Tax and Revenue Administration Tourism Levy Act Information Circular TL-2R3

TL-2R3 / October 2008

NOTE: This information circular 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 information circular and governing legislation, the legislation takes precedence.

ALBERTA TOURISM LEVY ACT INFORMATION CIRCULAR:
RESPONSIBILITIES OF OPERATORS PROVIDING ACCOMMODATION

This Information Circular explains the responsibilities of operators under the Tourism Levy Act (“the Act”). Operators are those who sell, offer for sale or otherwise provide accommodation in Alberta. The topics in this circular include:

• Registration
• Changes in Operations
• Changes in Ownership
• Collecting the Tourism Levy
• Filing Returns
• Remitting the Tourism Levy
• Late Filing Penalty
• Refunds
• Maintaining Records

Registration

1. Under the Act, an operator must register with Alberta Finance, Tax and Revenue Administration (TRA), by completing and submitting the Tourism Levy Registration (form AT4827). The registration form is available on our website or by contacting TRA.
   
   
2. Register each location where lodging is provided. When registered, each establishment is assigned a unique tourism levy account number that includes an account and occurrence number. Use this account number on all returns, remittances and correspondence with TRA.
   
   
3. TRA may refuse to register you if, in the opinion of the Minister, you have contravened the Act or regulations or have a director, officer or employee who has contravened the Act or regulations. The Minister may also turn down the registration if you are dealing not at arm's length with another person whose registration under the Act has been suspended, cancelled or declined.
   
   
4. TRA notifies you in writing of its decision. If your registration under the Act has been turned down you may file a Notice of Objection. Refer to Information Circular TL-3, Administration.
   
   
5. If your registration under the Act has been suspended or cancelled you may not sell, offer for sale, or otherwise provide accommodation in Alberta, until the suspension has ended or the registration has been reinstated.

Changes in Operations

6. You must immediately advise TRA, in writing, of any of the following:
   
   
   • new business locations;
   • changes in the nature of the business (e.g., from a seasonal operation to a year-round operation);
   • temporary business closures (e.g., for renovations);
   • changes in the legal or operating name, or business address;
   • business closure (generally, or at a particular location); or
   • changes in the ownership of the business.

Changes in Ownership

7. If an operation changes ownership, the new owner is required to apply to TRA for registration under the Act.
   
   
8. As the previous owner, you are responsible for ensuring all tourism levy returns have been filed and the tourism levy paid. You should also submit a written request to TRA for a clearance certificate to confirm all returns have been received and no tourism levy liabilities are outstanding.
   

Collecting the Tourism Levy

9. Collect and remit the tourism levy on the purchase price paid for accommodation to which the levy applies at the time the purchase is made or, in the case of ongoing maintenance fees for prepaid vacation packages, when the maintenance fees are paid. You are responsible for collecting the levy, as required, otherwise TRA will assess you for the unpaid levy.
   
   
10. If, as an operator, you participate in a rewards points or loyalty program, charge tourism levy on the actual payment received by you.  When compensation is received from the franchisor, head office or a third party such as the loyalty program administrator, the tourism levy is considered to be included in the compensation amount.
    
    For example, if you receive $80 compensation from the franchisor, head office or a third party such as a loyalty program administrator; the tourism levy is the amount you received multiplied by 4 per cent (tourism levy), divided by 104 per cent, or $3.08.  If you charge the consumer an amount in addition to the redemption of the reward points or loyalty program, add 4 per cent to the amount charged.  If the consumer redeems the points and you did not receive any additional compensation, there is no tourism levy.
    
    
11. If you collect, or are deemed to have collected, the tourism levy you may be required to deposit the levy you collected into an account, or a trust account, in the name of the Minister of Finance. This is required when there is reason to believe the required tourism levy made not be paid to TRA.

Filing Returns

12. You are required to file a Tourism Levy return for each collection period, based on the number of sleeping rooms in each establishment. An establishment is each location where you are providing lodging. Collection periods are:
    
    
    • for operators with 50 or more sleeping rooms, each calendar month; or
    • for operators with fewer than 50 sleeping rooms, the three-month periods ending: March 31, June 30, September 30 and December 31.
      
      
13. If you have more than one establishment you may group all the sleeping rooms in your establishments together to determine their collection period. If you would like a different collection period, write to TRA. TRA will advise you of its decision.
    
    
14. The tourism levy return is available on the Alberta Finance website, Tax and Revenue Administration Client Self-service (TRACS) secure online system, or by contacting TRA.
    
    
15. TRA must receive the tourism levy return on, or before, the 28th day after the end of a collection period. If the due date is a weekend or government holiday, the return is due on the next business day.
    
