and Revenue Administration
Special Notice Vol. 3 No. 12
||July 27, 2009
||Alberta Treasury Board and Finance,
Tax and Revenue Administration
|For more information:
Vol. 3 No. 12 /
ALBERTA TOBACCO TAX ACT SPECIAL
Bill 39 - Tobacco Tax Amendment Act, 2009
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 39 – the Tobacco Tax Amendment Act, 2009 - received Royal Assent on June 4, 2009. The Bill includes the tax rate changes effective April 8, 2009 described in Special Notice Vol. 3, No. 11, Tobacco Tax Increase dated April 2009. Except as noted below, changes are effective June 4, 2009.
Other major changes to the Tobacco Tax Act include:
- modified definitions of importer, retailer and wholesaler to ensure tax is properly paid and only legitimate participants are involved in the industry.
- expanded prohibitions including purchasing or selling tobacco for less than the combined federal and provincial tax, with some exceptions, and purchasing tobacco from an unauthorized seller.
- allowing prohibitions to apply where a person imports or sells tobacco without authorization. It is no longer required for a person to both import and sell the tobacco without authorization for prohibitions to apply.
- requiring the selling price used in the calculation of the taxable price of a cigar to be the price before any volume discount. The importer’s selling price is amended to be the greater of the price charged by the importer or the price charged by a non-arm’s-length party who purchased the cigars from the importer. Both of these provisions are effective April 8, 2009.
- for the Alberta Indian Tax Exemption program, the limit of 400 grams per week of tax-exempt tobacco has been adjusted to 400 cigarettes or tobacco sticks, or any combination of tobacco with an amount of tax equal to, or greater than, the amount of tax payable on 400 cigarettes or tobacco sticks. This change is effective April 8, 2009.
- clarified and more transparent administrative obligations, including:
- that taxes, penalties, interest and other amounts owing are collectible debts in a formal debt collection action,
- a tax collector is required to remit the tax collected, whether actually collected, or if the tax collector is deemed to have collected the tax, in accordance with the regulations.
- new collection measures, including the ability for the Minister to set off amounts owing to a person against an amount owing by that person, seize joint bank accounts in proportion to ownership for amounts in default, and demand records of parties related to, or associated with, a wholesaler, importer or retailer.
- fines doubled for violations of the act including an amount owing due to neglect, carelessness, wilful default, or fraud or evasion. Administrative penalties tripled if a person failed to collect and remit tax as required, or when a person purchases or possesses unauthorized black stock.
- the penalty for neglect, carelessness, wilful default, fraud or evasion is doubled from 25 per cent of the amount owing by a person to 50 per cent.
- a penalty for late filed returns has been introduced. The penalty is calculated as the greater of $25 for each day late and five per cent of any unremitted tax, to a maximum of $1,000.
- additional search and seizure measures; however, these provisions do not come into force until proclamation of the legislation. These measures include allowing officers to seize anything, including vehicles, used in contravention of the Act where the officer has reasonable and probable grounds. The property may be seized up to 60 days after the contravention.