and Revenue Administration
Information Circular PRO-1
||September 30, 2003
||Alberta Treasury Board and Finance,
Tax and Revenue Administration
|For more information:
PRO-1 / September
ALBERTA FUEL TAX ACT
PROPANE RETAILERS -
OVERVIEW OF FUEL TAX ON LIQUID PETROLEUM GAS ("LPG")
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.
The Government of Alberta recognizes that many First Nations people and communities in the province prefer not to describe themselves as Indians/Indian bands. These terms have been used where necessary to reflect their legal meaning in the federal Indian Act.
This information circular gives an
overview of the Alberta fuel tax on Liquid Petroleum Gas
("LPG"). The topics discussed include:
Subject to Tax
- Fuel tax must be paid by consumers
when purchasing LPG for use as a motive fuel, or when purchasing it
from an automotive dispensing system. The only exception to the rule
is if the consumer is a tax-exempt purchaser (see paragraph
is a defined term which includes closely competing products such as
butane, ethane and propane; however, in Alberta only one grade of
propane (commonly called "spec propane") is normally sold
for motive use. Spec propane is the product that is referred to as
propane in this series of information circulars.
- Retailers collect the fuel tax by
including it in the price of taxable propane sold to their
customers. The fuel tax is collected from retailers by propane
distributors and producers by adding it to the product price when it
is dispensed into a tank which can be used to fuel vehicles.
Retailers thus purchase their propane for automotive sales from
distributors or producers tax-in, with the invoices clearly
indicating the sale was tax-in and with the tax charge recorded
separately on the invoices. This includes propane delivered by a
distributor to its own retail outlets. TRA will obtain records of
sales and deliveries made by distributors monthly.
- Retailers will only sell propane
tax-out to buyers other than tax-exempt purchasers if the propane is
not dispensed from a vehicle dispensing system (i.e. portable
cylinder sales). Retailers who have one storage tank which is the
source of propane for both a vehicle dispensing system and a
cylinder dispensing system, may apply directly to Tax and Revenue Administration ("TRA") for a refund of the
tax paid on the propane that is not dispensed through the vehicle
dispensing system (see Information Circular PRO-2 for details).
Purchasers of Propane
- Under certain conditions, propane may
be sold tax-out to Indians and Indian bands if the sale is made on
an Indian reserve in Alberta. For information about the Alberta
Indian Tax Exemption program, please refer to the AITE
series of information circulars.
- Retailers who wish to claim refunds of
the fuel tax on propane must first register with TRA. See form AT389, Retailer Registration for Propane Tax
Refunds. A retailer with more than
one retail outlet must provide information specific to each outlet.
- Registration application forms include
questions about retailers' business, including estimates of taxable
and non-taxable sales at each retail outlet. Prior to being
registered, retailers must meet certain requirements (e.g. have CSA
approved totalizer meters which measure the volume of sales for
automotive purposes). TRA may request updates of information to
verify that refund claims are reasonable.
of LPG Agent-Collectors
- LPG agent-collectors are appointed by
TRA to collect and remit fuel tax on propane sold in Alberta. Only
producers and distributors can be appointed LPG agent-collectors.
When requested to do so by TRA, the agent-collectors will take
totalizer readings at retail locations where they make deliveries,
and report these readings to TRA. TRA will use this information to
verify retailers' refund claims.