Tax Interpretation Manual: Motor Fuel Tax Act - Sections 15 to 73

Section 15 – Prohibition Against Unauthorized Purchase Or Use Of Coloured Fuel

MFT - SEC.15/Int.-R.2

GENERAL

References:

Act: Section 1 “coloured fuel”

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Interpretation (Revised: 2009/04, 2015/04)

Effective February 16, 2005, Bill 8, Taxation Statutes Amendment Act, 2005 amended the introduction to subsection 15(1) by clarifying that, in addition to use, a person must not purchase coloured fuel except if it is for an authorized purpose. This amendment closed a loophole in the legislation that allowed a person to buy coloured fuel for any purpose as long as the person remitted to the government the tax that would have been paid if the fuel was clear (under subsection 15(3)). This clarification ensured that the coloured fuel policy, which prohibits the purchase and use of coloured fuel except for specific authorized purposes, was given effect.

R.1 Imported Clear Fuel (Revised: 2015/04)

Companies importing clear fuel for use in vehicles which are entitled to use coloured fuel must pay tax at the clear fuel rate. The Act requires fuel taxed at the coloured fuel rate to be dyed in accordance with the regulations.

Where clear fuel is used when coloured fuel is permitted, section 22 of the Act authorizes a refund of the difference between coloured and clear fuel tax rates. This refund applies to fuel used in the following vehicles when operated on roads other than highways: vehicles prescribed under MFTR section 15.2 [logging and mining industry] and commercial motor vehicles (excluding pick-up trucks) transporting prescribed petroleum exploration and drilling equipment and supplies.

R.2 Unauthorized Use of Coloured Fuel (Revised: 2009/04, 2015/04)

Some businesses find it inconvenient to purchase and store both clear and coloured fuel. Occasionally, such businesses request permission to use coloured fuel for an unauthorized purpose, then self-assess and remit the additional tax due.

Coloured fuel may only be purchased or used for the purposes authorized by subsection 15(1). Use of coloured fuel for other purposes is prohibited. There is no provision in the Act that is intended to provide that a business can self-assess tax due where coloured fuel is purchased or used for an unauthorized purpose. Therefore, these businesses must be advised that they may not purchase or use coloured fuel for an unauthorized purpose.

Where a business uses coloured fuel for an unauthorized purpose, even if they self-assess and remit the difference between the coloured fuel tax and the clear fuel tax, they are in contravention of subsection 15(1) and may be subject to a penalty under section 45.3 [penalty for unauthorized purchase or use of coloured fuel] and/or prosecution under paragraph 64(4)(d) [offences].

MFT - SEC.15(1)(a)/Int.

(1)(a) Ship

References:

Act: Section 1 “coloured fuel”, “ship”

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Interpretation (Issued: 2015/04)

Paragraph 15(1)(a) authorizes the purchase or use of coloured fuel for the operation a ship.

MFT - SEC.15(1)(b)/Int.

(1)(b) Tractor

References:

Act: Section 1 “coloured fuel”, “highway”, “tractor”

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Interpretation (Issued: 2015/04)

Paragraph 15(1)(b) authorizes the purchase or use of coloured fuel for the purpose of operating a tractor when used on other than a highway. For more information on tractors see MFTA/Sec. 1 “tractor”/R.1.

MFT - SEC.15(1)(c)/Int.-R.1

(1)(c) Industrial Machine

References:

Act: Section 1 “coloured fuel”, “highway”, “industrial machine”

MFTR: Section 15.1

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Interpretation (Issued: 2015/04)

Paragraph 15(1)(c) authorizes the purchase or use of coloured fuel for industrial machines when used on other than a highway. MFTR section 15.1 prescribes a list of motor vehicles that are designated as industrial machines.

R.1 Snowmobiles and Snow Cats (Revised: 2009/04; 2015/04)

MFTR paragraph 15.1(d) defines "industrial machine" to include any machine equipped with caterpillar tracks. Caterpillar tracks are continuous metal bands which pass around the wheels of a tractor.

Industrial snowcats and snow groomers, which are vehicles designed for operation on snow, usually have continuous metal tracks and as such, may use coloured fuel when operated off-highway. In some cases, industrial snowcats and snow groomers may have continuous rubber tracks instead of metal tracks. These machines may also use coloured fuel when operated off-highway.

MFT - SEC.15(1)(d)/Int.-R.1

(1)(d) Logging Industry

References:

Act: Section 1 “coloured fuel”, “motor vehicle”

MFTR: Section 15.2

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Interpretation (Issued: 2015/04)

Effective March 31, 1999, Bill 52, Taxation Statutes Amendment Act, 1999 amended section 15 consequential to the introduction of section 15.1, which allowed unlicensed motor vehicles used in logging operations to use coloured fuel provided tax at the clear tax rates was remitted where required.

Effective April 1, 1989, Bill 9, Motor Fuel Tax Amendment Act, 1989 amended this section to prescribe by regulation the types of motor vehicles used by the logging industry which are authorized to use coloured fuel when operated on other than a highway.

Paragraph 15(1)(d) authorizes the purchase or use of coloured fuel for prescribed motor vehicles when used by the logging industry off-highway. MFTR subsection 15.2(1) [logging and mining industry] prescribes types of motor vehicles for the purposes of paragraph 15(1)(d).

R.1 Logging Industry (Issued: 2004/02; Revised: 2015/04)

The term ‘logging industry' is not defined in the Act. The ordinary meaning of ‘logging' is the occupation of felling trees, cutting them into logs, and transporting the logs to sawmills or a place of sale. The accepted common and ordinary meaning of industry is an employment or business. The conclusion follows that the ‘logging industry' is the industry that has as its primary purpose, the felling of trees, cutting them up and transporting them to a mill or market.

The intention of the legislation is to provide some tax relief directly to businesses in the logging industry. It was not intended that the use of coloured fuel be authorized in vehicles of any business that is related to the logging industry. For example, a business that constructs roads as its primary purpose may fell trees in order to construct the roads, but it would not be considered part of the logging industry for the purpose of paragraph 15(1)(d). See

MFTA/Sec.15(1)(e)/R.1 for the mining industry industry.

MFT - SEC.15(1)(e)/Int.-R.1

(1)(e) Mining Industry

References:

Act: Section 1 “coloured fuel”, “motor vehicle”

MFTR: Section 15.2

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Interpretation (Issued: 2015/04)

Effective March 31, 1999, Bill 52, Taxation Statutes Amendment Act, 1999 amended section 15 consequential to the introduction of section 15.1, which allowed unlicensed motor vehicles used in mining operations to use coloured fuel provided tax at the clear tax rates was remitted where required.

Effective April 1, 1989, the type of motor vehicles used by a mineral mining operation which may use coloured fuel when operated on other than a highway are prescribed by MFTR subsection 15.2(2).

Paragraph 15(1)(e) authorizes the purchase or use of coloured fuel for prescribed motor vehicles when used by the mining industry off-highway in respect of a mineral mining operation. MFTR subsection 15.2(1) [logging and mining industry] prescribes types of motor vehicles for the purposes of paragraph 15(1)(d).

R.1 Mining Industry (Issued: 2011/06; Revised: 2015/04)

The term 'mining industry' is not defined in the Act. The ordinary meaning of mining is the occupation of extracting and processing minerals and transporting minerals for processing and to the place of sale. The accepted and common ordinary meaning of industry is an employment or business. The conclusion follows that the 'mining industry' is an industry that has as its primary purpose, the extracting and processing of minerals and transporting of minerals for processing and for market.

The intention of the refund legislation is to provide some tax relief directly to businesses in the mining industry. It was not intended that the use of coloured fuel be authorized in vehicles of any business that is related to the mining industry. For example, a business that provides electrical services as it prime purpose may provide contract services at a mine site, but it would not be considered part of the ministry industry for the purposes of paragraph 15(1)(e). See MFTA/Sec.15(1)(d)/R.1 for the logging industry.

MFT - SEC.15(1)(f)/Int.-R.1

(1)(F) Stationary Engine And Portable Engine

References:

Act: Section 1 “coloured fuel”

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Interpretation (Issued: 2015/04)

Paragraph 15(1)(f) allows for the authorize purchase or use of coloured fuel for stationary and portable engines.

R.1 Stationary and Portable Engines (Issued: 2005/02, Revised: 2015/04)

Stationary and portable engines are not designed to be self-propelled. A portable engine is any fuel engine that can be picked up and moved and is generally used in motion. A stationary engine is one that is not self-propelled but rather operates in one place.

Where an engine is used to propel a vehicle and operate a stationary engine, the vehicle is not eligible to use coloured fuel and clear fuel must be used for both purposes. However, a refund is available for the portion of fuel used in the stationary engine in specific circumstances under MFTR Section 4 [refund-stationary engine].

Examples of qualifying engines include:

  • residential lawn mower, brush cutters and chainsaws,
  • rototillers and snow blowers (although these are not designed to be self-propelled they are considered portable),
  • gas/diesel powered welders with separate fuel storage attached to pickup trucks, and
  • boat lifts that are installed at a slip use two engines to run cables that lift a boat in or out of the water.

MFT - SEC.15(1)(g)/Int.-R.2

(1)(g) ROAD BUILDING MACHINE

References:

Act: Section 1 “coloured fuel”, “highway project area”

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Interpretation (Issued: 2015/04)

Effective July 29, 1999, Bill 71, Finance and Corporate Relations Statutes Amendment Act, 1999 amended paragraph15(1)(g) to clarify that lower-taxed coloured fuel may be consumed in road building machines, such as bulldozers and paving machines, when operated by or for the government in the construction or repair of roads maintained by the government.

Under the previous provisions, coloured fuel was authorized for use in road building machines operated within a highway project area. Roads maintained by the Ministry of Forests and Range and the Ministry of Energy, Mines and Petroleum Resources have historically qualified as “highway project areas”. However, through a chain of references in the definitions of a number of statutes, the Act unintentionally excluded such roads from the definition of highway. Technically, therefore, road building machines were not authorized to use coloured fuel on such roads.

The amendment corrects this anomaly by providing clear authority for allowing use of coloured fuel in road building machines operated on all roads maintained by the government, whether or not such roads qualify as highway.

R.1 Road Building Machines (Revised: 2005/01, 2015/04)

Fuel used in road building machines can be coloured fuel when the vehicle is used at a highway project area or used by or for the government in construction or repair of roads maintained by the government, or for travel to and from these locations. Road building machines used on a highway outside a project area for grading, clearing, maintenance etc., or not used by or for the government in construction or repair of roads maintained by the government, must use clear fuel.

Roads maintained by government include all logging, mining and other resource related mining roads on Crown land.

However, effective February 22, 2006 the authorized use of coloured fuel is expanded to include all motor vehicles not licensed to operate on a highway (paragraph 15(1)(m)). Consequently, there is no limitation on the use of coloured fuel in unlicensed road building machines used off-highway.

A "road building machine" as defined by the Commercial Transport Act means a vehicle:

  • that is designed and used primarily for grading of highways, paving of highways, earth moving and other construction work on highways, and
  • that is not designed or used primarily for the transportation otherwise of persons or property, and
  • that is only incidentally operated or moved over a highway and includes a vehicle designed as a road building machine by order of the Lieutenant Governor in Council.

Typical machines considered to be road building machines include:

  • bulldozers,
  • gradalls,
  • compactors,
  • loaders,
  • compressors (self-propelled),
  • paving machines,
  • rollers,
  • cranes,
  • scrapers,
  • dumptors,
  • tractors,
  • shovels,
  • trucks such as Euclids which, because of their size, are not permitted to move along a highway without a special temporary operations permit.
  • articulated rock trucks (similar to Euclids)

Road building machines do not include:

  • a vehicle originally designed for the transportation of persons or property to which machinery has been attached, or
  • dump trucks originally designed to comply with the size and weight provisions of the Regulations pursuant to the Commercial Transport Act.

Typical machines which are not considered to be road building machines include:

  • mobile cranes, dump trucks, flushers, street sweepers;
  • trucks designed to transport persons (e.g., crummies) or property or trucks to which machinery or equipment have been added.

R.2 Logging, Mining and Other Resource Related Roads 15(1)(g) (Revised: 2005/01, 2015/04)

Effective December 6, 2003, “road building machines” are permitted to use coloured fuel when constructing logging, mining, and/or petroleum and natural gas access roads on Crown land.

In the case of logging, mining and other resource related roads constructed on Crown lands, the roads are generally financed privately but must meet all of the regulatory requirements of the Crown. In addition, title to the land remains with the Crown, and ownership of the road returns to the Crown when no longer used by industry. As such, allowing use of coloured fuel in road building machines used for constructing logging, mining, and or petroleum and natural gas access roads on Crown land is within the intent of the concession provided under paragraph 15(1)(g). Prior to February 22, 2006, coloured fuel was not authorized for use by any road building machines constructing such roads on private lands.

However, effective February 22, 2006, the authorized use of coloured fuel is expanded to include all motor vehicles not licensed to operate on a highway (paragraph 15(1)(m)). Consequently, there is no limitation on the use of coloured fuel in unlicensed road building machines used off-highway.

MFT - SEC.15(1)(h)/Int.-R.3

(1)(h) Deliveries For Exploring And Drilling

References:

Act: Section 1 “coloured fuel”, “highway”; Section 22

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Interpretation (Issued: 2015/04)

Effective March 31, 1999, Bill 52, Taxation Statutes Amendment Act, 1999 amended paragraph 15(1)(h) to clarify that pick-up trucks used by the oil and gas industry are not authorized to use lower-taxed coloured fuel. This amendment is consistent with the historical intent and application of this section.

The provision was also amended to correct a technical inaccuracy by replacing the term petroleum products with petroleum. Petroleum refers to the raw material being extracted, while petroleum products refers to the refined products.

Paragraph 15(1)(h) allows coloured fuel to be consumed in commercial vehicles, other than pick-ups, when used off-highway (see MFTA/Sec. 1 “highway” for definition) to transport enumerated items for persons actively engaged in exploring or drilling for petroleum and natural gas (see MFTA/Sec. 15(1)(h)/R.3).

Subsection 22(1) of the Act authorizes a refund of the difference between that tax paid on clear fuel and tax that would have been paid on coloured fuel, if clear fuel is used for a purpose for which coloured fuel is authorized under paragraph 15(1)(h).

R.1 Pick-Up Trucks (Issued: 99/08)

In 1999, the Act was amended to clarify that pick-up trucks used by the oil and gas industry are not authorized to use coloured fuel. This amendment was consistent with the historical intent and application of the concession to use coloured fuel. For the purposes of the legislation, a pick-up truck is a vehicle designated a pick-up (PU) by ICBC under the body style category of the vehicle registration document. This pertains to a light truck having an enclosed cab and open body with low sides and a tailgate.

R.2 Deliveries by Third Parties (Revised: 2002/08; 2015/04)

Because the concession relates to transportation for persons involved in exploring or drilling, third parties are eligible to use coloured fuel provided they are transporting items for the use of the person involved in exploring or drilling, not for their own benefit. For example, bulk fuel agents are entitled to consume coloured fuel, off-highway, when delivering fuel to a qualifying drill site because the fuel will be consumed by the person doing the exploring or drilling. However, a well cementing company that transports materials for its own use in fulfilling its cementing contract would not be eligible to consume coloured fuel. In this case, the cementing company is transporting the materials for itself, not for a person involved in exploration or drilling.

Third-Party Responsibility: It is not always possible for a third party, for example a bulk fuel company, to know the ultimate use of the goods delivered (and subsequently whether or not the third party is entitled to the coloured fuel tax rate for fuel consumed off-highway with respect to the delivery). Therefore, the responsibility of the carrier is limited to ensuring the goods are delivered to a purchaser that is involved in exploring or drilling for petroleum and natural gas, at a site where exploration and drilling is occurring (see MFTA/Sec. 15(1)(h)/R. 3).

The third party is responsible for determining what portion of the delivery trip is off-highway. Please see MFTA/Sec 1 “highway”/Int. for more information.

R.3 Activities Qualifying as Exploring or Drilling for Petroleum and Natural Gas (Revised: 2004/12; 2015/04)

Paragraph 15(1)(h) allows coloured fuel to be consumed in commercial vehicles, other than pick-ups, when used off-highway for persons actively engaged in exploring or drilling for petroleum and natural gas. This concession does not extend to persons involved in the production (pumping etc.) or transportation of the petroleum or natural gas (e.g., by pipeline, motor vehicle, vessel, etc.).

Exploring and Drilling

The following activities qualify as exploring or drilling for the purposes of this section. Other activities, not listed, may qualify as well, provided they are clearly involved in exploration or drilling and are not involved in production or transportation. Exploration and drilling activities qualify regardless of whether or not the well is viable and put into production.

Seismic surveys – determining the likelihood of petroleum and natural gas deposits by generating energy waves and measuring their travel through the ground. Energy waves can be generated by various methods including dynamite charges and large vehicles designed to vibrate the ground (vibroseis).

Site preparation – preparing site for drilling, building access roads, digging reservoirs, and establishing infrastructure (i.e., housing, office, and other amenities reasonably required to facilitate exploration and drilling).

Drilling – drilling test holes to obtain cuttings and core samples, ratholes, mouseholes, and conductor holes (these are the start of the main well hole), including drilling the main hole whether or not it becomes a viable well.

Logging – logging services analyze and record the properties of mud, cuttings, etc. produced through drilling to determine if the well is viable and will go into production.

Abandonment and reclamation – this is the process of plugging a non-viable well, removing infrastructure, and returning the surrounding area to acceptable environmental standards. This may take several years to accomplish and is complete only when a government reclamation certificate is issued. Reclamation work qualifies as part of petroleum exploration only with respect to sites that are not put into production before the certificate is issued. This is because exploration cannot occur without the obligation to complete reclamation. Abandonment or reclamation relating to the cessation of production or transportation activities does not qualify.

 

Production and Transportation

For the purposes of paragraph 15(1)(h), exploration and drilling stops when the completion process commences. The completion process is the procedure by which a viable well is readied for production, as follows.

Installing production casing or coiled tubing – a viable well is cased to prevent the walls from sloughing in and contamination of ground water by oil. It also allows insertion of pumps and other equipment.

Perforation – perforating the casing or tubing, usually by small explosive devices, allows oil to enter the well itself.

Stimulation – stimulating the formation in which the oil is found increases oil flow. Stimulation processes include acidizing and fracturing the petroleum-bearing formation.

In addition to these three completion activities above, activities relating to the following do not qualify as exploring or drilling for petroleum and natural gas.

Oil recovery – including inserting pumps and injecting water or other substances to increase oil flow.

Providing and maintaining storage – on-site storage facilities are often required to store the crude prior to shipment.

