Disclaimer: This guide is
intended to provide information respecting wholesale 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.
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Table of Contents |
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Who Must Obtain a
Gasoline and Motive Fuel Wholesaler's Licence? |
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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 - 13.6 cents per litre,
- Motive
fuel (e.g. diesel) tax - 19.2 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.
Who
Must Obtain a Gasoline and Motive Fuel Wholesaler's Licence?
Any person (which
includes individuals, partnerships or corporations) who wishes to purchase or
refine gasoline and/or motive fuel in the province for the purpose of resale to
other licensed wholesalers and licensed retailers must obtain a Gasoline and
Motive Fuel Wholesaler's Licence.
Applications
for gasoline and motive fuel wholesaler's 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
Program Advisory Services
P.O. Box 3000
Fredericton, New Brunswick
E3B 5G5
Telephone: (506) 453-2404
Fax: (506) 457-7335
The fee for
a wholesaler's licence is based on the total litres of all taxed and tax exempt
gasoline and motive fuel sold annually.
The fee is
calculated as follows:
- For
each litre up to and including 50,000,000 litres:
- $0.00025 per litre
- For
each litre in excess of 50,000,000 litres but not exceeding 150,000,000
litres:
- $0.00015 per litre
- For
each litre in excess of 150,000,000 but not exceeding 350,000,000 litres:
- $0.00005 per litre
- For
each litre in excess of 350,000,000 litres:
- $0.00001 per litre
Where a
person applies for a wholesaler's licence for the first time, the fee shall be
calculated based on an estimate of the number of litres expected to be sold in
the coming year for which the licence is issued. If the amount sold is greater
than the estimate, the wholesaler shall pay the appropriate fee based on actual
amount sold.
Gasoline and
motive fuel sold by one wholesaler to another shall not be included in
computing the number of litres of gasoline and motive fuel that the wholesaler
sells under his licence.
Gasoline and
Motive Fuel Wholesalers (collectors) may be required to provide security before
a wholesaler's licence is issued. This security may be in the form of a bond,
cash or other security satisfactory to the Commissioner.
The amount
of the security is based on three (3) to six (6) months tax remittances
(minimum of $500,000.00) that would normally be collected by the wholesaler
(collector) each month.
The
wholesaler's licence must be renewed annually on a 12-month cycle, calculated
from the date of issue. (Example: If the licence issue date were July 1st, 2001
the expiry date would be June 30th, 2002).
A renewal
notice is issued to the wholesaler approximately one month prior to the expiry
date. The licence is renewed upon receipt of the completed renewal form and
licence fee payment provided that the applicant's account is in good standing
with the department.
- The
Revenue and Taxation Division must be notified of any changes in regards
to the address, contact persons or officers of the licencee;
- A
gasoline and motive fuel wholesaler's licence cannot be transferred from
one person to another; and
- Gasoline
and motive fuel storage facilities must have a valid NB Petroleum Storage
Site licence (available from the Department of Environment and Local
Government).
The Minister
may refuse to issue any licence if the Minister has reasonable or probable
grounds to believe that the applicant has:
- failed
to deposit satisfactory security as required;
- 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;
- failed
to comply with any term or condition imposed on a licence previously
issued; or
- had
a licence previously issued revoked during the previous five years.
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.
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 occurs as a result of a voluntary closure or sale of a business.
Cancellation must be done in writing.
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
Rules:
- Purchases
in New Brunswick
- Wholesalers purchasing gasoline and motive fuel in the
Province of New Brunswick must purchase from wholesalers licensed to sell
in New Brunswick.
- Imports
- Purchases may be made from unlicensed wholesalers
provided that the purchase takes place outside New Brunswick and the N.B.
wholesaler transports the products into the Province and declares the
purchases (see Reporting).
- Any purchases of motive fuel required to be marked in
New Brunswick must be marked in accordance with New Brunswick Regulations
(see Marking of Tax Exempt Motive Fuel).
Sales
Rules:
- Wholesalers
are permitted to sell gasoline and motive fuel to licensed retailers,
other licensed wholesalers and also to consumers provided that the fuel is
sold in bulk and not from fixed pumps or service station pumps.
