and Revenue Administration
Special Notice Vol. 3 No. 13
||January 5, 2011
||Alberta Treasury Board and Finance,
Tax and Revenue Administration
|For more information:
Vol. 3 No. 13 /
ALBERTA TOBACCO TAX ACT SPECIAL
TOBACCO TAX AMENDMENT REGULATION
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.
The Tobacco Tax Amendment Regulation (the Regulation) was approved by the Lieutenant Governor in Council on November 24, 2010. The regulation comes into effect on January 1, 2011, with a number of provisions.
- Background checks are allowed on anyone applying to become a tobacco wholesaler, importer, exempt-sale retailer, or other participant in the tobacco tax collection process.
- The background check provision also applies to applicants, directors, officers, employees, contractors, and those not dealing at arm’s-length with the applicant.
- Tax and Revenue Administration (TRA) will generally use background checks to determine if the applicant has ever contravened a tax law.
- TRA may refuse the application of anyone wishing to register as an exempt-sale retailer if the applicant has contravened a tax law in Alberta or another jurisdiction, is believed to be dishonest, or would be a detriment to the integrity of the tobacco industry in Alberta.
A tax collector, licensed importer, licensed wholesaler, exempt-sale retailer, duty-free shop, marking permit holder, or tear tape producer is required to notify TRA in writing if there is a significant change in the business, such as:
- the person is involved in bankruptcy, insolvency, or receivership proceedings;
- a corporation has amalgamated with another corporation, wound up, liquidated, dissolved, or is involved in proceedings under the Companies’ Creditors Arrangement Act (Canada);
- a change in partners in a partnership;
- a sale, assignment or transfer of the part of the business carrying out the activities authorized by a license, registration, permit or appointment under the Tobacco Tax Act (the Act), and this change results in a change in control of the business;
- a substantial change in the core management or operations of the part of the business for which that person has been issued a license, permit, registration or appointment; or
- the person ceases to carry out the part of the business for which that person has a licence, permit, registration or appointment.
OTHER ALBERTA INDIAN TAX EXEMPTION (AITE) CHANGES
- TRA may cancel the registration of an exempt-sale retailer if the retailer denies TRA access to the business premises or the location at which tax-exempt sales are made by the retailer.
- TRA can also cancel or suspend the registration of an exempt-sale retailer if the retailer has breached a tax law in Alberta or another jurisdiction, is believed to be dishonest, or would negatively affect the integrity of the tobacco industry in Alberta. This also applies to directors, officers, employees, contractors or anyone not dealing at arm’s-length with the registrant.
- Any person issued an AITE card is not allowed to sell or give the card to anyone else, or to allow someone else to use the card. Also, no one is allowed to have or use an AITE card that belongs to someone else.
- TRA may cancel or declare invalid an AITE card believed to have been sold to, in the possession of, or being used by a person, unless:
- the person is an authorized representative of an Indian band,
- the person is using the ministerial identification card to purchase tobacco for, and on behalf of, an Indian band, and
- the person and the Indian band comply with the conditions placed on the AITE card.
- An AITE card issued to an Indian band cannot be given to another person. Neither is the band allowed to let another person use the card, unless the person:
- is an authorized representative of the Indian band,
- is using the AITE card to purchase tobacco for, and on behalf of, the Indian band, and
- the person and the Indian band comply with any conditions placed on the AITE card by TRA.
- TRA can issue a replacement card if it finds that a card should not have been cancelled or declared invalid.
- Exempt-sale retailers are required to report tax-free sales weekly to TRA through the electronic Point of Sale System (POSS). TRA will require all new AITE retailers to go on POSS. Grandfathering treatment will be provided to existing stores for the time being, except where the store has a change in ownership. In this case, a new AITE retailer application will be required and the store will have to submit refund applications through POSS.
- The Act allows an officer to seize any item, including a vehicle that the officer reasonably believes is used in contravention of the Act. On seizure, the officer has to either initiate a prosecution or return the item, as required by the Regulation.
- The Regulation requires that seizure costs be paid by the property owner before an item will be returned.
- If the item seized is a vehicle, seizure costs are a lien on the vehicle and payable as a debt owing to the Crown by the owner of the vehicle.
- If a vehicle is seized from someone other than its owner, the owner is required to pay the seizure costs for that vehicle. The owner may claim the seizure costs directly against the person who was in possession of the vehicle at the time of the seizure.
- An officer or a judge may waive all or part of the seizure costs for a vehicle or other items if the officer or judge is satisfied injustice or great hardship will result from the payment of the costs. The Crown will pay any seizure costs that are waived by an officer or a judge.
- Unless seized in error, no tobacco will be returned to the person from whom it was seized or to any other person.
- When a seized item is to be returned to the person from whom it was seized, the officer is required to send a notice to the person. If the item to be returned is a vehicle seized from someone who is not the owner, notice is to be personally served on, or sent by registered mail, to the owner of the vehicle.
- If neither the person from whom the property was seized nor the owner of the property pays the seizure costs and reclaims the seized item within fifteen days of the receipt of notice, the item is considered abandoned. An officer is required to provide the person, or owner, with a notice of abandonment by personal service or registered mail.
- The person, or owner, has fifteen days after receipt of the notice of abandonment to pay the seizure costs or lose the item to the Crown.
- If the item seized is a vehicle, unless served personally, the notice must be sent by registered mail to the owner’s last address listed in the records of the Registrar under the Traffic Safety Act.
A late filing penalty was added to the Act in 2009. Interest is now required to be paid on any unpaid late filing penalty.