Disclaimer: This guide is intended to provide information respecting retail vendors under the Gasoline and Motive Fuel Tax Act (the Act). This guide should not be regarded as a replacement of the laws, regulations or administrative documents to which it refers.

What is Gasoline and Motive Fuel Tax

The Gasoline and Motive Fuel Tax is a provincial tax on the purchase or consumption of gasoline and motive fuel and is administered by the Revenue and Taxation Division of the Department of Finance. All gasoline and motive fuel purchased or consumed in New Brunswick is subject to tax unless there is a specific exemption in the legislation.

The current tax rates are:

• Gasoline tax – 10.7 cents per litre,
• Motive fuel (e.g. diesel) tax – 16.9 cents per litre,
• Propane tax – 6.7 cents per litre,
• Aviation fuel tax – 2.5 cents per litre, and
• Locomotive fuel tax – 4.3 cents per litre.

How Gasoline and Motive Fuel Tax is Collected

The Gasoline and Motive Fuel Tax Act places the responsibility to pay the tax on the consumer. For simplicity in administration, the tax is collected at the wholesale level. This means that in most cases licensed wholesalers collect an amount equal to the tax on or before delivery of the product to retailers and therefore this tax is included in the price at the pumps. This process allows for the transfer of the payment of tax to the consumer.

Exception:

Retailers who sell taxed propane collect the tax at time of sale and therefore must remit the tax to the Province (see Reporting).

Who Must Obtain a Gasoline and Motive Fuel Retailer's Licence?

Any person (which includes individuals, partnerships or corporations) who wishes to purchase gasoline and/or motive fuel in the province for the purpose of resale to consumers must obtain a Gasoline and Motive Fuel Retailer's Licence. This includes persons wishing to sell from fixed locations as well as from tank-trucks.

Licence Application

Applications for gasoline and motive fuel retailers' licences may be obtained at any Service New Brunswick (SNB) office or by contacting the Revenue and Taxation Division of the Department of Finance at:

Department of Finance
Revenue and Taxation Division
Tax Program Administration Section
P.O. Box 3000
Fredericton, New Brunswick
E3B 5G5

Telephone: (506) 453-2404
Fax: (506) 457-7335

Licence Fee

The fee for the retail vendor's licence is $20.00 per dispensing nozzle for persons selling from either fixed pumps or tank trucks and this licence does not require renewal each year. However, licences are location specific and any vendor operating multiple locations will require separate licences for each location.

Security

Bonding may be required for retailers who sell taxed propane.

Licence Rules

1. The Revenue and Taxation Division must be notified of any changes in regards to the address, contact persons or officers of the licencee;
2. A gasoline and motive fuel retailer's licence is not transferable from one location to another;
3. A gasoline and motive fuel retailer's licence cannot be transferred from one person to another; and
4. Gasoline and motive fuel storage facilities must have a valid NB Petroleum Storage Site licence (available from the Department of Environment and Local Government).

Rejection of a Licence

The Minister may refuse to issue any licence if the Minister has reasonable or probable grounds to believe that the applicant has:

1. failed to deposit satisfactory security as required;
2. been convicted of a violation of a provision of the Gasoline and Motive Fuel Tax Act or any provision relating to gasoline or motive fuel in any other Act;
3. failed to comply with any term or condition imposed on a licence previously issued; or
4. had a licence previously issued revoked during the previous five years.

Suspension of a Licence

The Minister may suspend a licence for a period of time established by regulation if the Minister has reasonable and probable grounds to believe that the licence holder has violated or is failing to comply with the Act or Regulations or with any term or condition of the licence.

Suspensions will be for one calendar month for first time violators. For each subsequent suspension, the suspension will be double the number of months for which that licence or permit was suspended in the previous suspension.

Revocation of a Licence

The Minister may revoke any licence if the Minister has reasonable and probable grounds to believe that the licence holder has violated or is failing to comply with the Act or Regulations or with any term or condition of the licence. This is an involuntary cancellation of a licence and in order to sell gasoline or motive fuel again the applicant must reapply and meet all licensing conditions.

Cancellation of a Licence

Cancellation of a licence occurs as a result of a voluntary closure or sale of a business. Cancellation must be done in writing.

The licence holder must also notify the Department of Finance when the gasoline and motive fuel retailer's business is sold because the previous owner's gasoline and motive fuel licence must be cancelled before a new licence can be issued to the new proprietor.

Reinstatement of a Licence

The Minister may reinstate any licence and may impose any combination of conditions and terms established in accordance with the regulations. For example, the Minister may request that an audit be conducted prior to reinstatement. (A new application must be submitted and the fee must be paid.)

Purchase and Sales Rules

Purchase Rule:

1. To ensure that the gasoline and motive fuel tax is paid on gasoline and motive fuel sold at retail, retailers are permitted to purchase only from wholesalers licensed in New Brunswick.