It
is the responsibility of the wholesaler to ensure that both the retailer and
the wholesaler to whom gasoline and motive fuel is delivered have valid
licences;
Note: A listing of licensed
retailers and wholesalers is sent with the applicant's gasoline and motive fuel
wholesaler's licence. The wholesaler or retailer's licence can also be verified
with the Revenue and Taxation Division at (506) 453-2404.
- No
wholesaler shall sell tax exempt motive fuel to anyone not authorized to
purchase tax exempt motive fuel.
Marking
of 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 maintain separate storage facilities for exempt (dyed) motive fuel.
Licensed
wholesalers may apply for location specific authorizations to mark motive fuel
(see Inquiries). Marker can only be added to motive
fuel by persons authorized to do so. In order to mark, the following
requirements must be met:
- Hold
a valid Gasoline and Motive Fuel Wholesaler's Licence; and
- Hold
a valid authorization to mark for each location at which fuel is marked.
Restrictions:
- No
person shall remove the dye from marked motive fuel or render the dye
invisible; and
- No
person shall carry dye in any delivery truck or transport such dye in any
vehicle unless authorized by the Minister.
The person
authorized to mark motive fuel shall add the dye, by means of an injector, on
the premises of a bulk plant located in the Province or by means of a mobile
injector, as approved by the Minister. The person authorized to mark motive
fuel is also responsible for the safe and proper disposition of the empty dye
containers and shall take all reasonable precautions for the safe keeping of
the dye to prevent unauthorized use of the dye.
A person
authorized to mark motive fuel must requisition from a supplier approved by the
Minister, sufficient quantities of dye to ensure that such person has on hand
at all times a quantity of dye that is adequate for the required marking.
A person
authorized to mark motive fuel must requisition from the Minister, or a person
designated by the Minister, sufficient quantities of dye to ensure that such
person has on hand at all times a quantity of dye that is adequate for the
required marking.
Inventory
Control and Record Keeping Requirements
A wholesaler
authorized to mark motive fuel shall maintain sufficient records of the
quantities of the dye received and used in order to disclose an accurate
account of the dye consumed. The wholesaler could also be requested to file a
report giving details of the dye inventory, dye obtained, dye used and fuel
marked during the preceding month and any other such information that the
Minister may require.
Where the coloring
agent is not kept in a fixed storage tank, the wholesaler authorized to mark
shall keep the coloring mixture in a sealed container placed in premises
situated close to the place where the marking of motive fuel is done.
The
wholesaler authorized to mark is also responsible for the coloring agent and
shall ensure that it is used for no purpose other than the marking of motive
fuel under the Act. In addition, the coloring agent shall be kept at all
times at a temperature higher than -20 degrees Celsius.
The
wholesaler authorized to mark shall acquire, install and maintain in good
operating condition the equipment necessary for marking. Where the equipment
includes an injection system, the system shall be installed so that it may be
easily accessible for maintenance or inspection purposes.
Before
commencing the marking of motive fuel, the wholesaler shall submit to the
Minister a plan of the projected equipment and installations for the marking of
motive fuel. The wholesaler shall also submit to the Minister before any change
in the existing marking equipment and installations, a plan of the projected
changes.
Routine
inspections will be conducted to verify record keeping requirements and to
ensure that dye-mixing procedures are performed in accordance with Regulations.
Proportion
of Coloring Agent
Marking or
coloring motive fuel shall be done by adding a coloring agent (marker),
containing a red tincture, a tracer and aromatic solvents in a proportion of 14
litres of each million litres of motive fuel.
In order to
mark the motive fuel in a proportion of 14 parts per million, the pure dye must
be properly diluted with stove oil or kerosene (cocktail mix). The cocktail mix
is created by blending 18 kilograms of pure dye with 625 litres of stove oil or
kerosene. The cocktail mix is then injected at the rate of 50 millilitres per
100 litres of motive fuel.
- Refined
in New Brunswick
Where
motive fuel to be marked is refined in New Brunswick, the marking shall be done
during the:
- storage of the motive fuel in the tanks at the
refinery, at an oil pipeline terminal, or at a marine terminal operated
by the wholesaler authorized to mark, or
- delivery of the motive fuel to the loading station at
the refinery, at an oil pipeline terminal, or at a marine terminal
operated by the wholesaler authorized to mark.