    
16. Unless notified by TRA, in writing, that no return is required, you are to file a return even if you did not offer any accommodation for sale or none was purchased during the collection period.

You may file the return required under the Act by:

• submitting the return to TRA online, using the TRACS secure online system;
• mailing it to TRA (provide adequate time for TRA to receive the return by the due date);
• couriering the return to TRA's office (allow adequate time for receipt by TRA);
• hand delivering the return to TRA's offices;
• faxing the return to TRA; or
• filing the return with TRA using IVR (Interactive Voice Response).

(TRACS is a secure online system providing authorized individuals with an alternative means to conduct business with TRA. For more information about the services available on TRACS, please visit the site.

Remitting the Tourism Levy

17. Payment of the tourism levy, along with the Remittance Advice, must also be received by TRA on or before the 28th day after the end of a collection period. Attach the Remittance Advice to the preprinted returns sent to registered operators by TRA. If the payment due date is a weekend or government holiday, the payment is due on the next business day.
    
    
18. You may pay the tourism levy by any of the following methods:
    
    
    1. through internet payment services provided by major financial institutions in Canada. The effective date of receipt is the date TRA's account is credited. The earliest possible effective date is the next business day. For details on this option, contact your financial institution or call TRA at the above number.
       
       
    2. make the levy payable to the Minister of Finance and mail, deliver by courier or hand-deliver it to TRA. The levy is considered received on the date it is actually received by TRA; therefore, mail or courier the payment to TRA with adequate lead time to make sure it is received on, or before the due date. You may hand-deliver payments by taking them to one of the TRA offices listed on the bottom of the first page of this circular, between the hours of 8:15 a.m. and 4:30 p.m., Monday to Friday, except government holidays.
       
       
    3. at most financial institutions in Canada, if accompanied by an original Remittance Advice. The effective date of receipt is the business day stamped on the Remittance Advice by the financial institution.
       
       
    4. by wire transfer. The effective date of receipt is the business date 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).
       

    If a payment is late or insufficient, interest is charged on the unpaid balance.

Note: a return is required to be filed with TRA even if the levy has been remitted.

Late Filing Penalty

19. If you do not file a return on or before the due date required you may receive a significant filing penalty. As of January 1, 2006, the late filing penalty on late Tourism Levy returns is:
    
    
    1. for a return up to, and including, four days late, $25 per day.
    2. for any return more than 4 days late, the lesser of $25 per day or the unpaid levy at the required filing date, with a minimum of $100 (regardless of the unpaid levy) and a $1,000 maximum.

Refunds

20. A refund of paid tourism levy is available to operators where the accommodation was purchased on credit and all, or a portion of, the amount of the debt for the purchase has become a bad debt.

A “bad debt” is a debt to an operator that has become uncollectible, but was included in calculating the income of an operator for the current or a preceding year for purposes of the Income Tax Act (Canada ).

A debt is uncollectible when you have:

• has exhausted all efforts to collect the debt reasonably expected to be made by a creditor if the creditor was dealing at arm's length with a debtor, and
• in the bankruptcy or receivership of a debtor, filed a claim with the trustee or receiver that includes the amount of the tourism levy, shown separately.

21. If applying for a refund, include invoices and any other records and evidence required to prove the claim and determine the amount of the levy paid and the amount to be refunded.
    
    
22. TRA must receive the application within one year after the earlier of:
    
    
• the date a notice of bankruptcy or notice of the appointment of a receiver was received by you, or
• the date you wrote off the debt as a bad debt in your books of account.
  
  
23. If, in the opinion of TRA, an applicant has misrepresented a material fact, TRA will not accept the application or provide a refund.

Maintaining Records

24. Operators are required to keep records and books of account containing information necessary to determine the amount of the tourism levy required to be collected and remitted. You may be liable to penalties if you do not maintain records as described in Information Circular TL-3, Administration.
    

25. Keep records for a period of four full years from the end of the calendar year in which the records were created. TRA may require records to be kept for a specified time beyond this period. Records to be retained include:
    
    
    • a copy of the invoice for the rental of accommodation you provided to the purchaser of the accommodation. On the invoice show the purchase price and the amount of the tourism levy separately.
    • guest registers or registration cards.
    • tour or block booking contracts or agreements.
    • revenue-reporting summaries and documents to support all revenue exempt from the levy.
    • financial statements and supporting notes or schedules.
    • long-term room rental or lease agreements.
      
      
26. If room rental charges include meals or other services, retain schedules detailing room charge rates, meals and other applicable service charges.
    
    
27. If providing accommodation free of charge to persons performing services for you, retain copies of the applicable contracts and the room charge rates for similar accommodation made available to other persons on the same day(s).
    
    
28. Keep records at your place of business or a residence in Alberta unless you have received written permission from TRA to keep them at another location.