Transportation – including activities and facilities for loading crude in trucks, and delivering crude and natural gas to the pipeline network.

 

Combined Exploration and Production Sites

Where a person is involved in both exploration and production, the concession applies only with respect to the site where the exploration and drilling is occurring.

Where one site contains both exploration and production activities, the concession applies only with respect to the portion of the site involved in exploration and drilling.

Please see MFTA/Sec. 15(1)(h)/R.2, for information on deliveries by third parties, in particular, third-party responsibility for determining eligibility for the concession.

MFT - SEC.15(1)(i)/Int.

(1)(i) Tractor Used On Highway For A Farm Purpose

References:

Act: Section 1 “coloured fuel”, “farm”, “farmer”, “highway”, “tractor”

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Interpretation (Issued: 2015/04)

Paragraph 15(1)(i) authorizes the purchase or use of coloured fuel for the purpose of operating a tractor when used on a highway by or on behalf of a farmer for the purposes of the farmer’s farm.

MFT - SEC.15(1)(j)/Int.-R.1

(1)(j) Farm Truck

References:

Act: Section 1 “coloured fuel”, “farm”, “farmer”, “farm truck”

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Interpretation (Issued: 2015/04)

Effective February 20, 2008, Bill 2, Budget Measures Implementation Act 2008 amended paragraph 15(1)(j) to authorize the use of coloured fuel in all vehicles licensed as farm vehicles under the Commercial Transport Act while operating on a highway for a farm purpose.

Previously, use of coloured fuel on a highway was restricted to family farm trucks when used for a farm purpose. This change ensures coloured fuel may be used in all farm vehicles regardless of the farm's business structure.

As a result of the amendment, the Family Farm Truck Emblem program was eliminated. Effective February 20, 2008, B.C. Reg. 97/2008 repealed MFTR subsections1(3) and (4) and MFTR sections14 and 15 as these provisions related to the family farm truck emblem program.

Paragraph 15(1)(j) authorizes the purchase or of coloured fuel for a farm truck being used by a farmer or other person in the operation of the farm. The farm truck is identified with a farm licence plate, also known as an A or G plate, issued by the Insurance Corporation of British Columbia.

R.1 Family Farm Emblems and "A" and "G" Plates (Revised: 2008/04, 2015/04)

Prior to February 20, 2008, paragraph 15(1)(j) authorized the use of coloured fuel in family farm trucks which bore the family farm truck emblem issued by the branch when the truck was being used for farm purposes.

The family farm emblem was provided by the branch if there was satisfactory evidence that the vehicle was a farm vehicle. Evidence that a vehicle was a farm vehicle included a license plate number with an "A" or "G" followed by 5 digits, or in the case of "P" plated vehicles, the vehicle must have been rated classed for farm use only.

To qualify for the family farm emblem the "A", "G" or "P" plated farm vehicle must not have been used in any other business in which the farmer was engaged, such as a processing plant.

It was permissible to license, with "A" or "G" plates, a properly equipped bus used to transport farm workers if the bus is owned or leased by the farmer and only used for transporting the farm workers of that farm. These buses were eligible to receive family farm truck emblems.

Farmers could receive "A", "G" or "P" licence plates from the Motor Vehicle Branch for their vehicles. However, since these plates could be obtained by any farmer the presence of these plates were not sufficient to allow use of coloured fuel. The truck must have displayed the family farm truck emblem issued by the branch.

MFT - SEC.15(1)(k)/Int.

(1)(k) Proceeding And Returning

References:

Act: Section 1 “coloured fuel”, “farm”, “highway”, “highway project area”, “industrial machines”, “road-building machines”

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Interpretation (Issued: 2015/04)

Effective February 22, 2006, Bill 2, Budget Measures Implementation Act, 2006 amended paragraph 15(1)(k) removed the reference to unlicensed farm vehicles under paragraph (i.1) (repealed) and added a reference to paragraph (m) - a motor vehicle that is not licensed to operate on a highway.

Effective February 16, 2005, Bill 8, Taxation Statutes Amendment Act, 2005 amended paragraph 15(1)(k) to clarify that an unlicensed farm vehicle could use coloured fuel when it is proceeding to, or returning from another farm.

Paragraph 15(1)(k) authorizes the purchase or use of coloured fuel for tractors, unlicensed motor vehicles, industrial machines and road-building machines when travelling to or from an off-highway location or highway project area where use of coloured fuel in the vehicle is authorized.

MFT - SEC.15(1)(l)/Int.

(1)(l) VEHICLE WITH TEMPORARY OPERATING PERMIT

References:

Act: Section 1 “coloured fuel”

MFTR: Section 15.2

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Interpretation (Issued: 2015/04; Revised: 2018/11)

Effective March 20, 1987, Bill 13, Motor Fuel tax Amendment Act, 1987 amended the legislation to permit logging trucks and mineral truck operators to use coloured fuel when such vehicles are being operated on a public highway under a temporary operating permit issued under the Commercial Transport Act.

Paragraph 15(1)(l) authorizes the use coloured fuel in prescribed vehicles used by the logging and mining industries (see MFTR/section 15.2/Int.) in limited circumstances (e.g. to take the vehicle for repairs) if operating on a highway under a temporary operating permit issued under the Commercial Transportation Act. This provision is provided to avoid necessity of changing the fuel in the supply tanks of the vehicles from coloured to clear fuel.

If any portion of a trip made by these vehicles is on a highway, other than operating under a temporary permit, clear fuel must be used. However, a refund application of the difference between tax paid on clear fuel and the coloured fuel tax rate can be submitted for the portion of the fuel consumed off-highway under section 22 [refunds where fuel used for certain purposes].

MFT - SEC.15(1)(m)/Int.-R.1

(1)(m) Unlicenced Motor Vehicle

References:

Act: Section 1 “coloured fuel”, “highway”

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Interpretation (Issued: 2015/04)

Effective February 22, 2006, Bill 2, Budget Measures Implementation Act, 2006 added paragraph 15(1)(m) to expand the authorized uses of coloured fuel to include all unlicensed motor vehicles used off-highway. All vehicles previously eligible to use coloured fuel remain eligible. As a result of the amendment, unlicensed vehicles such as snowmobiles, all-terrain vehicles and dump trucks are also eligible to use coloured fuel. Paragraph 15(1)(i.1) is repealed.

R.1 Motor Vehicle Not Licensed To Operate On A Highway (Issued: 2007/07; Revised: 2015/04)

Paragraph 15(1)(m) authorizes the use of coloured fuel in vehicles not licensed to operate on highway.

A licensed motor vehicle is defined as being licensed for use on a public roadway according to conditions set out in the licence. Generally, licensing includes the attachment of correct number plates to the vehicle, the presence of a correct validation decal on a number plate, the Owner's Certificate of Insurance and Vehicle Licence, or a Temporary Operating Permit correctly displayed or carried in the vehicle. Generally, motor vehicles without any of the above are considered unlicensed.

However, an off-road vehicle (ORV) with an ORV number plate is only considered to be licensed if it has a validation decal on the plate. Where an ORV number plate does not display a decal, the ORV can be only be used on Crown land with no highway use permitted.

For information on highways, see MFTA/section 1 “highway”/Int.

MFT - SEC.15(2)/Int.

(2) Supply Tank

References:

Act: Section 1 “coloured fuel”; Section 2; Section 43

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Interpretation (Issued: 2015/04)

Subsection 15(2) provides that despite the authorized uses of coloured fuel in the Act, a person must not carry coloured fuel in supply tank connected to the engine of a motor vehicle if another supply tank connected to the engine of the motor vehicle contains fuel that is not coloured. This requirement, which has been in effect since the inception of the Act, ensures that coloured fuel is not used in motor vehicles on highways.

MFT - SEC.15(3)-(4)/Int.

(3)-(4) Payment Of Tax

References:

Act: Section 1 “coloured fuel”; Section 43

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Interpretation (Issued: 2015/04; Revised: 2017/05)

Effective August 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 15(3) to provide that the due date for payment of tax and the manner of payment of tax are to be prescribed by regulation. This amendment allows for consistent regulations to be made for all remittances under the Act.

Effective April 1, 1989, Bill 33, Finance and Corporate Relations Statutes Amendment Act, 1995 retroactively added subsections 15(3) and (4) which explicitly impose a tax liability where coloured fuel is used for unauthorized purposes. This change was made because of pending litigation in which it became apparent that there was no charging provision to allow the province to recover the difference between the coloured fuel tax rate and the clear fuel tax rate where coloured fuel was used for an unauthorized purpose. section 15(3) therefore provides the authority for a user of coloured fuel to make an assessment equal to the amount of tax that should have been paid.

Persons who use coloured fuel for unauthorized purposes are required to pay tax equal to the difference between the tax already paid on the coloured fuel and the tax payable on the clear fuel that should have been purchased.

However, subsection 15(3) is not an authorization to use coloured fuel for unauthorized purposes. Where this occurs, the person is in contravention of subsection 15(1) and may be subject to a penalty under section 45.3 [penalty for unauthorized purchase or use of coloured fuel] and/or prosecution under paragraph 64(4)(d) [offences].

During the 1993 Legislative Session, authority for such assessments was established under subsection 43(2) [assessment of tax]. An assessment under this section was subsequently challenged in court. The court held that under the existing legislation, the liability for tax was only imposed under subsection 43(2) and that this provision could not be applied retroactively. Consequently, the Act did not impose a tax liability prior to the enactment of section 43(2). Furthermore, because there was no explicit provision imposing a tax liability, the province was open to further challenges and revenue risk.

To remedy this situation, the 1995 amendments established explicit provisions imposing a tax liability on purchasers of coloured fuel who use the fuel for unauthorized purposes. Because of the potential revenue loss, the amendments were made retroactive to April 1, 1989, to coincide with the statutory refund and assessment limitation periods.

Section 15.1 – Authority To Use Coloured Fuel In Certain Vehicles Provided Clear Fuel Tax Rate Is Paid

MFT - SEC.15.1/Int.

REPEALED

Interpretation (Revised: 2009/04, 2015/04)

Effective February 22, 2006, Bill 2, Budget Measures Implementation Act, 2006 repealed section 15.1, which became redundant with the addition of paragraph 15(1)(m) [prohibition against unauthorized use of coloured fuel]. This amendment expanded the authorized uses of coloured fuel to include all unlicensed motor vehicles used off-highway. All vehicles previously eligible to use coloured fuel remain eligible. As a result of the amendment, unlicensed vehicles such as snowmobiles, all-terrain vehicles and dump trucks are also eligible to use coloured fuel.

Effective February 16, 2005, Bill 8, Taxation Statutes Amendment Act, 2005 amended the introduction to subsection 15.1(1) by clarifying that, in addition to use, a person may have purchased coloured fuel for a purpose not authorized in section 15, but only for the purposes specified in subsection 15.1(1). This amendment was required as a result of Bill 8 adding a purchasing restriction for coloured fuel to subsection 15(1) of the Act (see MFTA/Sec. 15 - General/Int. for details). This amendment clarified that coloured fuel could continue to be purchased and used for a non-authorized purpose but only in certain prescribed types of vehicles off highway in mining or logging operations.

Effective March 31, 1999, Bill 52, Taxation Statutes Amendment Act, 1999 amended the Act to establish that coloured fuel may have been used in all unlicensed motor vehicles used off-highway in mineral mining and logging operations, but that tax at the clear fuel rate must have been remitted on all coloured fuel used in vehicles that were not eligible to use the lower-taxed coloured fuel. This concession was provided at the request of industry to reduce the environmental hazard and cost associated with the need to maintain two separate fuel storage tanks at logging and mineral mining sites, one for clear fuel and one for coloured fuel.

This concession did not expand the kind of vehicles authorized to use lowered taxed coloured fuel. The use of lower-taxed fuel continued to be restricted to off-highway use of the following motor vehicles:

• Trucks when used for hauling logs, lumber or minerals,

• crew crummies or buses used exclusively for the transportation of company employees, and

• fire trucks and ambulances when used as fire trucks and ambulances.

Section 16 – Permit Or Licence Required To Bring Fuel Into British Columbia

MFT - SEC.16/Int.

References:

Act: Section 1 “carrier”, “carrier decal”, “carrier licence”, “gasoline”, “motive fuel”, “motive fuel user permit”, “International Fuel Tax Agreement”; Section 71

MFTR: Section 1 “IFTA”, “IFTA commercial vehicle”, Section 17; Section 42; Section 43; Section 46

Bulletin MFT-CT 008

Interpretation (Revised: 2015/04)

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act, (No. 2), 1995 added section 16. This section replaced the previous licence and permit provisions for interjurisdictional carriers to accommodate the requirements of the International Fuel Tax Agreement (IFTA). This amendment was brought into force on January 1, 1996 by B.C. Reg. 550/95, the date BC became a member of IFTA.

Subsection 16(1) establishes that interjurisdictional carriers bringing motive fuel into the province are required to have in their possession either a carrier licence and decals or a motive fuel user permit. Licences are issued to a carrier who regularly operates in BC. Motive fuel user permits are issued to a carrier who infrequently enters the province.

Subsection 16(2) establishes that carriers bringing gasoline into the province are required to have in their possession a carrier licence and decals on the IFTA commercial vehicle.

Subsection 16(3) provides authority for the Lieutenant Governor in Council to prescribe certain classes of carriers or certain types of vehicles as exempt from the licensing and permit requirements.

Section 16.1 – Definitions

MFT - SEC.16.1/Int.

References:

Act: Section 1 “heating oil”, “non-motor fuel oil”; Section 14; Section 16.2; Section 16.3; Section 16.4; Section 16.5; Section 16.6; Section 16.7; Section 16.8

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08; Revised: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added part 3.1 and section 16.1. Section 16.1 provides a definition for "colour."

Section 16.2 – Authority To Colour Heating Oil And Non-Motor Fuel Oil

MFT - SEC.16.2/Int.

References:

Act: Section 14

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08, Revised: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 16.2.

Subsection 16.2(1) provides that a person who is authorized to colour fuel under section 14 [authority to colour fuel] is authorized to colour heating oil and non-motor fuel.

Subsection 16.2(2) because "fuel" does not include heating oil or non-motor fuel oil, the subsection deems "fuel" as used in any term or condition of an authorization under subsection 14(1) [authority to colour fuel] to include a reference to heating oil and non-motor fuel oil.

Subsection 16.2(3) provides that subsections 14(2), (3) and (3.1) apply to the colouring of heating oil or non-motor fuel oil as if the heating oil or non-motor fuel oil were a "fuel."

Section 16.3 – Authority To Sell Coloured Heating Oil And Coloured Non-Motor Fuel Oil

MFT - SEC.16.3/Int.

References:

Act: Section 1 “heating oil”, “non-motor fuel oil”; Section 14.1

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08; Revised: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 16.3.

Under subsection 16.3(1), a person who is authorized to sell coloured fuel under section 14.1 [authority to sell coloured fuel] is authorized to sell coloured heating oil and coloured non-motor fuel oil.

Subsection 16.3(2) provides that a reference to "coloured fuel" in any term or condition of an authorization under subsection 14.1(1) is deemed to include a reference to coloured heating oil and coloured non-motor fuel oil.

Subsection 16.3(3) provides that if a person is not authorized to sell coloured fuel under section 14.1, the director may in writing authorize the person to sell coloured heating oil or coloured non-motor fuel oil. The authorization is subject to the terms and conditions the director considers appropriate.

Subsection 16.3(4) provides that a person authorized to sell coloured heating oil or coloured non-motor fuel oil must not delegate or transfer the person’s authority to sell the coloured fuel.

Subsection 16.3(5) provides that a person must not sell coloured heating oil or coloured non-motor fuel oil unless the person is authorized to do so under subsections 16.3(1) or 16.3(3).

Subsection 16.3(6) provides that subsections 14(4) to 14(9) [authority to colour fuel] applies to an authorization under subsection 16.3(3).

Section 16.4 – Heating Oil Must Be Coloured

MFT - SEC.16.4/Int.

References:

Act: Section 1 “heating oil”

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08; Revised: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 16.4.

Coloured heating oil is intended only for heating purposes and it is coloured for tax purposes as there is no motor fuel tax applicable for heating oil.

Subsection 16.4(1) provides that a person must not sell or offer to sell heating oil if the heating oil is not coloured before it is sold or offered for sale.

Subsection 16.4(2) provides that a person must not buy heating oil if the heating oil is not coloured before it is bought.

Section 16.5 – Prohibitions Against Relabelling – Heating Oil And Non-Motor Fuel Oil

MFT - SEC.16.5/Int.

Tax On Gasoline

References:

Act: Section 1 “heating oil”, “non-motor fuel oil”

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08; Revised: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 16.5.

Subsection 16.5(1) provides that if a person bought a substance as heating oil, then the person must not sell or offer to sell the substances as a fuel or as a non-motor fuel oil.

Subsection 16.5(2) provides that if a person has bought a substance as non-motor fuel oil, then the person must not sell or offer to sell the substance as a fuel or, if the substance was not coloured before the substance was bought, as heating oil.

Subsection 16.5(3) provides that if a person bought a substance as non-motor fuel oil, the substance was not coloured before the substance was bought, and the person is authorized to colour non-motor fuel oil under subsection 16.2(1) [authority to colour heating oil and non-motor fuel oil], the person may sell or offer to sell the substance as heating oil if the person colours the substance before the substance is sold or offered for sale.

Section 16.6 – Declaration Must Be Obtained On Sale Of Non-Motor Fuel Oil

MFT - SEC.16.6/Int.-R.1

References:

Act: Section 1 “non-motor fuel”

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08; Revised 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 16.6.

Section 16.6 requires that if a seller sells non-motor fuel oil, the seller must obtain from the buyer a declaration satisfactory to the director. The completion of the declaration allows the seller to the fuel without collecting motor fuel tax.

R.1 Refunds of Tax for Fuel Used Later for a Non-Motor Purpose (Issued: 2015/04)

A purchaser must provide a completed FIN 480 - Certificate of Exemption - Substances Sold for Use Other Than in Internal Combustion Engines to purchase non-motor fuel oil without paying motor fuel tax. If the required documentation is not completed at the point a sale, tax must be paid as the substance was not sold as “non-motor fuel oil." Even if the fuel is subsequently used for a non-motor purpose, there is no refund available as tax was paid as required under the Act.

Section 16.7 – Unauthorized Uses Of Heating Oil And Non-Motor Fuel

MFT - SEC.16.7/Int.

References:

Act: Section 45.4

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08; Revised 2017/05)

Effective August 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 16.7(5) to provide that the due date for payment of tax and the manner of payment of tax are to be prescribed by regulation. This amendment allows for consistent regulations to be made for all remittances under the Act.

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 16.7.