- Imported
into New Brunswick
Where
motive fuel to be marked is imported into New Brunswick and is already refined,
the marking shall be done during the storage of the motive fuel in the
importer's tanks, or at the loading racks of a marine terminal operated by the
importer, unless the marking of such motive fuel was done in accordance with
the Regulation before being imported.
Where
the motive fuel is not stored in such tanks, marking shall be done before or on
its entry into New Brunswick.
- Tank
Truck Loading Racks
Marking
at the tank truck loading racks is effected by means of an injection system
equipped with an automatic cut-off device designed to prevent the delivery of
non- marked motive fuel in case of a defect in the system.
The
motive fuel delivery system at the tank truck loading rack shall comprise
separate loading spouts for marked motive fuel and non-marked motive fuel, and
each spout shall be equipped with a meter.
A
motive fuel delivery system may include only one loading spout for marked
motive fuel and clear motive fuel where it meets the following conditions:
- The loading spout shall be designed or equipped so
that it may be cleaned by means of a sufficient quantity of clear motive
fuel at the end of each delivery of motive fuel and it shall be used for
the delivery of motive fuel only; and
- The delivery system shall be equipped with a meter in
order to distinguish between deliveries of marked motive fuel and
deliveries of clear motive fuel.
Any
deviation of this procedure must be approved by the Revenue and Taxation
Division.
It is the
responsibility of the wholesaler 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 specified conditions are met:
- 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 wholesaler makes a tax exempt sale to any of the above purchasers, the
wholesaler must ensure that both the Purchaser's Permit number and the expiry
date of the permit are recorded on the sales invoice.
- 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 _______________________________
- 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 _______________________________
- 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.
Every
wholesaler (collector) who sells gasoline and motive fuel shall keep and
maintain records containing the following information:
- Sales
invoices or cash register tapes showing date and type of product (Invoices
can not be made out to "Cash" - they must have proper customer
name and address. Invoices shown as "Cash Sale" could be subject
to tax assessment);
- Details
of tax collections and payments and copies of collector returns;
- Copies
of purchase invoices;
- The
number of litres of all aviation fuel, gasoline, motive fuel or propane
refined by the collector;
- The
number of litres of all aviation fuel, gasoline, motive fuel or propane
purchased from or sold to wholesalers in the Province;
- The
number of litres of all aviation fuel, gasoline, motive fuel or propane
imported from outside the Province or exported from the Province;
- The
number of litres of all tax exempt or taxable aviation fuel, gasoline,
motive fuel or propane sold to retailers or consumers within the Province;
- The
names and addresses of all vendors of aviation fuel, gasoline, motive fuel
or propane to the collector, or purchases of aviation fuel, gasoline,
motive fuel or propane from the collector, and the dates of the sales,
whether retail or wholesale; and
- Details
of all sales of tax exempt aviation fuel, gasoline, motive fuel or
propane, including proof of the tax exemption.
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.
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.
Wholesalers
(collectors) are required to complete tax returns, including schedules relative
to sales and purchases of gasoline, motive fuel and propane. The tax returns
and schedules along with the payment due, made payable to the Minister of
Finance, must be submitted by the due date.
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Due Date: |
The returns and payments must be filed
with the Province by the twenty-fifth day of the month following the month
being reported. If the twenty-fifth day falls on a Saturday, the due date is
the previous working day. If the twenty-fifth day falls on a
holiday or on a Sunday, the due date is the next working day. |
Note: A Nil return must
be filed even if the wholesaler has had no sales during the previous month.
Copies of Gasoline
and Motive Fuel Tax Returns and Instructions for the Completion of Gasoline and
Motive Fuel Wholesaler/Collector Returns are available 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
Licensed
wholesalers as collectors receive tax directly from the taxpayer or collect an
amount equal to the tax at the wholesale level. There are instances when errors
are made in the calculation of the tax to be remitted. This could result from
clerical errors, using the wrong tax rate, applying tax to an exempt item, etc.
To claim a
refund of an overpayment an application for the refund of gasoline and motive
fuel tax may be made by completing form GMF_31.
The following information must be included with your claim:
- Copies
of invoices showing the tax that was paid; and
- Supporting
information confirming the actual amount that should have been remitted.
Refund
claims must be made within five (5) years from the day on which the
overpayment was made.
