Motor Fuel Tax & Carbon Tax
Motor fuel tax and carbon tax apply when you purchase or use fuel such as gasoline, diesel and propane, unless a specific exemption applies.
The tax rates for motor fuel tax and carbon tax vary depending on the type of fuel and if the fuel is clear or coloured (PDF). In some cases, the tax rates are also different depending on where you purchase the fuel and how you use it.
Motor fuel tax applies to fuel sold for use or used to power internal combustion engines (e.g. cars, boats, airplanes, stationary engines etc.) and to propane for any use, unless a specific exemption applies.
If fuel (except propane) is sold for use other than in an internal combustion engine, motor fuel tax doesn't apply so long as specific invoicing and other requirements are met.
When the tax is charged on clear gasoline and clear diesel fuel there are also dedicated taxes (PDF) added to the tax that apply in certain regions of the province and go to:
- South Coast British Columbia Transportation Authority (TransLink)
- British Columbia Transit Authority (BC Transit)
- British Columbia Transportation Financing Authority (BCTFA)
Carbon tax applies to the purchase or use of fuels such as gasoline, diesel, natural gas, heating fuel, propane and coal, unless a specific exemption applies. The use of fuel includes all uses, even if the fuel isn't combusted. Carbon tax also applies to the use of combustibles, such as peat and tires, when used to produce energy or heat.
The carbon tax is revenue neutral; every dollar generated by the tax is returned to British Columbians through reductions in other taxes, such as:
- income tax credits for low income individuals
- lowering the first two personal income tax rates by 5%
- providing northern and rural homeowners a benefit of up to $200 annually
- lowering business taxes