Note: A list of all licensed wholesalers in the province is sent with the applicant's gasoline and motive fuel retailer's licence. The wholesaler's licence can also be verified with the Revenue and Taxation Division at (506) 453-2404.

Sales Rules:

1. No retailer shall sell or keep for sale gasoline or motive fuel at any outlet unless he is the holder of a retailer's licence for that outlet;
2. No person shall sell, or keep for sale, tax exempt motive fuel unless authorized to do so by a retailer's licence;
3. No retailer shall sell gasoline and motive fuel to other resellers (retailers or wholesalers); and
4. No retailer shall sell tax exempt motive fuel to anyone not authorised to purchase tax exempt motive fuel.

Tax Exempt Motive Fuel

Effective April 1, 1998 New Brunswick introduced a marking program for tax exempt diesel fuel, stove oil and furnace oil so as to distinguish it from taxed motive fuel. In order to ensure proper distribution of the tax exempt products, retailers must continue to maintain separate storage facilities for exempt (dyed) motive fuel.

Tax Exempt Sale Requirements

It is the responsibility of the retailer to ensure that each person purchasing tax exempt motive fuel is properly authorized to do so. Purchases made by individuals who fall into the following classes will be entitled to purchase tax exempt motive fuel provided that the specified conditions are met:

1. Aquaculturists / Farmers / Fishers / Silviculturists / Wood Producers / Forest Workers / Manufacturers / Persons engaged in Mining and Quarrying

   Individuals who fall within these classes may purchase tax exempt motive fuel, provided they present a valid purchaser's permit issued by the Department of Finance and provide the expiry date of the permit.

   Where a retailer makes a tax exempt sale to any of the above purchasers, the retailer must ensure that both the Purchaser's Permit number and the expiry date of the permit are recorded on the sales invoice.

2. Operation of Vessels

   Persons engaged in the operation of vessels may purchase tax exempt motive fuel, provided they present a signed certification that the fuel is to be used in the operation of a registered vessel within the meaning of the Canada Shipping Act, exceeding two hundred tons gross tonnage but not for use in the operation of a registered vessel that is used for dredging purposes.

   Example:

   I/we hereby certify that the motive fuel purchased herein is to be used in the operation of a registered vessel within the meaning of the Canada Shipping Act pursuant to paragraph 6(6)(d) of the Act.

   Signature ___________________________
   Position ____________________________
   Date _______________________________

3. Production of Electricity

   Persons engaged in the production of electricity may purchase tax exempt motive fuel, provided they present a signed certification that the fuel is to be used in the operation of a generator used to produce electricity for sale.

   Example:

   I/we hereby certify that the motive fuel purchased herein is to be used in the operation of a generator used to produce electricity for sale pursuant to paragraph 6(6)(j.1) of the Act.

   Signature ___________________________
   Position ____________________________
   Date _______________________________

4. Preparation of Food, Lighting and Heating of Premises or Heating of Domestic Hot Water

   Persons engaged in the preparation of food, lighting and heating of premises or heating of domestic hot water may purchase tax exempt motive fuel, provided that it can be verified that the fuel storage tanks are connected to or would be reasonably expected to be connected to equipment or apparatus used in the preparation of food, the lighting and heating of premises, or for the heating of domestic hot water. This use must be recorded in the sales records for the customer.

   Note: When the tax exempt motive fuel is picked up at the retail outlet, the fuel usage must be recorded on the sales record (i.e. fuel used to heat a camp, etc.) and a signed certification stating that the fuel is to be used solely and directly in the preparation of food, lighting, heating of premises or heating of domestic hot water must be obtained from the customer.

   Example:

   I/we hereby certify that the fuel purchased herein is to be used solely and directly in the preparation of food, lighting, heating of premises or for heating of domestic hot water pursuant to paragraphs 6(6)(i.1) and (j) of the Act.

   Signature ___________________________
   Position ____________________________
   Date _______________________________

Record Keeping Requirements

Every retailer who sells gasoline and motive fuel shall keep and maintain the following:

1. Records showing the retailer's inventories of gasoline and motive fuel, including:
   • daily beginning and ending metre readings for each pump from which gasoline or motive fuel is dispensed, and
   • daily stock on hand (number of litres) for each type of gasoline or motive fuel on hand at the beginning of each day.

2. Records to substantiate all purchases of gasoline and motive fuel, including:
   • name and address of the wholesaler from whom the products are purchased,
   • dates of the purchases, and
   • number of litres of each type of gasoline and motive fuel purchased.

3. Records to substantiate all sales of tax exempt gasoline and motive fuel by the retailer, including:
   • the name and address of each person to whom the retailer sold tax exempt gasoline and motive fuel,
   • date of each sale,
   • the number of litres of each type of tax exempt gasoline or motive fuel sold in each sale,
   • the location to which each sale was delivered, and
   • a record of each purchaser's authorization to purchase tax exempt fuel including any applicable licence, permit numbers or signed certification.

