Exchanges Outside of Alberta -- Schedule D" (form FTD3 or FTG3) must be filed with the monthly return to obtain a refund for interprovincial exports. See Information Circular FT-1 for further details on Export Sales - Interprovincial.
    
    
13. Alternatively, agent-collectors engaged in major export activities involving U.S. customers may make arrangements that do not require the customer to pay the fuel tax at the time of loading. See Information Circular FT-1 for further details on Export Sales - International.
    
    
14. Where fuel tax has been remitted on aviation fuel or fuel oil delivered to a retailer or bulk dealer that is subsequently destroyed in a natural disaster, accident, or fire; is lost due to tank rupture or theft; or is contaminated by being mixed with another type of fuel oil before being sold to a consumer, a refund of tax may be claimed. These types of refund claims must be supported by:
    
    
    • the police or fire department's report as proof that the incident was reported to the appropriate authority;
      
      
    • confirmation from the retailer's or bulk dealer's insurance company that a claim has been made in respect of the loss; and
      
      
    • a brief description of the incident and the method used to determine the volume of fuel lost (e.g., inventory records, shipping bills, etc.).

    For fuel contamination, such as a mixture of gasoline and diesel fuel, the tax refund must be claimed by the collector or independent bulk dealer. If the contaminated product is sold to the carrier who caused the contamination, tax must not be included in the price, since the carrier would not be able to claim a refund.

15. Where fuel tax has been remitted on aviation fuel or fuel oil sold to a fuel reseller, and the agent or agent-collector fails to collect the tax from the reseller in spite of the agent or agent-collector's best efforts to do so, the agent or agent-collector may file a refund claim to recover the taxes. These types of refund claims must be supported by:
    
    
    • the collector's sales invoices; and
      
      
    • ledger cards or accounts receivable statements;

      and one of the following:

    • the Notice of Bankruptcy from the trustee, in a bankruptcy;
      
      
    • a Notice to Creditors from the receiver, in a receivership; or
      
      
    • a brief description of collection action taken to recover the receivable from the insolvent firm, in an insolvency other than a bankruptcy or receivership, and the date the receivable was written off.
      
      
16. TRA must be notified of the loss leading to a claim under paragraph 14 or 15 within 30 days of the date an agent or agent-collector first becomes aware of it. The refund claim must be received by TRA within 90 days of the date the loss is first discovered. If TRA has not been notified within 30 days of the date of the loss discovery, a request for refund will be processed only if Alberta Finance is satisfied the delay did not compromise its ability to recover the tax from a third party.
    
    
17. An agent or agent-collector is deemed to have become aware of the loss on the earliest of the following dates:
    
    
    • the date the destruction or theft of fuel was discovered,
      
      
    • the date a Notice of Bankruptcy or Notice to Creditors was received, or
      
      
    • the date the agent or agent-collector made the accounting entries claiming the related receivable as a bad debt for income tax purposes.
      
      
18. If a refund of fuel tax has been paid, and the agent or agent-collector subsequently recovers all or part of the loss, then the agent or agent-collector must repay the pro-rated portion of the amount recovered to Alberta Finance.
    
    
19. Agents and agent-collectors must retain all original documentation, reports and records for audit by TRA for the prescribed period (see paragraph 8 above).