Section 16.8 – Application Of Provisions To Heating Oil Or Non-Motor Fuel Oil Liable To Be Taxed

MFT - SEC.16.8/Int.

References:

Act: Section 16.7

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08; Revised: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 16.8. The section provides rules for how other sections of the Act apply to heating oil or non-motor fuel oil liable to be taxed under subsection 16.7(5) [unauthorized uses of heating oil and non-motor fuel oil].

Section 17 – Minister May Enter Into Agreement

MFT - SEC.17/Int.

References:

Bulletin MFT-CT 008

Interpretation (Revised: 2015/04)

Effective May 17, 1995, Bill 24, Miscellaneous Statutes Amendment Act, (No. 2), 1995 added section 17. This section provides authority for the minister to enter into the International Fuel Tax Agreement (IFTA) on behalf of the province. IFTA is a multi-jurisdictional agreement that establishes a single uniform system for administering and collecting fuel taxes from interjurisdictional carriers. The province became a member of IFTA on January 1, 1996.

Section 18 – Payments By Minister

MFT - SEC.18/Int.

References:

Act: Section 1 “International Fuel Tax Agreement”, “licensed carrier”

MFTR: Section 1 “IFTA”

Bulletin MFT-CT 008

Interpretation (Revised: 2015/04)

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act, (No.2), 1995 added section 18. This section authorizes the minister to pay out of the consolidated revenue fund tax and other money collected on behalf of other jurisdictions who are members of the International Fuel Tax Agreement (IFTA). This amendment was brought into force on January 1, 1996 by B.C. Reg. 550/95, the date BC became a member of IFTA.

Under IFTA, BC-based carriers who travel regularly in other IFTA jurisdictions submit only one tax return to BC that includes the tax payable to other IFTA jurisdictions. The Ministry of Finance then forwards to the other IFTA jurisdictions the tax and other monies (e.g., penalties and interest charges) collected on their behalf. Other jurisdictions collect BC tax and other monies owed to BC from their home-based carriers and forward it to the Ministry of Finance.

Section 19 – Issue Of Licences And Decals To Carriers

MFT - SEC.19/Int.

References:

Act: Section 1 “carrier”, “carrier decal”, “carrier licence”, “International Fuel Tax Agreement”; Section 50; Section 53

MFTR: Section 1 “IFTA”; Section 18; Section 26

Bulletin MFT-CT 008

Interpretation (Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 added subsection 19(3.1) and subsection 19(3.2). This amendment enables the director to require a bond to be deposited at the time a person applies to receive a new or renewed IFTA licence.

Effective September 2, 2009 (retroactive from October 29, 2009), Bill 2, Budget Measures Implementation Act (No. 2), 2009 amended subsection 19(4) to 1) present the powers of the director in a list, and 2) add express authority to suspend or cancel a license if a carrier fails to comply with a requirement of the director to deposit a bond under section 53 [collection bond].

Effective January 1, 1996, Bill 24, Miscellaneous Statues Amendment Act, (No. 2), 1995 added section 19 which provides the licensing and marking requirements for International Fuel Tax Agreement (IFTA) carriers. This amendment was brought into force on January 1, 1996 by B.C. Reg. 550/95, the date BC became a member of IFTA.

Subsection 19(1) authorizes the director to issue and renew carrier licences or refuse to issue or renew carrier licences. The licence allows a carrier to participate in the IFTA licencing and tax remittance scheme. Circumstances under which the director may refuse to issue or renew a licence would include situations where the applicant does not qualify as a carrier as defined in section 1, or where the carrier has failed to comply with the provisions of the Act or the IFTA agreement.

Subsection 19(2) provides applicants for a carrier licence with the right to obtain written reasons for the director’s refusal to issue or renew a licence to that carrier.

Subsection 19(3) establishes an application for a carrier licence must be in the prescribed form and must contain references to the terms and conditions for maintaining the licence.

Subsection19(4) establishes that the director may cancel or suspend a carrier licence if the carrier fails to comply with the Act, the regulations, the terms and conditions of the licence or the requirements under section 53 [collection bond].

Subsection19(5) establishes that the suspension or cancellation of a carrier licence does not relieve the carrier from any liability under the Act or under the IFTA agreement.

Subsection 19(6) requires that the director provide licensed carriers with decals for each inter-jurisdictional motor vehicle owned or operated by that carrier.

Subsection 19(7) establishes that a licence and decals issued to one carrier are not transferrable to other carriers.

Subsection 19(8) establishes that a carrier may only display decals issued by the director if the carrier is operating in accordance with the provisions of the Act and of the IFTA agreement.

Subsection 19(9) establishes that when a carrier's licence has been suspended or cancelled, the carrier must immediately return the licence to the director and remove all decals from the carrier's motor vehicles.

Section 20 – Refund Of Taxes Paid Or Remitted

MFT - SEC.20/Int.-R.7

(1) General

References:

Bulletin MFT 002; Bulletin GEN 008

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 repealed and replaced subsection 20(1) as a consequential amendment to the Act to remove the reference to mistake of law.

Subsection 20(1) establishes that if a person paid tax where they were not required to do so, a refund must be made to that person.

R.1 Tax Paid Under a Mistake of Law (Revised: 2009/04)

On March 21, 1986, Act was amended to remove the right to claim a refund of tax paid on or after April 1, 1986 when the overpayment of tax was a result of a mistake of law.

A mistake of law occurred when both the government and the taxpayer believed that the Act imposed tax in a particular circumstance and the tax was paid and collected accordingly. It was later found, generally as a result of a court action, that the Act did not impose tax in that circumstance. Under those conditions, only the taxpayer who sued the Crown was able to receive a refund of tax paid from the date of initiating a court action. Other taxpayers who also paid the tax but did not challenge the tax application were not eligible for a refund although they would not be required to pay tax from the date of the court decision.

R.2 Refund Claims for Tax Paid on Inventory (Revised: 2009/04, 2015/04)

When a retail dealer purchases fuel inventory, the supplier collects a security equal to the applicable fuel tax due on the subsequent retail sale.

When fuel tax rates are adjusted, the retailer will normally have inventory on which tax has been paid at a different rate than will be collected from the consumer.

Prior to July 1, 2008, as an administrative policy, the branch did not require retailers to remit the additional tax due on inventory when rates increased, and did not refund tax overpaid when rates decreased.

If a retailer applied for a refund of excess tax paid on inventory when fuel tax rates decreased, the branch would have processed the claim. However, any refund would have been offset by the additional tax due as a result of tax rate increases over the previous four years.

As of July 1, 2008, section 40.1 [change in tax rate and payment of security] governs changes in tax rate and the payment of security. Generally, a retailer must provide an inventory as of the date of the rate change and, if the rate increases, remit additional security; if the rate decreases, the retailer may apply for a refund.

R.3 Interest Rates Payable on Refunds - IFTA (Revised: 2014/04)

Prior to January 1, 1996, the interest rates for all monies owed by the province under the Act were prescribed under the Interest on Overdue Accounts Payable Regulation (B.C. Reg. 215/83).

Effective January 1, 1996, the interest rates on refunds owed to IFTA carriers was amended by B.C. Reg. 558/95 to be 2% above the Canadian Federal Treasury Bill rate on the 15th day of the month immediately preceding the calendar quarter, and is adjusted every calendar quarter. This new formula for interest rates was introduced to accommodate the interest rate provisions of the International Fuel Tax Agreement (IFTA). This amendment also established that interest on such refunds is calculated starting the 91st day after the day the government receives the overpayment or becomes obliged to refund the money, as the case may be.

The interest rates for money owed to carriers under the Act or IFTA are listed on the Interest Rates spreadsheet.

Interest Rates Spreadsheet

Effective Dates

Interest Rates Per Annum

Interest Rates Per Month

July 1, 2014-September 30, 2014

3.00%

.00250

April 1, 2014-June 31, 2014

3.00%

.00250

January 1, 2014-March 31, 2014

3.00%

.00250

October 1, 2013-December 31, 2013

3.00%

.00250

July 1, 2013-September 30, 2013

3.00%

.00250

April 1, 2013-June 31, 2013

3.00%

.00250

January 1, 2013-March 31, 2013

3.00%

.00250

July 1, 2012 - September 30, 2012

3.00%

.00250

April 1, 2012-June 30, 2012

3.00%

.00250

January 1, 2012-March 31, 2012

3.00%

.00250

October 1, 2011 - December 31, 2011

3.00%

.00250

July 1, 2011 - September 30, 2011

3.00%

.00250

April 1, 2011 - June 30, 2011

3.00%

.00250

January 1, 2011 - March 31, 2011

3.00%

.00250

October 1, 2010 - December 31 2010

3.00%

.00250

July 1, 2010 - September 30, 2010

3.00%

.00250

April 1, 2010 - June 30, 2010

3.00%

.00250

January 1, 2010 - Mar 31, 2010

3.00%

.00250

October 1 2009 - December 31, 2009

3.00%

.00250

July 1, 2009 - September 30, 2009

3.00%

.00250

April 1, 2009 - June 30, 2009

3.00%

.00333

January 1, 2009 - March 31, 2009

4.00%

.00417

October 1, 2008 - December 31, 2008

5.00%

.00500

July 1, 2008 - September 30, 2008

6.00%

.00500

April 1, 2008 - June 30, 2008

6.00%

.00583

January 1, 2008 - March 31, 2008

7.00%

.00583

October 1, 2007 - December 31, 2007

7.00%

.00583

July 1, 2007 - September 30, 2007

7.00%

.00583

April 1, 2007 - June 30, 2007

7.00%

.00583

January 1, 2007 - March 31, 2007

7.00%

.00500

July 1, 2006 - September 30, 2006

6.00%

.00500

April 1, 2006 - June 30, 2006

6.00%

.00500

January 1, 2006 - March 31, 2006

6.00%

.00417

October 1, 2005 - December 31, 2005

5.00%

.00417

July 1, 2005 - September 30, 2005

5.00%

.00417

April 1, 2005 - June 30, 2005

5.00%

.00417

January 1, 2005 - March 31, 2005

5.00%

.00417

October 1, 2004 - December 31, 2004

5.00%

.00333

July 1, 2004 - September 30, 2004

4.00%

.00417

April 1, 2004 - June 30, 2004

5.00%

.00417

January 1, 2004 - March 31, 2004

5.00%

.00417

October 1, 2003 - December 31, 2003

5.00%

.00500

July 1, 2003 - September 30, 2003

6.00%

.00417

April 1, 2003 - June 30, 2003

5.00%

.00417

January 1, 2003 - March 31, 2003

5.00%

.00417

October 1, 2002 - December 31, 2002

5.00%

.00417

July 1, 2002 - September 30, 2002

5.00%

.00333

April 1, 2002 - June 30, 2002

4.00%

.00417

January 1, 2002 - March 31, 2002

5.00%

.00583

October 1, 2001 - December 31, 2001

7.00%

.00583

July 1, 2001 - Septemer 30, 2001

7.00%

.00583

April 1, 2001 - June 30, 2001

7.00%

.00667

January 1, 2001 - March 31, 2001

8.00%

.00667

October 1, 2000 - December 31, 2000

8.00%

.00667

July 1, 2000 - September 30, 2000

8.00%

.00583

April 1, 2000 - June 30, 2000

7.00%

.00583

 

R.4 Interest Rates Payable - Non-IFTA

The interest rates for monies owed by the province under the Act, other than monies owed to IFTA carriers (see R.3), are the same as the interest rates specified for the Interest Rate Under Various Statutes Regulation (see IRUVSR/Sec.1/R.1). These rates are prescribed under the Interest on Overdue Accounts Payable Regulation (B.C. Reg. 215/83).

R.5 Fuel Tax Rate Changes and Restricted Collectors (Revised: 2009/04, 2015/04)

Prior to July 1, 2008, when a fuel tax rate increased, most wholesale dealers were not required to remit the difference between the new and old rates on fuel they held in inventory on that date. Likewise they did not apply for a refund of the difference if the fuel tax rate decreased. Wholesalers generally do not own the fuel in their storage tanks and only act as agents for the major oil companies.

Prior to December 1, 1993, this policy also applied to fuel purchased in BC and held by restricted collectors, even though such dealers own the fuel and purchase it on a tax-included basis from the oil companies. Restricted collectors were fuel dealers who were only appointed as fuel tax collectors with respect to fuel that they import into the province for resale.

However, applying the policy in this way to fuel purchased in BC by restricted collectors was inconsistent with how some bulk agents were required to pay for their inventory.

Effective December 1, 1993, restricted collectors were required to remit the additional tax on fuel purchased in BC which they hold in inventory when an increase occurred. Restricted collectors failing to do so would have been assessed by the branch for the tax that should have been remitted. If the rate decreases, restricted collectors were entitled to a refund of the difference between the new rate and the old rate.

Restricted collectors based in BC were advised in writing of this change in policy.

R.6 Motive Fuel User Permit: Refund of Deposit (Revised: 2009/04, 2015/04)

Under section 16 of the Act and subsection 40(1) of the MFTR, a person bringing motive fuel into the Province in the supply tank of a commercial vehicle may be issued a motive fuel user permit upon payment of a deposit. The deposit is based on the distance the vehicle will travel in the province.

In the case of an overpayment of the deposit, because it is considered to be an overpayment of tax, a refund may be issued under the authority of subsection 20(1) of the Act. The fact that the overpayment was made on a deposit and not a payment of tax does not render subsection 20(1) of the Act ineffective because a deposit is interpreted to be the same as "an amount equal to taxes" in the legislation.

R.7 Weight to Volume Conversion (Issued: 2003/05)

The amount of marine fuel exported to the United States may be measured in metric tonnes because of the large volume of fuel. Where this fuel is exported tax paid, the purchaser may be entitled to a refund. Calculation of the refund is based on the litres of fuel purchased and not on the metric tonnes. Therefore the volume must be converted from metric tonnes to litres.

To calculate the volume of fuel in litres, the following two-step formula is used:

  1. Metric Tonnes divided by Density* = Cubic meters
  2. Cubic meters multiplied by 1,000 = Litres

This calculation must be used to verify that, where the seller's invoice indicates weight in tonnes, the amount of tax remitted corresponds to the amount of tax refunded.

*The density is normally indicated on the information provided by the recipient of the fuel.  The volume of litres may also be included.

Section 20 – Refund Of Taxes Paid Or Remitted

MFT - SEC.20(2)/Int.-R.1

(2) Overpayment Of Tax

References:

Bulletin GEN 008

Interpretation (Issued: 2009/04; Revised 2015/04)

Effective July 30, 1998, Bill 44, Miscellaneous Statutes Amendment Act, 1998 amended the Act to provide explicit authority to refund overpayments of tax. Such overpayments were not specifically addressed in the previous refund provision. However, by administrative policy, the branch had always provided refunds on overpayments. The establishment of an explicit provision ensures that all taxpayers are aware of their right to apply for such refunds.

Subsection 20(2) provides that if a collector has remitted an amount as collected taxes that the collector neither collected nor was required to collect, the director must refund this amount to the person.

R.1 Reduction in Tax Rates (Issued: 2001/12)

Effective August 1, 2001, the tax rate on jet fuel was reduced from 5 cents to 2 cents per litre (see MFTA/Sec. 7/Int.).

Under subsection 7(2), where fuel is imported for use it is subject to tax that was due at the time the fuel is used. If the fuel was brought into the province in July 2001 or earlier and used in August 2001 or later, the purchaser was eligible for the reduced tax rate.

Collectors and retailers would have had inventories on hand on which they paid security reflective of the higher tax rate, but which were sold after July 31, 2001 at the lower rate. Because of the rate change, the security that was paid was greater than the amount payable by the consumer and was therefore paid in error. Subsection 20(1) provides for a refund of taxes or an amount equal to taxes that have been paid in error. A refund equal to the difference in the rate may have been claimed where the scenario outlined above had occurred.

Under subsection 7(1), where the purchaser purchases the fuel in the province, the fuel is subject to the tax rate when the fuel is purchased. Fuel bought before July 31, 2001 was therefore subject to the higher tax rate regardless of when it was used and no refund was available under subsection 20(1).

Section 20 – Refund Of Taxes Paid

MFT - SEC.20(3)/Int.

(3)

References:

Act: Section 1.1

Interpretation (Issued: 2014/08; Revised 2015/04)

Effective May 1, 2012, Bill 21, Budget Measures Implementation Act, 2012 added subsection 20(3). Subsection 20(3) was added for the purposes of the new rules regarding imported fuel under section 1.1. The subsection provides that subsection 20(2) applies to a person who sells fuel in a sale to which paragraphs 1.1(2)(a)-(c) [fuel imported by ship] apply as if the person were a collector.

Section 20.1- Refund Of Taxes In Accordance With Nisga'a Nation Taxation Agreement

MFT - SEC.20.1/Int.

References:

Act: Section 25; Section 50

Interpretation (Revised: 2009/04, 2014/08, 2015/04)

Effective February 28, 2013, Bill 2,2013 Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 amended section 20.1 by making the definition of "taxation agreement" match the definition in section 155 of the Provincial Sales Tax Act.

Subsection 20.1(1) provides that in section 20.1, “person” has the same meaning as claimant in paragraph 6(b) of the Taxation Agreement and "Taxation Agreement" has the same meaning as in section 6.1 of the Nisga’a Final Agreement Act.

Subsection 20.2(2) provides that if the Taxation Agreement provides that a person is entitled to a refund of tax paid by the person under the Act, on application and on receipt of evidence establishing that the person is so entitled, the director must pay that refund to that person.

Nisga'a Land Settlement Agreements

The primary agreement settling Nisga'a land claims is referred to as the Nisga'a Final Agreement. Its major impact on the administration of the PST exemption based on section 87(b) of the Indian Act (Canada) is the following:

  • Former "band" entities are no longer eligible for the point of sale exemption from tax; and
  • The exemption for individual Nisga'a citizens who are native Indians will expire eight years after the coming into effect of the Agreement.

Associated with, but separate from, the Nisga'a Final Agreement is the Nisga'a Taxation Agreement. This Agreement establishes that Nisga'a government entities are eligible for a refund of social service and motor fuel tax paid on qualifying purchases as outlined below.

The effective date of the Nisga'a Final Agreement is May 11, 2000.

Section 87 Exemption for Individual Nisga'a Citizens

Nisga'a citizens who qualify for exemption as native Indians under the Indian Act (Canada), and who are in possession of a Certificate of Indian Status card, were eligible for the point of sale exemption on former Nisga'a reserves and on other reserves in Canada for eight years following the signing of the Nisga'a Final Agreement. Status Indians who are not Nisga'a citizens will also remain eligible for the point of sale exemption on former Nisga'a reserves for eight years. These exemptions expired on June 1, 2008.