4. Copies of the purchase invoices for every purchase of gasoline or motive fuel from a wholesaler.

Maintenance of Records

Records must be maintained in easily readable paper or electronic format for six years or until such time that authorization is received in writing from the Provincial Tax Commissioner.

Availability of Records

Records shall be made available for inspection by an inspector or an auditor or any person designated by the Commissioner upon request at any reasonable time.

Reporting

Retailers are not required to collect and report tax on sales of gasoline and motive fuel as the applicable tax is paid directly to the wholesaler upon purchase. However, retailers licensed to sell propane are required to collect the tax (see What is Gasoline and Motive Fuel Tax) when the propane is being purchased by individuals for uses other than for cooking (i.e. barbecues), or heating. Examples: propane used for heating tar for roofing, for operating a zamboni, etc.

Propane tax must be reported monthly through fuel tax returns and schedules. Propane reports are to be submitted by the 25th of each month reporting for the previous month (e.g. Report for January must be submitted by February 25th).

For information on propane reporting, contact the Revenue and Taxation Division of the Department of Finance at:

Department of Finance
Revenue and Taxation Division
Tax Program Administration Section
P.O. Box 3000
Fredericton, New Brunswick
E3B 5G5

Telephone: (506) 453-2404
Fax: (506) 457-7335

Audit and Inspection

Under subsection 30(1) of the Gasoline and Motive Fuel Tax Act and sections 28 and 29 of the Revenue Administration Act, any appointed officer, auditor, inspector or any other person with the written authority of the Minister or the Commissioner may enter upon the premises of any person in which any business involving the sale, use or consumption of aviation fuel, gasoline or motive fuel is carried on in order to:

1. Ascertain the amount of tax payable, or the money remissible by any person;
2. Inspect or examine books, records, documents, engines, machinery and premises to ascertain the quantities of aviation fuel, gasoline or motive fuel bought or sold by the retailer during any period to which reference is made in a return required to be made under the Gasoline and Motive Fuel Tax Act;
3. Ascertain whether the person has had in his possession tax exempt motive fuel, or gasoline or motive fuel in respect of which the tax is payable, and to make tests or take samples thereof;
4. Require the owner or manager of the property or business and any other person on the premises or place to give him/her all reasonable assistance with the audit or examination and to answer all proper questions relating to such audit or examination;
5. Seize any books of account, records, documents or other papers which is discovered during an audit or examination which the inspector or auditor believes on reasonable ground may provide evidence of the commission of an offence under a revenue Act.

The owner, occupier or person in possession or in charge of the premises so entered shall answer all questions relating to any of the matters stated above, and shall produce for inspection such books, records, documents, barrels, tanks or receptacles as required.

Any retailer found in violation of the Act may be subject to:

1. An official warning
2. Tax assessment
3. Fines
4. Penalties
5. Seizure of gasoline and motive fuel
6. Suspension of licence
7. Revocation of licence

Objection and Appeal

Notice of Objection

Retailers wishing to dispute the liability for the amount assessed against them, may file a Notice of Objection with the Commissioner setting out the reasons for the objection and all relevant facts. The notice must be filed within 30 days after paying the tax or the date of the service or mailing of a Notice of Assessment, whichever is sooner.

Upon receipt of a Notice of Objection, the Commissioner shall within 60 days reconsider the assessment and vacate, confirm or vary the assessment or reassess, and the Commissioner shall thereupon notify the retailer of the action by personal service or by ordinary or registered mail.

Notice of Appeal

Retailers dissatisfied with the decision of the Commissioner may, within 30 days after being notified of such decision, file a Notice of Appeal with the Minister of Finance. The Minister shall within 30 days after the receipt of a Notice of Appeal, fix a date to consider the appeal and shall give a notice of such hearing to the appellant and the Commissioner. Upon any such appeal, the Minister may affirm, vary or reverse the decision of the Commissioner and shall give a written notice of his decision to the appellant by personal service or by ordinary or registered mail.

Appeal to The Court of Queen's Bench

Appellants dissatisfied with the decision of the Minister may, within 30 days after the date of service or mailing of the notice explaining the Minister's decision, appeal from such decision to a judge of The Court of Queen's Bench of New Brunswick.

Definitions

Inquiries:

All inquiries should be directed to:

Department of Finance
Revenue and Taxation Division
Tax Program Administration Section
P.O. Box 3000
Fredericton, New Brunswick
E3B 5G5

Telephone: (506) 453-2404
Fax: (506) 457-7335
E-mail: wwwfin@gnb.ca
Web Site: www.gnb.ca/0024/index-e.asp

Legislation:

New Brunswick Acts and Regulations may be accessed on the Department of Justice web site (www.gnb.ca/justice/asrlste.htm) or copies can be purchased from the Queen's Printer.