Tax and Revenue Administration OLD Fuel Tax Act Special Notice Vol. 1 No. 19

Vol. 1 No. 19 / April 2006

ALBERTA FUEL TAX ACT SPECIAL NOTICE:
TAXABILITY OF KEROSENE

It has come to the attention of Alberta Finance, Tax and Revenue Administration (TRA) that Alberta fuel tax collectors may have been incorrectly selling clear kerosene without collecting Alberta tax.

Collectors are reminded that fuel tax is to be collected on fuel oil, other than that used by its owner in a locomotive. Fuel oil is any hydrocarbon usable for the generation of power in an internal combustion or turbine engine and includes kerosene.

Clear kerosene is taxable when a collector or bulk dealer sells it to a consumer. If the consumer uses the kerosene other than in an internal combustion or turbine engine, the person is eligible to claim a rebate of the tax paid. Examples of eligible use include heating or as fracturing fluid in the oil and gas industry.

When additives are mixed into clear kerosene making it unusable in an internal combustion or turbine engine, the resulting product may then also be eligible for a rebate of tax paid.

Alberta fuel tax collectors who have, in the past, sold clear kerosene without collecting Alberta tax should file a voluntary disclosure with TRA, Revenue Operations. Revenue Operations may be contacted at (780) 427-9412 (or call Alberta toll-free at 310-0000, then enter 427-9412).

The voluntary disclosure should include a covering letter setting out the circumstances, together with:

•  the amended returns, and

•  the Alberta tax due.

This information should be filed with TRA by May 31, 2006.