Not all Nisga'a citizens qualify as Indians. The Nisga'a government has the right to determine who is a Nisga'a citizen and may include any persons living on Nisga'a land. A non-Indian who is deemed to be a Nisga'a citizen is not an Indian for the purposes of section 87 of the Indian Act (Canada).

Refunds under the Nisga'a Taxation Agreement

Under the terms of the Nisga'a Final Agreement, as of May 11, 2000, former band entities are no longer eligible for a point of sale exemption from provincial sales or fuel taxes. However, some Nisga'a government bodies are eligible for a refund of tax paid on qualifying purchases.

Nisga'a government bodies eligible for the exemption are:

  • The “Nisga'a Nation” as represented by the “Nisga'a Lisims Government”;
  • A “Nisga'a Village” represented by a “Nisga'a Village Government”;
  • A trust, board, commission, tribunal or similar body, established by the “Nisga'a Nation”, a “Nisga'a Village”, or by any combination of the “Nisga'a Nation” or a “Nisga'a Village”; and
  • A corporation incorporated under federal or provincial laws, all of the shares (except directors' qualifying shares) of which are owned by the “Nisga'a Nation”, a “Nisga'a Village”, a Nisga'a settlement trust, or any combination of those persons.

Nisga'a government bodies qualify for a refund of motor fuel taxes they pay under the Motor Fuel Tax Act on fuel purchased at any place in the province or consumed at any place in the province, provided that both of the following criteria are met:

  • The fuel was not acquired for consumption or use in the course of a business or other activity for profit or gain. For example, if a Nisga'a village purchases fuel and maintains it in a tank that was used only for Nisga'a municipal vehicles—snow plows, graders, etc—the fuel is exempt. However, if the fuel is made available for use in personal vehicles of Nisga'a government members, the fuel is not exempt.
  • Substantially all of the fuel must be consumed, or used in respect of, performing a function of government, within Nisga'a lands, under the Nisga'a Final Agreement or a subsequent agreement between Canada and BC, together or separately, and the Nisga'a Nation.

Exempt fuel must be acquired for performing a government function related to the governing of Nisga'a lands. The fuel does not have to be consumed on Nisga'a lands.

For example, if representatives from the Nisga'a Lisims government attend meetings in Victoria to address issues related to the Nisga'a Final Agreement, and they rent a car at the airport for transportation to and from the airport and in Victoria, taxes paid on fuel consumed in the vehicle are refundable to the Nisga'a government because the vehicle is used with respect to governing Nisga'a lands. (PST paid on the rental may also be refundable under section 155 of the Provincial Sales Tax Act.)

“Nisga’a Urban Locals” are entities established for the purpose of participation in “Nisga’a

Lisims Government” by Nisga’a citizens residing outside of the Nass Area. Urban locals are not eligible for a refund of motor fuel tax on their purchases of fuel because they are not Nisga'a government entities and the fuel is not consumed with respect to the governing of Nisga'a lands.

If fuel on which a refund has been paid under section 20.1 is subsequently consumed or used in the course of a business or other activity for profit or gain, tax will apply to the fuel at the time it is consumed or used in the course of the business or other activity.

Section 20.101 - Treaty First Nations Tax Refunds

MFT - SEC.20.101/Int.

References:

Act: Section 25; Section 50

Interpretation (Issued: 2011/03; Revised: 2015/04)

Effective April 3, 2009, section 20.101 was added to the Act by 2007, c.36, s.124 per B.C. Reg. 55/09. It was enacted with section number 20.11, duplicating an existing section’s number. Effective September 2, 2009 (retroactive from October 29, 2009), this section was renumbered 20.101.

Section 20.101 provides authority to grant a refund of motor fuel tax to a person who is entitled to one under a tax treatment agreement between the province, the Government of Canada and a First Nation.

Section 20.11 - Refund Of Security

MFT - SEC.20.11/Int.

References:

Act: Section 14; Section 14.1; Section 16.2; Section 20.12; Section 20.2; Section 50

MFTR: Section 2.03

Interpretation (Issued: 2009/04; Revised: 2016/01)

Effective July 1, 2015, Bill 10, Budget Measures Implementation Act, 2015 amended section 20.11 by amending subsections (2), (3) and (3.1) and adding subsections (3.01) and (3.2).

Subsection (2) was amended to make it subject to subsection (3.01).

Subsection (3) was amended to make it subject to subsection (3.01) and to ensure that a refund is not payable under both subsection 20.11(3) and section 20.12 [refund of security on coloured fuel for deputy collectors and retail dealers]. Section 20.12 only provides for refunds to deputy collectors and retail dealers who buy clear fuel, colour the fuel and sell the coloured fuel to a person who is liable to pay tax.

Subsection (3.01) was added to clarify that a refund is only payable under subsections (2) and (3) with respect to coloured fuel if a person has complied with the requirements under section 14 [authority to colour fuel] and section 14.1 [authority to sell coloured fuel].

Subsection (3.1) was amended to make it subject to subsection (3.2).

Subsection (3.2) was added to clarify that a refund is only payable under subsection (3.1) with respect to heating oil or non-motor fuel oil if a person has complied with the requirements under section 16.2 [authority to colour heating oil and non-motor fuel oil].

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added subsections 20.11(3.1) and (6) for provisions relating to heating oil and non-motor fuel oil.

Effective May 1, 2012, Bill 21,Budget Measures Implementation Act, 2012 added subsection (1.1) because of the new rules under section 1.1 [fuel imported by ship] governing imported fuel.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008, added section 20.11 as a consequential amendment to the Act.

Section 20.11 authorizes refunds of security paid by collectors, deputy collectors and retail dealers. Most of its provisions are consistent with section 37 the Carbon Tax Act.

Section 20.11(1) provides that if the director is satisfied that a collector has paid security when the collector should not have paid security, the director must refund that amount to the collector.

Subsection 20.11(1.1) provides that subsection 20.11(1) applies to a person who sells fuel in a sale to which section 1.1(2)(a) to (c) applies as if the person were a collector.

Section 20.11(2) provides that if a collector, deputy collector or retail dealer has paid security on fuel and did not collect tax on that fuel because it was sold to a purchaser exempt from tax or sold to a person who was not a purchaser (e.g., exported out of the province), the collector, deputy collector or retail dealer is entitled to a refund.

Subsection 20.11(3) allows a refund of security paid by a collector, deputy collector or retail dealer on fuel that would be sold to a purchaser at one tax rate but sold a lower tax rate. There is no comparable refund provision in the Carbon Tax Act.

Subsection 20.11(3.1) provides a refund if a collector, deputy collector, or retail dealer paid security on a substance bought as fuel and the substance was or will be sold as heating oil or non-motor fuel oil.

Subsection 20.11(4) provides that if a refund has been provided by the director to a deputy collector or retail dealer, the deputy collector or retail dealer must not request a refund of the security from the person who sold them the fuel.

Subsection 20.11(5) provides that if a vendor, wholesale dealer or retail dealer receives a refund of security under subsections 20.11(2) or 20.11(3) and subsequently receives security or collects tax on the fuel, the vendor, wholesale dealer or retail dealer must pay the amount to the government.

Subsection 20.11(6) provides that if a vendor, wholesale dealer or retail dealer receives a refund under subsection 20.11(3.1) for a substance and subsequently receives an amount as security or tax as if the substance were a fuel, the vendor, wholesale dealer or retail dealer must pay the amount to government.

Section 20.12 - Refund Of Security On Coloured Fuel For Deputy Collectors And Retail Dealers

MFT - SEC.20.12/Int.

References:

Act: Section 1 "coloured fuel", "director", "deputy collector", "farmer", "purchaser", "retail dealer", "security"; Section 5; Section 5.1; Section 14; Section 14.1; Section 20.11

Interpretation (Issued: 2016/01)

Effective July 1, 2015, Bill 10, Budget Measures Implementation Act, 2015 added section 20.12 to provide a specific refund of security to deputy collectors and retail dealers who buy clear fuel, colour it and then sell the coloured fuel in accordance with the Act.

Subsection 20.12(1) only applies if the deputy collector is not able to obtain a refund under subsection 20.11(2). All refunds where the deputy collector paid security and subsequently sold coloured fuel to an exempt purchaser should be provided under subsection 20.11(2). Similarly, Subsection 20.12(3) only applies to a retail dealer who sold "coloured fuel to a purchaser who was liable to pay tax". All refunds where the retail dealer paid security and subsequently sold the fuel to an exempt purchaser should be provided under subsection 20.11(2).

The amount of the refund for deputy collectors under subsection 20.12(2) is the difference between security paid and security at 3 cents per litre. The amount of the refund for retail dealers under 20.12(4) is the difference between security paid and the tax collected from a purchaser.

Section 20.2 - Refunds When Joint And Several Liability

MFT - SEC.20.2/Int.

References:

Act: Section 20; Section 20.11; Section 20.12; Section 45.1; Section 50

Interpretation (Issued: 2015/04; Revised: 2016/01)

Effective July 1, 2015, Bill 10, Budget Measures Implementation Act, 2015 amended subsection 20.2(1) to add a reference to section 20.12 [refund of security on coloured fuel for deputy collectors and retail dealers]. This amendment is consequential to the addition of section 20.12 and ensures the refund provisions work as intended.

Effective May 13, 2004, Bill 34, Provincial Revenue Statutes Amendment Act, 2004 added section 20.2.

Under section 20.2, if a corporation’s board member who is jointly and severally liable with the corporation under section 45.1 [board member's liability] contributes to a total payment of MFT owed by the corporation during the period when the member was jointly and severally liable, and if part or all of the total payment is an overpayment, the director of MFT can refund part or all of the overpayment to the member.

Section 20.2 operates in spite of the relevant refund provisions that require the payment of a refund of amounts collected or security to a corporation (subsection 20(2) and section 20.11).

Under paragraph 20.2(1)(a), if a single board member contributed to the total payment, the member’s refund is the lesser of:

  • The overpayment; and
  • The member’s contribution. (This maximum amount ensures that the member does not receive part of the overpayment that may be owed to the corporation.)

Under paragraph 20.2(1)(b), if two or more board members contributed to the total payment, each member’s refund is the lesser of:

  • (The member’s contribution ÷ total member contributions) x the overpayment; and
  • The member’s contribution (this maximum amount ensures that the member does not receive part of the overpayment that may be owed to another member or to the corporation).

A board member who has contributed less than the total amount owed can receive a refund even if another member contributed more than the total amount owed. The total (1)(b) refund is allocated to all board members who contributed regardless of how much each member or the corporation contributed.

Under paragraph 20.2(1)(c), the remainder of an overpayment partly refunded under (1)(a) or (1)(b) can be refunded to the corporation. The amount refunded to the corporation cannot exceed the corporation’s contribution to the total payment, so that the corporation does not receive any part of the overpayment that may be owed to a board member.

Under subsection 20.2(2), the total amount refunded under 1(b) must be based on “the ratio of the amounts paid by the board members who are jointly and severally liable”. This subsection ensures that the total amount refunded to board members does not include any part of the overpayment that may be owed to the corporation. It also ensures that a member does not receive part of the overpayment that may be owed to another member or to the corporation.

Under subsection 20.2(3), only a board member or corporation who applies for a refund under this section can receive one. No refund is automatically paid to a board member who has contributed to an overpayment, or paid to the corporation. Every board member and the corporation must apply for their section 20.2 refunds separately, and each can apply at different times.

A refund auditor who audits a section 20.2 refund application must determine how much each jointly and severally liable board member (even one who has not applied for a refund) contributed, and how much the corporation contributed.

Section 21 - Refund Or Deduction For Bad Debts

MFT - SEC.21/Int.-R.2

References:

Act: Section 35; Section 50

MFTR: Section 3.1; Section 52

Bulletin CTB 001

Interpretation (Revised: 2016/01)

Effective June 9, 2015, Bill 13, Finance Statutes Amendment Act, 2015 repealed and replaced section 21. The section authorizes a collector, deputy collector or retail dealer to make a deduction or claim a refund on the sale of fuel when they write off, within 4 years of the date on which they remitted or paid tax or security on the fuel, an amount owing by the person who bought the fuel. Accordingly, the date of the write-off is the starting point for the limitation period in which the refund must be claimed.

The amendment also prevents collectors from making a deduction and claiming a refund for the same amount.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 21 as a consequential amendment to the Act, to clarify that a refund or deduction for bad debts may be made with respect to both tax and security. There was no change in existing administrative practices as a result of this amendment.

Effective March 23, 1994, Bill 19, Taxation Statutes Amendment Act, 1994 added section 21 to the Act. It permits a proportional refund of tax remitted on credit sales that are subsequently written off in whole or in part as bad debt. The formula for calculating the refund is in section 3.1 of the Motor Fuel Tax Regulation (added by B.C. Reg. 196/94, which is also effective March 23, 1994).

Prior to March 23, 1994, under administrative practice, any money received by the collector or dealer up to the full amount of tax owing was deemed to be payment of the tax owing. The collector or dealer received a refund only if the payment received from the purchaser was less than the tax owing.

Section 21 gives the director the discretionary power to grant a refund to collector, deputy collector or retail dealer if that person has remitted tax or paid security on fuel, the buyer of the fuel subsequent fails to pay, and the person writes off as unrealizable or uncollectible the amount owing by the buyer.

Subsection 20(1) provides authority for the director to provide a refund.

Subsection 21(2) outlines the following three criteria that must be met before a refund can be made:

  • The tax must have been remitted or the security was paid;
  • The purchaser must not have paid the full amount owing on the sale including the tax or security; and
  • The collector or dealer must have written off the debt as uncollectible.

Note the wording “that sale” in subparagraph 21(2)(b)(i), which indicates that a qualifying uncollectable amount is the amount remitted in respect of a single sale. If a refund applicant failed to collect tax on more than one credit sale to a customer, the formula given in MFTR section 3.1 for refunds under this provision applies to each uncollected amount, not to the total outstanding amount in the customer account.

Subsection 21(3) provides that a collector may deduct the amount of its refund from the amount of security or tax it is required to pay or remit in the reporting period that it wrote off the debt as unrealizable or uncollectible.

Subsection 21(4) provides that if a collector received a refund or made a deduction, and that collector recovers some or all of the debt, then it must add the amount recovered to the tax or security it is to remit or pay for the reporting period in which it made the recovery.

Subsection 21(5) requires a wholesale or retail dealer who is not a collector to pay to the government tax or security on any money received after the account was written off and after a refund of tax remitted on the account had been received.

R.1 Limitation Period for Bad Debt Refunds (Issued: 2011/03)

The consumption tax statutes entitle businesses to a proportional refund of tax that was remitted but was uncollected on a bad debt that has been written off. The limitation period for claiming a refund for tax remitted on a bad debt is four years from the date the vendor paid the tax.

R.2 Sales of Bad Debt Accounts Receivables (Issued: 2015/04)

Section 21 provides a proportional refund of tax remitted on a credit sale whose debt is subsequently written off as uncollectable. Under the legislation, the right to claim the refund is vested in the collector, deputy collector or retail dealer who in respect of the credit sale remitted or paid the tax or security. A collector, deputy collector or retail dealer who sells a customer’s debt cannot claim a refund under this section in respect of the debt - i.e., the debt was not bad before the collector, deputy collector or retail dealer sold it.

Note: the third party who purchased the debt cannot claim a bad debt refund because they do not met the criteria under subsection 21(2) - they are not the collector, deputy collector or retail dealer who remitted or paid the tax or security.

Section 22 - Refund Where Fuel Used For Certain Purposes

MFT - SEC.22/Int.-R.1

References:

Act: Section 50

Bulletin MFT-CT 003

Interpretation (Revised: 2009/04, 2015/04)

Effective February 20, 2008, Bill 2, Budget Implementation Measures Act, 2008 amended subsection 22(1) by replacing “family farm truck” with “farm truck” as a result of the elimination of the family farm truck emblem program.

Effective April 1, 1999, Bill 52, Taxation Statutes Amendment Act, 1999 amended section 22 as a consequence of the establishment of section 13.1, which dedicated a portion of the tax on clear fuels to provide funding of the BC Ferry Corporation. The amendment established that the refund included the $0.01-per-litre tax payable under (repealed) section 13.1 of the Act to the BC Ferry Corporation.

Effective March 26, 1997, Bill 2, Budget Measures Implementation Act, 1997 amended this section to establish a refund of the difference between the clear and coloured fuel tax rates if clear fuel was used in a family farm truck while being operated in the United States for a farm purpose. This amendment allows farmers to continue to receive the benefit of the lower coloured fuel tax rate for fuel consumed in transporting their farm produce to the United States. The use of coloured fuel on public roads has been prohibited in the United States as a result of regulatory changes.

Section 22 authorizes a refund of tax equal to the difference between the tax paid on clear fuel and the tax that would have been payable had the fuel been coloured fuel if the clear fuel was used to operate a motor vehicle for a specific purpose for which the use of coloured fuel is authorized. The section outlines the specified purposes:

  • Paragraph 15(1)(d),
  • Paragraph 15(1)(e),
  • Paragraph 15(1)(h), and
  • Paragraph 15(1)(j) (in respect of fuel used in a farm truck while being operated internationally)

The eligible vehicles for the logging and mining industries are prescribed by section 15.2 of the MFTR.

R.1 Clear Fuel Used by Farmers on Route to the United States (Issued: 2005/02; Revised: 2009/04)

If a farmer purchases clear fuel in BC for a farm truck traveling to the United States for the purposes of the farm, the farmer is eligible for a refund of the difference between the tax paid on the clear fuel and the tax that would have been payable on coloured fuel. Since farmers are eligible for an exemption from tax on coloured fuel, farmers are eligible for a refund of all tax paid on clear fuel in these circumstances.

To qualify for the refund, the farmer must be able to support the claim that the farm truck was used internationally for a farm purpose.

Section 22.1 - Refund To Purchaser Of Coloured Fuel Who Pays Tax Under Section 5.1, But Uses Fuel For Authorized Purpose

MFT - SEC.22.1/Int.

References:

Act: Section 1 "coloured fuel", "director", "purchaser", "retail dealer"; Section 5; Section 5.1; Section 15

Interpretation (Issued: 2016/01)

Effective July 1, 2015, Bill 10, Budget Measures Implementation Act, 2015 added section 22.1 to provide a specific refund to a purchaser of coloured fuel who is required to pay tax at the clear fuel rate because they did not provide the declaration required under section 5.1 [tax on coloured fuel if declaration not obtained].

To be eligible for a refund, the director must be satisfied that the purchaser used the coloured fuel for a purpose that is authorized under section 15 [prohibition against unauthorized purchase or use of coloured fuel].

