Gasoline & Motive Fuel Wholesaler's Guide
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| Department of Finance Gasoline & Motive Fuel Wholesaler's Guide |
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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.
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:
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.
| Commission: | Every wholesaler (collector) may be paid a commission of a sum equivalent to 0.011 cents per litre of the gasoline and motive fuel for which the tax was collected and remitted 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
Tax Program Administration Section
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:
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 Minister may refuse to issue any licence if the Minister has reasonable or probable grounds to believe that the applicant has:
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:
Sales Rules:
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.
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:
Restrictions:
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.
Where motive fuel to be marked is refined in New Brunswick, the marking shall be done during the:
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.
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:
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:
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.
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 ___________________________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 ___________________________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:
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.
| 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, failure to take commission, 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:
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:
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:
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:
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.
| 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. |
| 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. |
| 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. |
| 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. |
| 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. |
| 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. |
| 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. |
| 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. |
| 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. |
| 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. |
| Retailer | A person who keeps for sale or sells to a consumer, gasoline or motive fuel. |
| 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
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.