Gasoline and
motive fuel tax is collected at the wholesale level to simplify the tax
collection process. Since the tax is imposed on the consumer, the Gasoline and Motive Fuel Tax Act
allows for a rebate of the tax when the wholesaler (collector) is unable to
collect the tax from the person to whom the gasoline or motive fuel was sold or
delivered because the person is bankrupt or has discontinued the business of
selling gasoline or motive fuel.
To claim a
refund of an overpayment an application for the refund of gasoline and motive
fuel tax may be made by completing the form GMF_29.
The following information must be included with your claim:
- Copies
of invoices showing the tax that was paid; and
- Supporting
information confirming the actual amount that should have been remitted.
Refund
claims must be made within twelve (12) months of the selling or
delivering of the gasoline or motive fuel.
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:
- Ascertain
the amount of tax payable, or the money remissible by any person;
- Inspect
or examine his/her books, records, documents, engines, machinery and
premises to ascertain the quantities of aviation fuel, gasoline or motive
fuel bought or sold by him/her during any period to which reference is
made in a return required to be made under the Gasoline and Motive Fuel Tax
Act;
- 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;
- 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;
- Seize
any books of account, records, documents or other papers which he/she
discovers during an audit or examination which he/she believes on
reasonable grounds 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
wholesaler found in violation of the Act may be subject to:
- An
official warning
- Tax
assessment
- Fines
- Penalties
- Seizure
of gasoline and motive fuel
- Suspension
of licence
- Revocation
of licence
Wholesalers
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 wholesaler of the
action by personal service or by ordinary or registered mail.
Wholesalers
who are 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
who are 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.
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Aviation Fuel |
Any gas or liquid that is sold to
be used or is used to create power to propel an aircraft and includes any
product that is designated to be aviation fuel by the regulations. |
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Commissioner |
The Provincial Tax Commissioner
provided for under the Revenue
Administration Act and includes those persons designated by the
Minister of Finance to act on behalf of the Provincial Tax Commissioner. |
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Consumer |
A person who, within the Province,
purchases, receives delivery of or otherwise acquires possession of aviation
fuel, gasoline or motive fuel for personal use or for the use of another
person at the other person's expense or who uses or consumes aviation fuel,
gasoline or motive fuel in any manner and includes a purchaser. |
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Gasoline |
Any petroleum product containing
any derivative of petroleum, natural gas or coal having a specific gravity of
0.8017 or under at a temperature of 60 degrees Fahrenheit (15.6 degrees
Celsius); including benzol and any benzol mixture, but not including
manufactured gas, natural gas, bunker fuel, crude oil or propane. |
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Gasoline or Motive Fuel Pump |
A tank or receptacle of not less
than fifty (50) gallon or two hundred and twenty-seven (227) litre capacity
that is used or intended to be used for the storage of gasoline or motive
fuel and is equipped with a pump for dispensing the gasoline or motive fuel. |
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Locomotive Fuel |
Motive fuel used for the operation
of railway locomotives and equipment attached directly to the same fuel
supply system that services the railway locomotive. This motive fuel is taxed
at a reduced rate. |
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Marked Motive Fuel |
Tax exempt diesel fuel, stove oil
or furnace oil to which a dye has been added in accordance with the
regulations. Cocktail mix means concentrated dye properly diluted with stove
oil or kerosene. |
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Minister |
The Minister of Finance and includes
the Commissioner and those persons designated by the Minister of Finance to
act on behalf of the Minister of Finance or on behalf of the Commissioner. |
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Motive Fuel |
Any gas fuel or liquid fuel that
is not gasoline and that can be used for moving or operating any internal
combustion engine or for heating. Some examples of motive fuel are: kerosene, propane, natural gas, crude oil, furnace oil, stove oil, diesel distillite, and other motor fuel but does not include manufactured gas that is used as a fuel. |
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Purchaser's Permit |
A permit that is issued under the Gasoline and Motive Fuel Tax Act
and that has not expired or been suspended, cancelled or revoked. |
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Retailer |
A person who keeps for sale or
sells to a consumer, gasoline or motive fuel. |
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Wholesaler |
A person who sells or keeps for sale,
gasoline or motive fuel, to a person other than a consumer. |
All
inquiries should be directed to:
Department of Finance
Revenue and Taxation Division
Program Advisory Services
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.