Section 23 - Persons With Disabilities

MFT - SEC. 23/Int. - R.1

References:

Act: Section 1 “Person with disabilities”; Section 50

Bulletin MFT 004

Interpretation (Revised: 2008/08, 2015/04)

History of Refund

1928 Gasoline Tax Act enacted. The Act included a provision for a rebate of tax paid on gasoline "consumed by any person who has suffered the loss of a limb as a result of service in the Great War".

1929-1947 Eligibility expanded to include "any person who has suffered the loss of limb or who is in receipt of a one-hundred-per-centum disability pension through active service in any war while in His Majesty's service".

1959 The Gasoline Tax Act Amendment Act, 1959 expanded eligibility to include a person "who is permanently confined to a wheelchair".

1965-04-02 Order in Council 970/65 clarified that "a person who is permanently confined to a wheelchair shall be deemed to include a person who has suffered permanently the complete functional loss of his lower limbs."

1980-07-04 Order in Council 253/80 expanded eligibility (effective March 12, 1980) to include a person who "receives, or would receive but for having attained the age of 65, benefits as a handicapped person under the handicapped program under the Guaranteed Available Income for Need Act".
This order also restricted the rebate of tax with respect to "only one motor vehicle owned or leased by him" and to a person "where he is the holder of a valid driver's license issued under the Motor Vehicle Act for the purpose of operating vehicle".

1986-03-21 The Motor Fuel Tax Amendment Act, 1986 expanded eligibility to include "a person who has been certified by a medical practitioner as suffering from a permanent impairment of locomotion to the extent that the use of public transportation by him would be hazardous".

1991-08-01 The Miscellaneous Statutes Amendment Act, 1991:

  • Expanded eligibility to include a person who "has been certified by a medical practitioner as suffering from a permanent sight impairment to the extent that the person would not be eligible to hold a driver's licence under the Motor Vehicle Act”;
  • Removed the requirement that a handicapped person hold a valid driver's licence. Instead, eligible persons were required to be 16 years of age of older and own or lease a motor vehicle; and
  • Capped the amount of tax refundable at $200 per person each year, calculated from August 1 to July 31. BC transit tax remained eligible for refund, but was included in calculating the $200 yearly maximum.

1992-04-01 Bill 8, Motor Fuel Tax Amendment Act, 1992 increased the annual cap from $200 to $300, retroactive to August 1, 1991.

1994-03-23 Bill 19, Taxation Statutes Amendment Act, 1994 increased the annual cap from $300 to $400, retroactive to August 1, 1993.

1997-03-31 Bill 15, Disability Benefits Programs Act, 1997 replaced all references in the Act to "handicapped persons" with "Persons with Disabilities" throughout the Act (brought into force by B.C. Reg. 79/97).

2003-01-01 The refund year was administratively adjusted to run from January 1 to December 31 rather than August 1 to July 31.

2004-02-18 Bill 6, Taxation Statutes Amendment Act, 2004 increased the annual cap to $500, starting with the refund claim period January 1 to December 31, 2004.

2008-02-20 Bill 2, Budget Measures Implementation Act, 2008 expands the definition of persons with disabilities to include persons certified by a medical practitioner as having a permanent mental disability to the extent that it would be hazardous for the person to use public transportation.

2012-08-01 Bill10, Nurse Practitioners Statutes Amendment Act, 2011 amended the definition of persons with disabilities to add nurse practitioners as health professionals who may certify persons as suffering from disabilities listed in the definition of “person with disabilities”. This amendment was brought into force by B.C. Reg. 121/2012.

R.1 Motor Vehicle Ownership (Revised: 2017/09)

To qualify for a refund of fuel tax under section 23, a person with disabilities must own or lease the motor vehicle in which the fuel is consumed. Historically, this was interpreted to mean that the disabled person's name had to appear on the vehicle registration documents as the registered owner or as a joint owner.

In May 1993, it was concluded that the Motor Vehicle Act does not suggest that the registered owner is the only owner, or that registration is the only conclusive proof of ownership.

The Branch accepts the following as proof that a person with a disability owns a motor vehicle:

  • His or her name appears on the vehicle registration documents as the registered owner or joint owner; or
  • The registered vehicle owner completes a vehicle ownership declaration indicating that the person with a disability is a joint owner of the motor vehicle.

Section 24 - Motive Fuel Refund

MFT - SEC. 24/Int.

References:

Act: Section 50

Interpretation (Revised: 2015/04)

Effective April 1, 1992, (Bill 8, 1992), the amount of refund payable under section 10 is set at $0.005 per litre. Prior to this date, the amount of refund was set at $0.0044 per litre.

Motive fuel (diesel) is used primarily in commercial vehicles. Where it is purchased for use in a private passenger vehicle, section 10 authorizes a refund of the difference between the motive fuel tax rate and the gasoline tax rate. This puts non-commercial users of diesel fuel on an equal footing with users of gasoline.

Section 24.1 - Refunds Authorized Or Required Under The Regulations

MFT - SEC. 24.1/Int.

Interpretation (Issued: 2016/06)

Effective June 23, 2014, Bill 8, Budget Measures Implementation Act, 2014 added section 24.1 to provide for the payment of refunds from out of the consolidated revenue fund if the director is authorized or required, by the regulations, to pay the refund.

Section 25 - Claim For Refund

MFT - SEC. 25/Int.

References:

Act: Section 20.1; Section 20.101; Section 43; Section 71

Interpretation (Issued 2009/04; Revised 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 amended section 25 by repealing and replacing subsection 25(1). The new subsection provides what a person must submit to claim a refund, other than one under section 20.1 [Refund of taxes in accordance with Nisga'a Nation Taxation Agreement] or section 20.101 [Treaty first nation tax refunds]. Subsection 25(2.1) is also added.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008, amended section 25 as a consequential amendment to the Act. Subsection 25(2) amended to correct an incorrect reference to the director. Members of the board of directors of a corporation are called board members in the Motor Fuel Tax Act to distinguish them from the director who is responsible for the administration of the act. Subsection 25(3) was added.

Effective June 12, 1990 (Bill 39, 1990), this section was amended to require all refund claims to be signed by the claimant. Where the claimant is a corporation, the refund application must be signed by a board member or authorized employee of that corporation. This requirement ensures that claimants are fully informed of actions being taken on their behalf.

Subsection 25(1) provides that in order for a refund to be granted by the director, an application must be submitted. The director will specify the form of the application, and the applicant must provide information to the director sufficient to satisfy the director that the applicant is entitled to the refund.

Subsection 25(2) provides that for the purposes of paragraph 25(1)(a), if the person who paid or remitted the amount claimed is a corporation, the application must be signed by a board member or authorized employee of the corporation.

Subsection 25(2.1) provides that the director is not required to pay a refund unless the requirements of subsection 25(1) and 25(2) are met.

Subsection 25(3) provides for the netting out tax or security owing and the amount of the refund claimed. The subsection provides that instead of submitting a refund application, the person can record the refund amount on their return and deduct the refund amount from the tax or security required to be remitted by the person.

For example, a collector is required to remit $10,000 of security on all sales for the month of August, and is entitled to a refund of $1,000 for a sale to an exempt purchaser in August. The collector may deduct the refund claim from the total payable and pay a net amount of $9,000.

Section 26 - Refund Limits

MFT - SEC. 26/Int.

References:

Bulletin GEN 008; Bulletin MFT 002

Interpretation (Issued: 2009/04; Revised 2016/01)

Effective June 9, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 26. The amendment adds a specific 4 year limitation period for a person claiming a bad debt refund. The amendment prevents a person from receiving a refund under subsection 21(5) [bad debt refund] if the claim for the refund is more than 4 years after the date the person writes off the amount as unrealizable or uncollectable.

The previous time limit of 4 years after an amount was "paid" was more difficult to interpret for the purpose of a bad debt write-off.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 26(2) as a consequential amendment to the Act. Subsection 26(2) is amended to be consistent with amendments made in other consumption tax statues.

Effective May 1, 2007, Bill 2, Budget Measures Implementation Act, 2007 reduced the refund limitation period from six years to four years to be consistent with the reduction in the audit assessment period. Therefore, refunds received on or after May 1, 2007 are subject to a four year limitation.

Effective June 5, 1992 (Bill 31, 1992), the limitation on refunds of tax paid under a mistake of law was removed, as a result of the addition of (repealed) section 27. This section provided a six month limitation period for refunds of tax paid under a mistake of law.

On March 21, 1986, the Motor Fuel Tax Act was amended to increase the limitation period for claiming refunds from three years to six years as follows:

  • The three year limitation remained in effect for refunds of taxes paid in error before April 1, 1983, and for refunds of taxes paid under a mistake of law before April 1, 1986. Effective April 1, 1986, taxes paid under a mistake of law were not eligible for a refund; and
  • The limitation period for refunds of tax paid in error increased from three years to four years on April 1, 1987; to five years on April 1, 1988, and to six years on April 1, 1989.

The limitation period on refunds was extended to six years to be consistent with the limitation period on assessments of taxes due.

Paragraph 26(1)(a) establishes that a refund of less than $10 cannot be made. This refers to $10 in total. A claim can include more than one amount, each less than $10. If the total of all amounts is $10 or more, the total can be refunded.

Paragraph 26(1)(b), provides a refund limitation period, which requires that a claim must be made within four years of the time the amount was paid. This is also consistent with the other consumption tax statutes.

Subsection 26(2) establishes provides that despite the Limitation Act, an action for a refund must not be brought more than four years after the date on which the amount claimed was paid or remitted.

Section 27 - Mistake Of Law Refunds

MFT - SEC. 27/Int.

REPEALED

Interpretation (Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 repealed section 27 as a consequential amendment to the Act, consistent with the elimination of the mistake-of-law concept in other consumption tax statutes.

Effective June 5, 1992 (Bill 31, 1992), section 27 was added to the Act to parallel the Social Service Tax Act (repealed) provisions for refunds of tax paid under a mistake of law. Prior to this date, only tax paid under a mistake of fact was eligible for a refund.

Subsection 27(1) established that claims for refunds of taxes paid under a mistake of law were restricted to the provisions of the Act, as set out under subsection 27(2), or by an appeal to the minister or to the courts as set out under section 50 [Appeal to minister] and section 51 [appeal to court]. This protected provincial revenue by precluding common law claims for refunds of tax paid under a mistake of law.

Subection 27(2) established two limitations periods for applying for refunds of tax paid under a mistake of law:

  • Prior to May 1, 2007, a six year limitation period applied to tax paid by individuals on purchases of fuel for their personal use. Effective May 1, 2007, Bill 2, Budget Measures Implementation Act, 2007 reduced the refund limitation period from six years to four years to be consistent with the reduction in the audit assessment period. Therefore, these refunds, when received on or after May 1, 2007, were subject to a four-year limitation period; and
  • A six month limitation period applied to tax paid under a mistake of law by any business, corporation, or other organization. This was less restrictive than provisions in force before this amendment, which did not permit a refund of tax paid under a mistake of law.

Subsection 27(3) authorized the director to refund taxes paid under a mistake of law provided the taxpayer applied for the refund within the four-year or six-month limitation periods, whichever applied.

Subsection 27(4) established that the provision for refunding taxes paid under a mistake of law applied to monies paid before and after this subsection came into force. As a result, any application for recovery of tax paid under a mistake of law received on or after this subsection came into force was eligible for a refund of tax, subject to either the four-year or six-month limitation period, whichever applied.

Section 28 – Appointment Of Vendors As Collectors

MFT - SEC. 28/Int.

References:

Act: Section 1 “collector”, “director”, “fuel”, “natural gas”, “person”, “refiner collector”, “security”, “tax”, “vendor”; Section 1.1; Section 30; Section 33; Section 34.01; Section 37.1; Section 38; Section 45; Section 50

Bulletin MFT-CT 001

Interpretation (Issued: 2009/04; Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 28 by adding two new subsections. The new subsection 28(2.11) allows the director to require the applicant to provide a bond at the time of application. The new subsection 28(2.12) provides the director with authority to refuse to make the appointment if the bond is not provided by a date specified by the director.

The ability to require a bond provides the director with a greater ability to account for the risk of non-payment before appointing a collector.

Effective March 24, 2014, Bill 8, Budget Measures Implementation Act, 2014 added subsection (2.3) and subsection (2.4) to section 28 to authorized the director to make retroactive collector appointments.

Effective March 3, 2010 (retroactive from March 31, 2010), Bill 2, Budget Measures Implementation Act, 2010 added subsection 28(5).

Effective January 1, 2010, Bill 2, Budget Measures Implementation Act (No. 2), 2009 added subsection 28(2.1) and subsection 28(2.2). Bill 2 created a new category of persons under the Act: a refiner collector. On application, the director may appoint a collector as a refiner collector where the director considers the applicant suitable and the applicant, or an interrelated entity of the applicant, owns and operates a crude oil refinery in Canada. A refiner collector for a fuel type may sell that fuel type to another person who is a refiner collector for that fuel type exempt of security. The intent of the amendment is to clarify which persons may engage in these exempt sales. Bill 2 effected similar amendments to the Carbon Tax Act through the addition of subsection 16(2.1) and subsection 16(2.2) to section 16 [appointment of vendor as collector].

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 28 as a consequential amendment to the Act. Section 28 clarifies who may be appointed a collector and rules for appointment, consistent with the Carbon Tax Act.

Subsection 28(1) provides that once an application, in the specified form, is submitted, the director may, if the director considers the applicant suitable, appoint a vendor to be a collector for a type or a subcategory of a type of fuel, and make the appointment subject to conditions and limitations.

Vendor is defined under section 1 of the Act to be, subject to section 1.1 [fuel imported by ship], the first person to import fuel into, or manufacture fuel in, the province.

Subsection 28(2) provides that the director may limit the application of a collector's appointment to a subcategory of a type fuel, if the subcategory is prescribed under the Act.

Subsection 28(2.1) provides that the director may appoint a person who is a collector, on application of the collector, as a refiner collector if the director considers the collector suitable and the collector or one or more interrelated entities of the collector, individually or collectively, own and operate a crude oil refinery in Canada. The director may make the appointment subject to terms and conditions.

Subsection 28 (2.2) provides a definition for interrelated entity for the purposes of section 28. Interrelated entity means a corporation, partnership, trust, joint venture or other incorporated or unincorporated entity that the director considers to be interrelated with the collector for the purpose of this section.

Subsection 28(2.3) provides that the director may make a collector appointment or refiner collector appointment retroactive to a date that is on or after the first day of the month in which the vendor first sells a type or subcategory of a type of fuel after its manufacture or importation. If an appointment is made retroactive, the vendor is deemed to have been appointed a collector or refiner collector on the specified date.

Subsection 28(2.4) provides that an appointment may not be made on a date that is earlier than 4 years before the director makes the appointment under subsection 28(1) or 28(2.1).

Subsection 28(3) provides that a condition of appointment is that an applicant must enter into an agreement with the director that sets out the duties to be performed by the applicant when acting as a collector and any other matters the director considers necessary or advisable.

Subsection 28(4) provides that a vendor must not sell a fuel in British Columbia unless the vendor is appointed a collector for that type of fuel. A collector who sells fuel, in the province, for the first time after the manufacture in the province or importation into the province of the fuel must pay, with respect to that fuel, security to the director in an amount equal to the tax that would be collectable if the fuel were sold to a purchaser at that time (see section 38 [security from collector]). The collector reimburses itself for security paid to the province with tax collected from its customer; a collector who sells fuel to a deputy collector or retail dealer must collect the tax from the buyer (see section 34 [duties of retail dealers, deputy collectors and collectors]).

Subsection 28(5) specifies that section 28 does not apply to the sale of natural gas or hydrogen.

A collector’s appointment may be limited to “type or subcategory of a type of fuel (paragraph 28(1)(a)), and is only valid for the fuel(s) listed on the collector’s appointment certificate. The director is empowered to limit the appointment to a “subcategory of fuel” that is prescribed (subsection 28(2)). There are currently no prescribed subcategories.

Suspension or cancellation of a collector’s appointment under the Carbon Tax Act results in the same action occurring under the Act (section 37.1 [suspension or cancellation of registered consumer certificate]).

If a person applies to the director to be appointed as a collector and the person’s application is denied, the person may appeal the director’s decision to the minister under section 50 [appeal to minister].

Section 29 – Prohibition Against Relabelling – Fuel

MFT - SEC. 29/Int.

References:

Act: Section 1 “collector”, “director”, “fuel”, “person”, “tax”; Section 29; Section 50

Bulletin MFT-CT 003; Bulletin MFT-CT 005

Interpretation (Issued: 2009/04; Revised: 2015/07)

Effective May 1, 2012, Bill 21, Budget Measures Implementation Act, 2012 repealed and replaced section 29.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 29 as a consequential amendment to the Act. Subsection 29(2) clarified who may re-label fuel.

Prior to July 1, 2008, the subsection authorized the director to appoint as a “collector” a person who, because of the nature of their business, wished to purchase one type of fuel and sell some of it as another type of fuel. When making such appointments, the “director” was authorized to establish conditions for the appointment, such as collecting and remitting any additional tax due on the resale of the fuel. Such appointments were provided where the retailer had limited storage space that would not be able to accommodate separate fuel tanks, or where the majority of the retail sales were one type of fuel, with only incidental sales of another type.

Effective July 8, 1994, Bill 44, Finance and Corporate Relations Statutes Amendment Act, 1994 added section 29 which prohibited the re-labeling and reselling of fuel by any person who has not been appointed a collector.

Re-labeling fuel under the Act is taking a substance which is taxed at one rate and re-labelling it so it can be sold and taxed at a different rate (e.g., relabeling diesel as marine diesel fuel).

Subsection 29(1) provides that a person (other than a collector or person who sells fuel in a sale to which paragraphs 1.1(2)(a) to (c) [fuel imported by ship]) must not sell a substance as a type of fuel or a subcategory of a type of fuel unless the person bought the substance as that type of fuel or that subcategory of a type of fuel. For example, if a person bought a substance as locomotive fuel, they cannot sell it as motive fuel.

Subsection 29(2) provides that the director may, in writing, authorize a person (other than a collector or person who sells fuel in a sale to which paragraphs 1.1(2)(a) to (c) applies) to sell a substance as a type of fuel or a subcategory of a type of fuel when the person bought the substance as another type of fuel or another subcategory of a type of fuel.

A person who does not receive authorization from the director under section 29(2) may appeal the director’s decision to the Minister under section 50 [appeal to minister].

Section 30 – Suspension Or Cancellation Of Collector’s Appointment

MFT - SEC. 30/Int.

References:

Act: Section 1 “collector”, “director”, “person”, “tax”, “refiner collector”; Section 28; Section 50; Section 53

Interpretation (Issued 2009/04; Revised: 2015/04)

Effective January 1, 2010, Bill 2, Budget Measures Implementation Act (No. 2), 2009 added subsection 30(9) and subsection 30(10) which are correlated cancellation provisions: a suspension or cancellation of a collector's appointment under either the Motor Fuel Tax Act or the Carbon Tax Act results in the same action being taken for that collector's or refiner collector’s appointment under the other Act.

Effective January 1, 2010, Bill 2, Budget Measures Implementation Act (No. 2), 2009 amended subsection 30(1) and subsection 30(2) by adding a new subsection (b.1) to these two subsections to allow the director to cancel or suspend a refiner collector's appointment if the director is satisfied that the condition referred to in subsection 28(2.1)(a)(ii) is not being met (conditions for appointment as a refiner collector).

Effective September 2, 2009 (retroactive from October 29, 2009), Bill 2, Budget Measures Implementation Act (No. 2), 2009 amended subsection 30(1) and subsection 30(2) by adding subparagraphs empowering the director to suspend or cancel a refiner collector's appointment for not complying with the director’s requirement that the collector deposit a bond.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 30 as a consequential amendment to the Act. Section 30 amended provisions related to when a collector's appointment may be suspended or cancelled and added subsections 30(5) to 30(8). These amendments make these provisions consistent with the suspension and cancellation provisions in the Carbon Tax Act.

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 amended the previous provisions authorizing cancellation of a collector's permit to allow the immediate suspension of a permit.

Under the previous provisions, where a collector was found to be contravening the requirements of the legislation, the director's only recourse was to cancel the collector's permit. However, before cancellation, the director was required to give the collector notice of the pending cancellation and provide the collector with an opportunity to show the director why cancellation should not occur. During this notice period, the collector could continue non-compliant operations at the expense of provincial revenues.

The amendment allows the director to immediately suspend a collector's permit for a period of up to 30 days where the collector is found to be in contravention of the Act. This reduces the potential for continued non-compliance and further revenue losses. However, the collector is provided with the opportunity to show the director why the suspension should be lifted.

Effective June 5, 1992, (Bill 31, 1992), section 30 was added to permit the director to cancel a person's appointment as a collector. Prior to this amendment, the Act gave the director the authority to appoint collectors but no explicit authority to cancel an appointment for failure to collect tax or comply with other requirements of the Act.

Subsection 30(1) provides that the director may, without advance notice, suspend a collector's appointment for a period of up to 60 days for any of the following:

a) If the director is satisfied that the collector knowingly gave false information in their application;

b) If a collector refuses or neglects to comply with

i. The Act or the Regulation,

ii. A condition or limitation of their appointment,

iii. A provision of their agreement, or

iv. The director requiring the collector to deposit a bond;

c) If the suspension is authorized by the regulations

Subsection 30(1) also provides that the director may, without advance notice, suspend a refiner collector’s appointment for up to 60 days if the director is satisfied that the condition that the collector or one or more interrelated entities of the collector, individually or collectively, own and operate a crude oil refinery in Canada is not being met.

Subsection 30(1.1) provides that if the director suspends an appointment, the director must advise the person of the reason for the suspension as soon as reasonably possible and give the person an opportunity to show why the suspension should be lifted.

Subsection 30(2) provides that the director may, by notice delivered to a collector, cancel a collector's appointment for any of the following:

a) If the director is satisfied that the collector knowingly gave false information in their application;

b) If a collector refuses or neglects to comply with

i. The Act or the Regulations,

ii. A condition or limitation of their appointment,

iii. A provision of their agreement, or

iv. The director requiring the collector to deposit a bond;

c) If the suspension is authorized by the regulations

Subsection 30(2) also provides that the director may, by notice, cancel a refiner collector’s appointment if the director is satisfied that the condition that the collector or one or more interrelated entities of the collector, individually or collectively, own and operate a crude oil refinery in Canada is not being met.

Subsection 30(2.1) provides that before the director cancels an appointment under subsection 30(2), the director must give the collector notice of the reasons for the proposed cancellation and provide an opportunity for the collector to show why the appointment should not be cancelled.

Subsection 30(3) provides that the cancellation of an appointment takes effect on the later of the date that notice of the cancellation is delivered to the person, or the date stated in the notice.

Subsection 30(4) provides that a suspension or cancellation of an appointment under section 30 does not relieve a collector from any liability.

Subsection 30(5) provides that, if the regulations require an appointment to be cancelled, the director must cancel that appointment in accordance with the regulations.

Subsection 30(6) provides that if the director cancels a collector's appointment in accordance with a regulation that requires cancellation, the director is not required to provide advance notice of the cancellation but must provide written reasons to the person.

Subsection 30(7) provides that if an appointment of a person as a collector under the Carbon Tax Act is suspended under that Act, the appointment of that person as a collector under the Motor Fuel Tax Act is automatically suspended without notice for the same period as the suspension under the Carbon Tax Act if both appointments are in relation to the same substance.

Subsection 30(8) provides that if an appointment of a person as a collector under the Carbon Tax Act is cancelled under that Act, the appointment of that person as a collector under the Motor Fuel Tax Act is automatically cancelled without notice if both appointments are in relation to the same substance.

Subsection 30(9) provides that if the appointment of a person as a collector under the Motor Fuel Tax Act or the Carbon Tax Act is suspended under either Act, the appointment of that person as a refiner collector under the Motor Fuel Tax Act is automatically suspended without notice for the same period as the suspension under the Motor Fuel Tax Act or the Carbon Tax Act.

Subsection 30(10) provides that if the appointment of a person as a collector under the Motor Fuel Tax Act or the Carbon Tax Act is cancelled under either Act, the appointment of that person as refiner collector under the Motor Fuel Tax Act is automatically cancelled without notice.

A person whose appointment as a collector or refiner collector is cancelled by the director under subsection 30(2) may appeal the director’s decision to the Minister under section 50 [appeal to minister].

Section 31 – Exemption For Locomotive Fuel

MFT - SEC. 31/Int.

REPEALED

References:

Act: Section 1 “collector”, “security”, “tax”

Interpretation (Issued 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 repealed section 31 as a consequential amendment to the Act. This section is repealed as other amendments to the Motor Fuel Tax Act clarify who may be appointed a collector (see section 28 [appointment of vendors as collectors]) and the obligations to collect tax or pay security (see section 34 [duties of retail dealers, deputy collectors and collectors]) which make this provision redundant.

Section 32 – Exemption Of Collector And Appointment

MFT - SEC. 32/Int.

REPEALED

References:

Act: Section 1 “collector”, “security”, “tax”

Interpretation (Issued 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 repealed section 32 as a consequential amendment to the Act. This section is repealed as other amendments to the Act clarify who may be appointed a collector (see section 28 [appointment of vendors as collectors]) and the obligations to collect tax or pay security (see section 34 [duties of retail dealers, deputy collectors and collectors]) which make this provision redundant.

Section 33 – Deputy Collectors

MFT - SEC. 33/Int.

References:

Act: Section 1 “collector”, “deputy collector”, “fuel”, “person”, “registered consumer”, “security”, “tax”, “vendor”, “wholesale dealer”; Section 20.11; Section 21; Section 28; Section 34; Section 39; Section 40; Section 50;

MFTR: Section 3.1; Section 51.8

Bulletin MFT-CT 001

Interpretation (Issued: 2009/04; Revised: 2015/07)

Effective March 24, 2014, Bill 8 - Budget Measures Implementation Act, 2014 added subsection 33(4) and subsection 33(5) to section 33.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 33 as a consequential amendment to the Act. This section clarifies who is a deputy collector and the obligations of a deputy collector and is consistent with the Carbon Tax Act.

Subsection 33(1) provides that if a wholesale dealer buys fuel from a collector or another deputy collector, the wholesale dealer is deemed to have been appointed a deputy collector. As a deputy collector, the wholesaler must pay security on the fuel it buys and may retain the security that must be paid to them other deputy collectors and retail dealers up to the amount of the security paid on the fuel.

Subsection 33(2) wholesalers are not deemed to have been appointed deputy collectors if they are appointed collectors and buy fuel from another collector if both collectors own and operate refineries in Canada. This is an exemption to the general rule that wholesalers must pay security on the fuel they buy and confirms in legislation a previous administrative practice.

Subsection 33(3) clarifies that a wholesaler who is a deputy collector must comply with the obligations of a deputy collector to pay security on their purchases, even if they are also a collector or a registered consumer with respect to other fuel.

Subsection 33(4) provides for the retroactive appointment of a deputy collector if they buy fuel from a vendor whose collector appointment is retroactive under subsection 28(2.3) [appointment of vendors as collectors].

Subsection 33(5) provides that a deputy collector appointment is deemed to have been made at the time the wholesale dealer bought the fuel.

A deputy collect must pay security to collectors or other deputy collectors when they purchase fuel in BC from them for resale (section 39 [security from deputy collector]). They may retain the security that must be paid to them by other deputy collectors and retail dealers up to the amount of the security they paid on the fuel.

A deputy collector may apply to the director for an exemption from the security requirement regarding fuel sold to a person who is: not a purchaser; not liable to pay tax; or, a registered marine service or registered air service, for the type of fuel sold (section 39). A deputy collector may obtain a refund of security paid regarding sales of fuel to these purchasers (section 20.11 [refund of security]).

If an application for exemption from the requirement to pay security is refused, the deputy collector may appeal to the minister (section 50 [appeal to minister]).

A deputy collector who is not paid by its customer may apply for a refund of tax or security paid (section 21 [refund of deduction for bad debts]; MFTR section 3.1).

A deputy collector must not collect security on the sale of specified fuel to an exempt fuel retailer (section 40 [security from retail dealer]; MFTR section 51.8).

Section 34 – Duties Of Retail Dealers, Deputy Collectors And Collectors

MFT - SEC. 34/Int.-R.1

References:

Act: Section 1 “collector”, “deputy collector”, “fuel”, “person”, “purchaser”, “registered consumer”, “retail dealer”, “security”, “tax”; Section 4; Section 5; Section 6; Section 7; Section 8; Section 9; Section 10; Section 10.1; Section 34.01; Section 38; Section 39; Section 40

MFTR: Section 2.04

Bulletin MFT-CT 001

Interpretation (Issued: 2011/11; Revised: 2015/07; 2017/09)

Effective August 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 34(7) to provide that tax must be remitted to the government and not to the minister.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 34 as a consequential amendment to the Act. Section 34 clarifies the obligations of a retail dealer, deputy collector, and a collector to collect and remit tax. This section is consistent with section 26 of the Carbon Tax Act.

Section 34, along with section 4 [tax on gasoline], section 5 [tax on coloured fuel], section 6 [tax on marine diesel fuel and locomotive fuel], section 7 [tax on jet fuel], section 8 [tax on aviation fuel], section 9 [tax on natural gas], section 10 [tax on motive fuel], section 10.1 [tax on alternative motor fuel], section 38 [security from collector], section 39 [security from deputy collector] and section 40 [security from retail dealer], work in concert to impose the tax and security scheme under the Act. Specifically, section 34 imposes the security scheme for collectors, deputy collectors and retail dealers and ensures tax is remitted to government if there are any breaks in the security scheme.

Section 34 is subject to more specific statutory sections that pertain to each class of persons (i.e., collectors – section 38; deputy collectors – section 39; retail dealers – section 40).

Generally, tax is only imposed on the purchaser and the government demands security for the tax to be paid by the collector (the person who produced the fuel or imported the fuel into the province).

The amount of security the government demands from a collector is equal to the amount of tax that would be levied on a purchaser, had a purchaser bought the fuel produced or imported by the collector. In each sale in the distribution chain, the buyer is required to pay security to the fuel seller, until the retail dealer finally collects tax from the purchaser. Notionally, this tax is to be remitted up the chain to the government. However, if this occurred, the government would be paid twice: once in security and once in tax. To avoid this result, each level in the distribution chain satisfies its obligation to pass the tax up by paying security up. In result, the collector pays security to the government, a deputy collector pays security to the collector or another other deputy collector, who keeps it, the retail dealer pays security to the collector or deputy collector, who keeps it, and the retail dealer collects tax from the purchaser, and the retail dealer keeps the tax it collects, thus reimbursing itself for the security it paid.

This scheme was chosen: (1) to protect revenue – the government gets paid first; (2) for administrative efficiency – the government deals with a small number of collectors at the top of the distribution chain rather than a large number of retail dealers at the bottom; and (3) to effect a “direct tax” rather than an “indirect tax” on the purchaser.

Example:

First, a collector imports gasoline. The collector has to pay security to the province equal to the tax that would be collectable if the fuel were sold to a purchaser at that time (subsection 38(1)).

Second, the collector sells the gasoline to a deputy collector. The deputy collector has to pay security to the collector equal to the amount of tax that would be collectable if the fuel were sold to a purchaser at that time (subsection 39(1)).

Third, the deputy collector sells the gasoline to a retail dealer. The retail dealer has to pay security to the deputy collector equal to the amount of tax that would be collectable if the fuel were sold to a purchaser at that time (subsection 40(1)).

Fourth, the retail dealer sells the gasoline to a purchaser. The purchaser is required to pay tax at the time of sale (section 4) and the retail dealer is required to collect the tax at the time of sale (section 34).

R.1 Overview of Act (Issued: 2016/01)

The following provides a legislative overview of the collection and remittance scheme and security scheme. For a description of the security scheme see MFTA/Sec. 34/Int.

Collection and Remittance Scheme (default scheme of the Act subject to security scheme)

A. Subsection 34(1) imposes an obligation on retail dealer to collect tax from the purchaser.

B. Subsection 34(4) imposes an obligation on collectors and deputy collectors who sell fuel to other deputy collectors and retail dealers to collect tax.

C. Subsection 34(5) imposes an obligation on a deputy collector who buys fuel from a collector or other deputy collector to remit tax (on demand) to the collector or other deputy collector.

D. Subsection 34(6) imposes an obligation on a retail dealer who buys fuel from a collector or deputy collector to remit tax (on demand) to collector or deputy collector.

E. Subsection 34(7) imposes an obligation on a deputy collector or retail dealer to remit tax to government if tax not remitted to the person from whom they purchased the fuel.

F. Subsection 35(1) imposes an obligation on the collector to remit all taxes collected to government.

Security Scheme

G. Subsection 38(1) imposes an obligation on a collector to pay security to government.

H. For the purposes of subsection 38(1), a sale from one refiner collector to another refiner collector is not the first sale of fuel in BC (subsection 38(1)). Therefore only the refiner collector that makes the first sale a person who is not another refiner collector is the collector.

I. Subsection 38(7) relieves the collector of the obligation to collect and remit the tax if security paid to government (and retained).

J. Subsections 39(3) and 40(3) allows collector who has paid security under subsection 30(1) to retain any security received from a deputy collector or retail dealer to whom they sold fuel instead of collecting tax.

K. Subsection 39(1) imposes an obligation on a deputy collector who buys fuel from a collector or other deputy collector to pay security to the collector or other deputy collector.

L. Subsection 39(4) relieves the deputy collector of the obligation to remit tax (both to the seller of the fuel and to government) if the deputy collector has paid security.

M. Subsections 39(3) and 40(3) allows a deputy who has paid security on fuel that they have purchased to retain any security received from another deputy or retail dealer instead of collecting tax (relieves the deputy collector from obligation to collect tax).

Note: Unlike collectors, the relief for a deputy collector from obligation to collect and remit results from two separate transactions - 1) payment of security (to person from whom the deputy collector bought fuel) relieves the remittance obligation, and 2) receiving and retaining security (from person who bought fuel from them) relieves them of their collection obligation.

N. Subsection 40(1) imposes the obligation on retail dealer who buys fuel from collector or deputy collector to pay security to the collector or deputy collector.

O. Subsection 40(4) relieves the retail dealer of the obligation to remit tax (both to the seller of the fuel and to government) if the retail dealer has paid security.

Note: Unlike collectors and deputy collectors, retail dealers are only provided relief from the obligation to remit tax when the retail dealer pays security. There is no relief from the retail dealer's obligation to collect tax.

Section 34.01 – Relief Of Obligations To Extent Tax Remitted

MFT - SEC. 34.01/Int.-R.1

References:

Act: Section 1 “collector”, “deputy collector”, “fuel”, “retail dealer”, “security,” “vendor”; Section 28; Section 33; Section 34; Section 39; Section 40; Section 45

Interpretation (Issued: 2014/08; Revised: 2015/04)

Effective March 24, 2014, Bill 8, Budget Measures Implementation Act, 2014 added section 34.01.

Section 34.01 relieves a collector, deputy collector and a retail dealer of certain collection, remittance, and security obligations in specific circumstances if the appointment of a vendor is retroactive and the collector sold the fuel within the period beginning on the date the appointment was effective and ending on the date the appointment was made by the director.

R.1 Collectors and Relief of Obligations (Issued: 2016/01)

Under paragraph 34.01(e) of the Act, if a vendor's appointment is retroactive and the collector sold the fuel within the period beginning on the date the appointment was effective and ending on the date the appointment was made by the director, the collector is relieved of any obligation under subsection 38(1) to pay security with respect to that fuel, to the extent that the tax on that fuel has been remitted to the government.

For example, if a vendor's collector's appointment for gasoline was made retroactive to July 1, 2014 on December 1, 2014 by the director, the collector is relieved from their obligation to pay security on any gasoline sold for the first time after manufacture in, or import into, BC during the period of July 1, 2014 to December 1, 2014 if the tax on that gasoline had been remitted to the government. As a result the collector can't be assessed for failure to pay security on this fuel.

The relief under paragraph 34.01(e) is not provided with respect to sales of fuel beyond the date that the director makes the appointment, nor does it apply with respect to sales of fuel sold within the period beginning on the date the appointment was effective and ending on the date the appointment was made by the director, if no tax has been remitted to the government on the fuel. In these circumstances, the director must determine if the collector has paid security on the fuel as required.

Section 34.1 – Agent Of Government

MFT - SEC. 34.1/Int.

References:

Act: Section 1 “fuel”, “person”, “tax”

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added section 34.1 as a consequential amendment to the Act. This section makes a person who sells fuel an agent of government who must levy and collect the tax imposed. This section is consistent with section 27 of the Carbon Tax Act.

Section 35 – Remittance Of Tax

MFT - SEC.35/Int.

References:

Act: Section 1 “collector”, “deputy collector”, “fuel”, “purchaser”, “retail dealer”, “tax”; Section 21; Section 35; Section 38

Interpretation (Revised: 2015/04)

Effective March 23, 1994, Bill 19, Taxation Statutes Amendment Act, 1994 added subsection 35(2). This amendment was consequential to the proportional refund for bad debts established in section 21 [refund or deduction for bad debts] by the same bill.

Subsection 35(1) provides that subject to section 38 [security from collector], a collector must remit to the government all taxes collected by the collector under this Act at the prescribed time and in the prescribed manner.

Subsection 35(2) deems any money received (by a collector, deputy collector or retail dealer) for a sale of fuel, up to the full amount of tax owing, to be payment of tax owing by the purchaser. In other words, tax is deemed to be paid first.

Section 35.1 – Collections

MFT - SEC.35.1/Int.

References:

Act: Section 1 “collector”, “deputy collector”, “fuel”, “person”, “purchaser”, “retail dealer”, “security”, “tax”; Section 35.1; Section 38; Section 39; Section 40

Interpretation (Issued: 2000/07; Revised: 2017/09)

Effective August 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 35.1(1) to provide that a person who collects an amount as if it were a tax imposed under the Act must remit that amount at the time and in a manner prescribed by regulations. Subsection 35.1(1.1) is also amended to provide that a person who is not a collector or deputy collector and receives money in respect of tax payable on the sale of fuel to a retail dealer must remit that money at the time and in a manner prescribed by regulations.

Subsection 35.1(1.2) is removed and replaced with new language to clarify that a person who sells fuel and receives security or an amount as if it were security that exceeds the amount of security they paid, must remit the excess amount to government at the time and in a manner prescribed by regulations.

A new section 35.1(1.3) is added to provide that collectors and deputy collectors who remit additional amounts in accordance with section 35.1(1.2) are relieved of their obligation to collect and remit the tax imposed by the Act on a purchaser of fuel.

Section 35.1(2) is amended to clarify that a person who collects an amount of tax or an amount as if it were tax under the Act is deemed to hold the amount in trust for the government until the amount is remitted to government.

Effective May 1, 2012, Bill 21, Budget Measures Implementation Act, 2012 added subsection 35.1(1.2).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 35.1 as a consequential amendment to the Act. Section 35.1 was amended to clarify the obligation to remit tax and the status of collected taxes. Subsection 35.1(1.1) was added, subsection 35.1(2) was amended and subsection 35.1(3) was repealed. These provisions are consistent with provisions in the Carbon Tax Act.

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 added a new provision to establish that tax collected in error on a sale that is not subject to tax must be remitted to the province in the same manner as tax that is imposed under the Act. This amendment is necessary, because, under the Act, a purchaser that has paid tax in error is eligible to apply for a refund of that amount. This amendment ensures that a seller is required to remit the money collected as tax (the tax paid by the purchaser in error) to the government.

Section 36 – Allowance For Collectors

MFT - SEC.36/Int.

References:

Act: Section 1 “collector”, “tax”; Section 36

MFTR: Section 3

Interpretation (Issued: 2015/04; Revised 2021/02)

Effective February 20, 2015, Bill 5, Budget Measures Implementation Act, 2019 repealed and replaced section 36 to provide legislative authority for a collector to deduct and retain a prescribed allowance from a payment of security. Section 36 was brought into force retroactively, effective February 20, 2015. This amendment clarified previous administrative practices.

Since its inception on December 31, 1985 (Bill 63 – Motor Fuel Tax Act, 1985), the Act has provided for an allowance for collecting tax.

Subsection 36(1) provides that subject to the regulations a collector may deduct and retain a prescribed allowance for a given reporting period from the security amount payable for that period.

Subsection 36(2) provides that despite any other Act, by retaining the allowance under this section the person does not become ineligible as a member of the Legislative Assembly of British Columbia. Subsection 36(2) is added for consistency with allowance provisions in the Provincial Sales Tax Act and Tobacco Tax Act.

Section 37 – Issue Of Registered Consumer Certificate

MFT - SEC.37/Int.

References:

Act: Section 1 “collector”, “fuel”, “ registered consumer”, “registered consumer certificate”, “tax”; Section 5.1; Section 37.1; Section 50

MFTR: Section 1 “interjurisdictional air service”; Section 1.1

Bulletin MFT-CT 004

Interpretation (Issued: 2009/04; Revised 2016/01)

Effective July 1, 2015, Bill 10, Budget Measures Implementation Act, 2015 amended subsection 37(4) by adding a reference to section 5.1 [tax on coloured fuel if declaration not obtained]. This amendment is consequential to the addition of section 5.1 and ensures that the declaration requirement in section 5.1 does not apply to a registered consumer.

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 added two new subsections. The new subsection 37(3.1) allows the director to require an applicant for a registered consumer certificate to provide a bond at the time of application. Under subsection 37(3.2), the director may refuse to issue the certificate if the bond is not provided.

The ability to require a bond allows the director to better account for the risk of non-payment of an amount to government before issuing a certificate.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 37 as a consequential amendment to the Act. This section clarifies who may be issued a registered consumer certificate and the rules for the issuance of a certificate. This section is consistent with the Carbon Tax Act.

A registered consumer does not pay tax at the time of purchase. Instead, a registered consumer self-assesses tax on fuel.

A registered consumer is typically a consumer who buys fuel in the province but makes exempt use of that fuel. The benefit of being appointed a registered consumer is not paying the tax up front; accordingly, the registered consumer enjoys the use of its funds, rather than being out of pocket while waiting for a refund.

Only an interjurisidictional air service or an interjurisdictional rail service can be appointed as a registered consumer (see MFTR section 1.1 [registered consumer certificate]) under the Act.

Subsection 37(1) provides that once an application, in the specified form, is submitted, the director may, if the director considers the applicant suitable, issue a registered consumer certificate to an applicant who is included in a prescribed category of persons and meets the requirements to be a registered consumer set out in the regulations. The director may make the certificate subject to conditions and limitations.

Subsection 37(2) provides that the director may limit the application of a registered consumer certificate to a subcategory of a type of fuel, if that fuel is prescribed under the Act. Currently, no subcategories of a type of fuel are prescribed.

Subsection 37(3) provides that a condition of a certificate is that an applicant must enter into an agreement with the director setting out the duties to be performed and any other matters the director considers necessary or advisable.

Subsection 37(4) provides that various charging provisions under the Act do not apply to a purchaser who is a registered consumer with respect to the type or subcategory of a type of fuel specified on that person's consumer certificate. Registered consumers can purchase specific types of fuel specified on their certificate without paying tax at the time of purchase.

Unsuccessful applicants for a registered consumer certificate may appeal the decision of the director to the Minister (section 50 [appeal to minister]).

Section 37.1 – Suspension Or Cancellation Of Registered Consumer Certificate

MFT - SEC.37.1/Int.

References:

Act: Section 1 “person”; Section 1.1; Section 37; Section 50; Section 53

Interpretation (Issued: 2009/04; Revised: 2011/03, 2015/04)

Effective September 2, 2009 (retroactive from October 29, 2009), Bill 2, Budget Measures Implementation Act (No. 2), 2009 amended paragraphs 37.1(1)(b) and (3)(b) by adding a new subparagraph, which empowers the director to suspend or cancel a section 1.1 certificate for the registered consumer’s failure to meet the director's requirement to deposit a bond under section 53 [collection bond].

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added section 37.1 as a consequential amendment to the Act. This section was added to provide for how and in what circumstances a registered consumer certificate may be suspended or cancelled. The provision is consistent with the provisions for the suspension or cancellation of collectors' appointments under the Act and provisions in the Carbon Tax Act.

Subsection 37.1(1) establishes that the director may, without advance notice, suspend a registered consumer certificate for a period of up to 60 days if the person:

  • knowingly gave false information on their application;
  • does not comply with the Act or regulations;
  • does not comply with a condition or a limitation specified by the director under subsection 37(1) [issue of registered consumer certificate];
  • does not comply with a provision of their agreement under subsection 37(3), or;
  • does not comply with a requirement of the director to deposit a bond under section 53.

Subsection 37.1(2) provides that if a registered consumer certificate is suspended, the director must provide reasons and provide an opportunity for the person to show why the suspension should be lifted.

Subsection 37.1(3) provides that the director may, by notice delivered to a registered consumer, cancel a registered consumer's certificate if the registered consumer:

  • knowingly gave false information on their application;
  • does not comply with the Act or the regulations;
  • does not comply with a condition or a limitation specified by the director under subsection 37(1);
  • does not comply with a condition of their agreement under subsection 37(3), or;
  • does not comply with a requirement of the director to deposit a bond under section 53.

Subsection 37.1(4) provides that before a certificate is cancelled, the director must give reasons for the proposed cancellation, and provide an opportunity for the person to show why their registered consumer's certificate should not be cancelled.

Subsection 37.1(5) provides that the cancellation of a certificate takes effect on the later of the date that notice of it is delivered to the person, or the date stated in the notice.

Subsection 37.1(6) provides that if the regulations require a registered consumer certificate to be cancelled, the director must cancel that registered consumer certificate.

Subsection 37.1(7) provides that if the director cancels a person's registered consumer certificate under subsection 37.1(6), the director is not required to provide advance notice of the cancellation but must provide written reasons to the person.

Subsection 37.1(8) provides that if a registered consumer certificate issued to a person under the Carbon Tax Act is suspended under that Act, the registered consumer certificate issued to that person under this Act is automatically suspended without notice for the same period as the suspension under the Carbon Tax Act if both certificates are in relation to the same substance. Subsection 37.1(8) is analogous to subsection 24(5) [automatic suspension and cancellation) of the Carbon Tax Act.

Subsection 37.1(9) provides that if a registered consumer certificate issued to a person under the Carbon Tax Act is cancelled under that Act, the registered consumer certificate issued to that person under this Act is automatically cancelled without notice if both certificates are in relation to the same substance. Subsection 37.1(9) is analogous to subsection 24(6) of the Carbon Tax Act.

Section 37.1(10) provides that a suspension or cancellation of a registered consumer certificate under section 37.1 does not relieve the registered consumer from any liability.

The director’s decision to cancel a registered consumer’s certificate can be appealed to the Minister (section 50 [appeal to minister]).

Section 38 – Security From Collector

MFT - SEC.38/Int.

References:

Act: Section 1 “collector”, “fuel”, “purchaser”, “refiner collector”, “retail dealer”, “security”, “tax”; Section 1.1; Section 28; Section 33; Section 34; Section 34.01; Section 35; Section 35.1; Section 39; Section 40; Section 50

MFTR: Section 2

Bulletin MFT-CT 001

Interpretation (Issued: 2011/03, Revised: 2017/05)

Effective August 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 38(1) to provide clarification on the amount of security that a collector is required to pay to the government when fuel is first sold in British Columbia. The provision is explicit concerning the amount of security payable by a collector on a sale of fuel and is based on:

  • the location (within or outside a transit zone) where the sale takes place;
  • a sale to a purchaser who is liable to pay tax and not a purchaser who is exempt from tax; and
  • in the case of coloured fuel, that rate of tax under subsection 5(1) of the Act.

Effective March 1, 2016, Bill 10, Budget Measures Implementation Act, 2016, added subsection 38(5.1) to provide an exemption for collectors from the requirement to pay security in respect of fuel that is sold to a deputy collector or retail dealer who is exempt from the requirement to pay security in respect of that fuel.

Effective May 1, 2012, Bill 21, Budget Measures Implementation Act, 2012 added subsection 38(1.1) and subsection 38(3). The amendments were made to accommodate the addition of section 1.1 [fuel imported by ship].

Effective January 1, 2010, Bill 2, Budget Measures Implementation Act (No. 2), 2009 repealed and replaced subsection 38(3) with a new subsection to effect the same purpose (i.e., to allow security exempt sales between certain collectors), but in a more effective way. Before implementation of the Carbon Tax Act on July 1, 2008, there was an administrative practice for motor fuel tax to allow businesses that owned and operated refineries to sell fuel to each other without having to pay security to the government. On enactment of the Carbon Tax Act, an initial attempt was made to base this administrative practice in the legislation in both the Carbon Tax Act and the Motor Fuel Tax Act. The initial amendment did not fully capture the intent.

In October 2009, section 1 [definitions], subsection 28(2.1) [appointment of vendors as collectors] and subsection 28(2.2) were amended to add a new subclass of collector, the refiner collector, and subsection 38(3) was amended to refer to a refiner collector rather than a collector. Under the new subsection, one refiner collector for fuel X may sell fuel X to another refiner collector for fuel X without paying security; the Act accomplishes this by deeming this sale not to be a "sale of fuel within British Columbia for the first time after the fuel is manufactured or imported into British Columbia."

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 38 as a consequential amendment to the Act. Section 38 was amended to clarify when a collector is required to pay security and provided legislative authority for the long-standing administrative practice of allowing certain collector-to-collector transactions to not be subject to the requirement to pay security to the government. The provision is consistent with the Carbon Tax Act.

Effective June 30, 1995, Bill 33, Finance and Corporate Relations Statutes Amendment Act, 1995, established statutory authority for the existing tax collection scheme by establishing the security scheme in legislation.

Section 39 – Security From Deputy Collector

MFT - SEC.39/Int.-R.2

References:

Act: Section 1 “collector“, “deputy collector”, “fuel”, “security”, “tax”; Section 20.11; Section 34; Section 35.1; Section 38; Section 40; Section 40.1; Section 50

Bulletin MFT-CT 001

Interpretation (Revised: 2017/05)

Effective August 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 39(1) to provide clarification on the amount of security that a deputy collector is required to pay to the collector. The provision is explicit concerning the amount of security payable by a deputy collector on the purchase of fuel and is based on:

  • the location (within or outside a transit zone) where the sale takes place;
  • a sale to a purchaser who is liable to pay tax and not a purchaser who is exempt from tax; and
  • in the case of coloured fuel, that rate of tax under subsection 5(1) of the Act.

Subsection 39(3) is amended by adding a reference to subsection 35.1(2) [collections]. This change ensures that a collector or deputy collector who has paid security on fuel can only retain any security they receive under subsection 39(1) if they have complied with the amended subsection 35.1(1.2), which requires a collector or deputy collector to remit any amounts they receive that exceed the security they paid, to government.

Subsection 39(4) is amended to make reference to subsections 34(5) and (7) [duties of retail dealers, deputy collectors and collectors] of the Act. This change will ensure that a deputy collector is only authorized to retain an amount they receive as security if it does not exceed the amount of security they paid. As a retail dealer is only relieved of their obligation to remit tax under subsections 34(5) and (7) of the Act to the extent of the amount of security they have paid, they are now required to remit security received over and above the security paid - such as security collected on fuel purchased outside a transit zone, but sold within a transit zone - to government.

Effective March 1, 2016, Bill 10, Budget Measures Implementation Act, 2016 added subsection 39(0.1) to provide a definition for "common carrier" for the purposes of the new exemption under subsection (1.1).

Subsection 39(1.1) was added to provide that a deputy collector who buys fuel that is to be sold by the deputy collector outside of British Columbia is exempt from the requirement to pay security in respect of the fuel if that fuel is to be removed from British Columbia in the circumstances described in the subsection.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008, amended section 39 as a consequential amendment to the Act. Subsections 39(5)-(9) were repealed and section 39 was amended to clarify when a deputy collector is required to pay security. This provision is consistent with the Carbon Tax Act.

Effective June 30, 1995, Bill 33, Finance and Corporate Relations Statutes Amendment Act, 1995 established statutory authority for the existing tax collection scheme by establishing the security scheme in legislation.

R.1 Alternatives to a Common Carrier Contract (Issued: 2016/06; Revised: 2017/09; Revised: 2021/08)

Paragraph 39(1.1)(c) of the Act allows fuel sellers to sell fuel security exempt to a deputy collector if a contract is in place at the time of the sale for the fuel to be removed from the province by a common carrier working for the deputy collector.

In some situations, the deputy collector and/or common carrier are reluctant to provide a copy of the contract to the fuel seller for reasons of business confidentiality, etc. If this occurs, the fuel seller has three options:

1. the fuel seller charges security and the deputy collector applies for a refund;

2. the fuel seller may request a copy of the contract with the contracted rates and total value deleted; or

3. the fuel seller may accept as an alternative to a copy of the contract, a letter signed by both the deputy collector and the common carrier providing specific information regarding the contract. If the fuel seller elects to follow this process, it should ensure the letter contains the following information:

a) a statement regarding the existence of a contract between the deputy collector and the common carrier who is working for the deputy collector;

b) a statement listing the types of fuel purchased that will be exported from BC;

c) a statement regarding the term (including both the start and end date) of the contract. (If the contract term is longer than 24 months, an updated letter must be provided to the fuel seller prior to the end of the 24 month period);

d) a statement that both the deputy collector and common carrier recognize that any statements/representations in the letter are subject to further verification by the Ministry of Finance, and if the deputy collector is found to be not eligible to purchase the fuel exempt from security, either the fuel seller or the deputy collector may be assessed the security that should have been paid and may also be subject to penalties and/or interest;

e) a statement from the deputy collector that the deputy collector:

I. Is purchasing, using this letter, fuel for resale in another jurisdiction;

II. Will, for audit purposes, retain sufficient records to show that the fuel was exported from British Columbia and was received in another jurisdiction. (The types of acceptable records include, but are not limited to, the following: a copy of the fuel supply contract(s) with common carrier(s) who exported the fuel from British Columbia, copies of the related bills of lading and freight invoices for the fuel sales showing the location of pickup and location of delivery in the receiving jurisdiction and the signature of the individual accepting delivery of the fuel, copies of information reporting the import of the fuel into the receiving jurisdiction); and

III. Will notify the seller immediately if the contracted delivery locations change (i.e., deliveries made under this letter are being made to other locations outside the province or to locations in BC) or if the contract is amended or cancelled.

Below, is a draft letter with the above information which can be used as a template:

Common Carrier Letter for [SELLER] (“Seller”)

This letter certifies that a contract exists between BUYER LEGAL NAME (“Buyer”) and COMMON CARRIER LEGAL NAME (“Common Carrier”)  for the carriage and removal of [enter fuel product type] (i.e. export) from BC (the Contract).

Buyer confirms that it will notify both Seller and Common Carrier immediately if the delivery locations made under the Contract are requested to be changed to locations in BC. Buyer confirms it will notify Seller if the Contract is amended or cancelled. 

Common Carrier and Buyer recognize that any statements or representations contained in this letter are subject to further verification by the Ministry of Finance. If Buyer is found not eligible to purchase fuel exempt from carbon tax, Buyer will be assessed the tax that should have been paid and may also be subject to penalties, interest, or both.

The Contract was entered into with an effective date of Month/Day/Year and is renewed on an [enter renewal term here (for example, annual)] basis through purchase orders and requisitions for services.

Carrier Legal Name

 


Authorized Rep Name
Date:

Buyer Legal Name

 


Authorized Rep Name
​Date:

Addendum to Common Carrier Contract Letter

Buyer further certifies:

  • Purchased fuel is for its own use or resale in another jurisdiction, or both.
  • Fuel purchased in BC for own use in another jurisdiction is subject to motor fuel tax.
  • 100% of the volumes purchased using this common carrier letter will be exported from BC.
  • It will, for audit purposes, retain sufficient records to show that the fuel was exported from BC and was received in another jurisdiction. The types of acceptable records include, but are not limited to, the following:
    • a copy of the fuel supply contract(s) with common carrier(s) who exported the fuel from BC.
    • copies of the related bills of lading and freight invoices for the fuel sales showing the location of pickup and location of delivery in the receiving jurisdiction and the signature of the individual accepting delivery of the fuel.
    • copies of information reporting the import of the fuel into the receiving jurisdiction.
  • If the term of the contract exceeds 24 months, Buyer agrees to provide an updated letter to Seller within one month prior to the expiry of the 24 month period.

Legal Name of Buyer

 


Authorized Rep Name
Date:

 

Additional Notes for the “Seller”

  • If the fuel seller has been appointed a collector, the seller should report this exempt sale on their Carbon Tax Return - Collector (FIN 175), using:
    • Line 1 - Total Volume of Fuel sold in BC; and
    • Line 3d - Fuel Sold Within BC and Exported.
  • If the fuel seller is not a collector, they can apply for a refund using Application for Refund of Carbon Tax Deputy Collector or Retail Dealer (FIN 143).
  • If a person seeks to purchase fuel from a fuel seller exempt from tax and the circumstances are such that a reasonable person would believe that the person is not entitled to purchase the fuel exempt from tax, the fuel seller should charge tax and promptly advise the director of the Carbon Tax Act and provide such details as the director requires.

R.2 Pipeline Operators as Common Carriers (Issued: 2016/06)

Paragraph 39(1.1)(c) of the Act provides an exemption from motor fuel tax for fuel that is purchased in BC for sale outside of BC and which is to be removed from BC by the deputy collector, or the person acting on behalf of the deputy collector, if that person has, at the time of the purchase, entered into a contract with a common carrier for the removal of the fuel from BC.

A "common carrier" is defined in subsection 39(0.1) of the Act as a person who is in the business of transporting goods for members of the public. Pipeline operators can be common carriers for the purposes of section 39 of the Act.

Section 40 – Security From Retail Dealer

MFT - SEC.40/Int.

References:

Act: Section 1 “collector”, “deputy collector”, “fuel”, “purchaser”, “retail dealer”, “security”, “tax”; Section 20.11; Section 35.1; Section 40.1

Bulletin MFT-CT 001

Interpretation (Revised: 2017/05)

Effective August 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 40(1) to provide clarification on the amount of security that a retail dealer is required to pay. The provision is explicit concerning the amount of security payable by a deputy collector on the purchase of fuel and is based on:

  • the location (within or outside a transit zone) where the sale takes place;
  • a sale to a purchaser who is liable to pay tax and not a purchaser who is exempt from tax; and
  • in the case of coloured fuel, that rate of tax under subsection 5(1) of the Act.

Subsection 40(3) is amended by adding a reference to subsection 35.1(1.2) [collections]. This change ensures that a collector or deputy collector who has paid security on fuel can only retain any security they receive under subsection 40(1) if they have complied with the amended subsection 35.1(1.2), which requires a collector or deputy collector to remit any amounts they receive that exceed the security they paid, to government.

Section 40(4) is amended to make reference to sections 34(6) and (7) [duties of retail dealers, deputy collectors and collectors] of the Act. This change ensures that a retail dealer is only authorized to retain an amount they receive as security if it does not exceed the amount of security they paid. As a retail dealer is only relieved of their obligation to remit tax under subsections 34(6) and (7) of the Act, to the extent of the amount of security they have paid, they are now required to remit security received over and above the security paid - such as security collected on fuel purchased outside a transit zone, but sold within a transit zone - to government.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 40 as a consequential amendment to the Act. Subsections 40(4) to (7) were repealed and section 40 was amended to clarify when a retail dealer is required to pay security.

Effective June 30, 1995, Bill 33, Finance and Corporate Relations Statutes Amendment Act, 1995 established statutory authority for the existing tax collection scheme by establishing a security scheme in legislation.

Section 40.1 – Change In Tax Rate And Payment Of Security

MFT - SEC.40.1/Int.

References:

Act: Section 1 “collector”, “deputy collector”, “fuel”, “person”, “purchaser”, “retail dealer”, “security”, “tax”; Section 39; Section 40

Interpretation (Revised: 2017/05)

Effective August 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 40.1(4) to provide that additional security payable by a deputy collector or retail dealer as a result of a tax rate increase must be paid to the government and not to the minister.

Subsection 40.1(5) and (8) are amended to clarify the additional security a retail dealer or deputy collector must pay in the event of a tax rate increase, or the refund a retail dealer or deputy collector are entitled to in the event of a tax rate decrease. Specifically, the new amendments clarify that the payment or refund of security is now based on:

  • the location (within or outside a transit zone) where the sales takes place,
  • a sale to a purchaser who is liable to pay tax and not a purchaser who is exempt from tax, and
  • in the case of coloured fuel, 3 cents per litre and not the higher clear fuel tax rates that apply if a purchaser fails to provide a declaration when required under section 5.1 of the Act

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008, added section 40.1 as a consequential amendment to the Act. This section is largely based on repealed subsection 39(5). The revisions clarify when a deputy collector and a retail dealer must provide an inventory of their fuel and pay additional security when tax rates increase or receive a refund of excess security paid when tax rates decease. These provisions are consistent with the Carbon Tax Act.

Section 41 – Inspection And Audit Powers

MFT - SEC.41/Int.

References:

Act: Section 1 “fuel”, “heating oil”, “non-motor fuel oil”, “person”

Bulletin CTB 003

Interpretation (Issued: 2009/04; Revised: 2014/08, 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 amended subsection 41(1) to make reference to heating oil and non-motor fuel oil.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 41 as a consequential amendment to the Act. The amendment provides the director with the audit and inspection powers necessary to determine compliance with the Act and the regulations. The provision is consistent with the Carbon Tax Act.

Subsection 41(1) provides that to determine whether the Act and the regulations are being or have been complied with, the director may, at any reasonable time, enter the business premises occupied by a person, the premises where the records of the person are kept or a site at which fuel, heating oil or non-motor fuel oil is manufactured, coloured, stored, sold or used, in order to do any of the following:

a) inspect, audit and examine books of account or other records;

b) inspect, ascertain the quantities of, and take samples of fuel, heating oil or non-motor fuel oil, including fuel in fuel tanks of motor vehicles, aircraft or ships or fuel tanks mounted on motor vehicles, aircraft or ships.

Subsection 41(2) provides that a person occupying a premises referred to subsection 41(1) must produce all books of account or other records as may be required by the director and answer all questions of the director regarding the matters referred to in subsection 41(1).

Subsection 41(3) limits subsection 41(1) by providing that the director may not enter a place that is a dwelling occupied as a residence without either the consent of the occupier or a warrant.

Subsection 41(4) provides that on being satisfied by evidence on oath that there are in a place records or other things for which there are reasonable grounds to believe that they are relevant to the matters referred to in subsection 41(1), a justice may issue a warrant authorizing a person named in the warrant to enter the place to exercise the powers referred to subsection 41(1).

Subsection 41(5) provides that, when required by the director, a person must provide to the director any books of account and other records that the director considers necessary to determine whether the Act and the regulations are being or have been complied with.

Subsection 41(6) provides that a person must not hinder, molest or interfere with a person carrying out duties under section 41 or prevent or attempt to prevent a person from doing anything that the person is authorized to under section 41.

Section 42 – Estimate Of Unremitted Tax

MFT - SEC.42/Int.

References:

Act: Section 1 “assessment”, “collector”, “person”, “retail dealer”, “security”, “tax”; Section 46; Section 46.1; Section 50; Section 57.1

Bulletin CTB 003

Interpretation (Issued: 2009/04; Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 42(1) to provide the director with the authority to make estimates for amounts, other than tax or security, not remitted as required under the Act, such as amounts collected as if they were tax or security. Subsection 42(1.1) is amended to deem those other amounts to be the amounts payable.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 42 as a consequential amendment to the Act. Subsection 42(1) was amended to clarify that an estimate may be made for both tax and security and subsection 42(1.1) was added. This provision is consistent with the Carbon Tax Act.

Effective February 21, 2007, Bill 2, Budget Measures Implementation Act, 2007 amended subsection 42(2) by reducing the assessment period from 6 to 4 years.

Effective April 10, 2003, Bill 30, Provincial Revenue Statutes Amendment Act, 2003 amended section 42 to add subsection 42(2) and subsection 42(3).

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act, (No. 2), 1995 amended section 42 to establish that the existing provisions which allow the director to make assessments based on estimates of the tax due also apply to carriers who fail to make a return or remit the tax required under the Act. This amendment was added consequential to BC's participation in the International Fuel Tax Agreement (IFTA) program. This amendment was brought into force on January 1, 1996 (the date BC became a member of IFTA) by B.C. Reg. 550/95.

This section allows the director to estimate the amount of tax collected or payable or security payable by a collector, retail dealer or consumer. The amount estimated is deemed payable or collected and not remitted. This estimated amount can be used to make an assessment against a person.

Section 43 – Assessment Of Amounts

MFT - SEC.43(0.1)-(1)/Int.

(0.1)-(1)

References:

Act: Section 1 “assessment”, “person”, “security”, “tax”; Section 44; Section 46; Section 46.1; Section 50

Bulletin CTB 003

Interpretation (Issued: 2000/09; Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 added subsection 43(0.1) in order to make permissive, rather than mandatory, the director's authority to assess a person for failing to pay tax. This ensures the director is not required to assess two different persons for the same amount owing to government and making the provision consistent with similar provisions in the other consumption tax statutes.

Subsection 43(1) is amended to provide the director with the authority to assess a person for failing to remit other amounts as required under the Act, such as amounts collected as if they were tax and amounts received as if they were security.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 43(1) as a consequential amendment to the Act. Subsection 43(1) was amended to clarify that an assessment may be made for both tax and security. This provision is consistent with the Carbon Tax Act.

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 amended the Act to delete the reference to tax collected under subsection 43(1) because the authority to make assessments for uncollected tax is provided under section 44 [failure to collect taxes] of the Act. The amendment clarified that the director may obtain information from sources other than audits and inspections (e.g., from another provincial government or from the police). This provision is consistent with provisions in the other consumption tax acts.

MFT - SEC.43(1.1)-(1.2)/Int.

(1.1)– (1.2)

References:

Act: Section 1 “assessment”, “fuel”, “person”, “security”, “tax”; Section 44; Section 46; Section 46.1; Section 48; Section 50

Bulletin CTB 003

Interpretation (Issued: 2014/08; Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended section 43(1.1) to expand the circumstances under which the director may not make an assessment under subsection 43(1). The amended subsection 43(1.1) provides that a person may not be assessed under subsection 43(1) if a penalty has already been imposed under section 44 and paid to government, or if tax or security had been paid it would be refundable.

Effective March 24, 2014, Bill 8, Budget Measures Implementation Act, 2014 amended section 43 by adding two new subsections: subsection 43(1.1) and subsection 43(1.2).

MFT - SEC.43/Int.

References:

Act: Section 1 “assessment”, “coloured fuel”, "director", “fuel”, “person”, “tax”; Section 5; Section 15; Section 46; Section 46.1; Section 50

Bulletin CTB 003

Interpretation (Issued: 2000/09; Revised: 2016/01)

Effective July 1, 2015, Bill 10 Budget Measures Implementation Act, 2015 amended subsection 43(2) to clarify that the director is not required to assess a person for the amount of tax payable as a result of an unauthorized use of coloured fuel if the director is required, in respect of the same fuel, to assess the person for the amount of tax payable under subsection 43(2.01) as a result of an unauthorized use of locomotive fuel. This amendment is a consequence of allowing coloured fuel to be purchased for use, or be used, to operate a locomotive under section 15 [prohibition against unauthorized purchase or use of coloured fuel].

Effective July 30, 1993, Bill 18, Motor Fuel Tax Amendment Act, 1993 added subsection 43(2).

Subsection 43(2) provides that if it appears from an inspection, audit or examination or from information available to the director that fuel on which a person has paid tax under section 5 [tax on coloured fuel] has been used for a purpose not authorized by section 15 [prohibition against unauthorized purchase or use of coloured fuel], the director must determine the difference between the tax paid by the person on that fuel and the tax that the person would have paid on that fuel if the fuel had not been taxed as coloured fuel, and assess the person for the difference.

An estimate or assessment under section 43 can be appealed to the Minister under section 50 [appeal to minister].

MFT - SEC.43(2.01)/Int.

(2.01)

References:

Act: Section 1 “assessment”, “fuel”, “locomotive fuel”, “person”, ”‘tax”; Section 6; Section 46; Section 46.1; Section 50

Bulletin CTB 003

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective February 20, 2008, Bill 2, Budget Measures Implementation Act, 2008 added subsection 43(2.01).

Subsection 43(2.01) provides that if it appears from an inspection, audit or examination or from information available to the director that fuel on which a person has paid tax under section 6 [tax on marine diesel fuel and locomotive fuel] has been used other than in any rolling stock or other vehicle when run on rails, the director must:

a) determine the difference between the tax paid by the person on that fuel and the tax that the person would have paid on that fuel if the fuel had not been taxed as locomotive fuel, and

b) assess the person for the difference determined under paragraph (a).

An estimate or assessment under section 43 can be appealed to the Minister under section 50 [appeal to minister].

MFT - SEC.43(2.02)/Int.

(2.02)

References:

Act: Section 1 "assessment", "person", "security", "tax"; Section 21; Section 25

Bulletin CTB 001

Interpretation (Issued: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 43.

A new subsection 43(2.02) was added.

Subsection 43(2.1) requires the director to assess a person that made a deduction under subsection 25(3) that was in excess of the amount due to the person. Under subsection 25(3), a person who is required to file a return for tax or security may, instead of submitting a written refund application, make a deduction from their return. However, the amount claimed in this manner is still a refund. Subsection 25(3) simply provides the claimant with a choice as to how they claim a refund.

Conversely, section 21 is structured so as to provide either a refund or a deduction. The deduction is not a refund but rather a deduction of the amount that could otherwise be paid to the collector as a refund.

The new subsection 43(2.02) explicitly requires the director to assess a person who has made an excess deduction under subsection 21(3).

MFT - SEC.43(2.1)-(2.11)/Int.

(2.1)-(2.11)

References:

Act: Section 1 “assessment”, “person”, “tax”; Section 25; Section 46; Section 46.1; Section 50

MFTR: Section 5.2

Bulletin CTB 003

Interpretation (Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 added subsection 43(2.11) to provide the circumstances under which the director is not required to assess a person under subsection 43(2.1) for claiming a refund or taking a deduction to which they were not entitled. These circumstances include the following with respect to the sale of the fuel by the person or subsequent sale of the fuel:

  • the tax required to be paid or remitted has been paid or remitted,
  • a penalty has been imposed and paid in accordance with section 46 for failing to collect the tax, or
  • a person to whom the fuel was sold would be entitled to a refund had they paid the tax or security.

This ensures fairness for taxpayers and consistency with the other consumption tax statutes by limiting the circumstances in which the government would retain motor fuel tax revenue twice for the same fuel.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 43(2.1) as a consequential amendment to the Act.

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 amended the Act to establish that the interest imposed on an assessment for an overpayment of a refund claim under subsection 43(2.1) is to be calculated in the prescribed manner.

Historically, the branch applied simple interest to audit assessments. However, this was inconsistent with the Revenue Division’s policy of applying compound interest to all outstanding tax liabilities due to the government, as well as to outstanding refunds owed to taxpayers.

This amendment ensures clear statutory authority for prescribing the manner in which interest is to be calculated. B.C. Reg. 262/2000 added section 5.2 [calculation of interest] to the Motor Fuel Tax Regulation to prescribe the method of calculating interest.

The branch began calculating interest on a compound basis on all audits as of October 1, 1999.

Effective March 26, 1997, Bill 2, Budget Measures Implementation Act, 1997 added subsection 43(2.1), which authorized the director to make assessments for overpayments of tax refunds.

Assessments can only be made for refunds issued on or after March 26, 1997. No assessment for overpaid refunds can be made for refunds paid before March 26, 1997, even though the assessment would be issued after that date.

MFT - SEC.43(2.2)-(2.3)/Int.

(2.2)-(2.3)

References:

Act: Section 1 “assessment”, “person”, "tax"; Section 49; Section 57

Interpretation (Issued: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 43.

New subsection 43(2.2) and subsection 43(2.3) were added as a consequence of the changes to the definition of "tax." The definition of "tax" was amended and, for the purposes of section 43, does not include an amount required to be paid under subsection 49.1(2) or subsection 57.2(4). Subsections (2.1) and (2.2) require the director to assess a person that has not paid an amount required to be paid under subsection 49.1(2) or subsection 57.2(4).

MFT - SEC.43(3)-(5)/Int.

(3)-(5)

References:

Act: Section 1 “assessment”, “person”; Section 46; Section 46.1; Section 50

Interpretation (Revised: 2015/04)

Effective February 21, 2007, Bill 2, Budget Measures Implementation Act, 2007 amended subsection 43(5) to reduce the assessment period from six to four years.

Effective April 10, 2003, Bill 30, Provincial Revenue Statutes Amendment Act, 2003 added subsection 43(5).

Subsection 43(3) establishes that, when making an assessment, the director must not consider or include a period longer than four years before the first notice of assessment.

Subsection 43(4) establishes that despite the four year limitation period in subsection 43(3), when making an assessment the director may consider and include any period if the assessment relates to a contravention of this Act or the regulations involving willful default or fraud.

Subsection 43(5) provides that a person may, in writing, waive the time limit in subsection 43(3) and allow the director, in making an estimate under this section, to consider and include any period specified in the written agreement.

An estimate or assessment under section 43 can be appealed to the Minister under section 50 [appeal to Minister].

Section 44 – Failure To Collect Tax

MFT - SEC.44/Int.

References:

Act: Section 1; Section 43

Bulletin CTB 003

Interpretation (Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 added paragraphs 44(3)(c) and (d) to expand the circumstances under which the director must not impose a penalty under section 44, to include the following circumstances:

  • the person has already been assessed under section 43(2.1) of the Act, or
  • subsection 43(2.1) does not apply as a result of the new section 43(2.11).

This ensures fairness for taxpayers and consistency with the other consumption tax statutes by limiting the circumstances in which the government would retain motor fuel tax revenue twice for the same fuel.

Effective March 24, 2014, Bill 8, Budget Measures Implementation Act, 2014 amended section 44 by adding subsection 44(1.1) and repealing and replacing subsection 44(3).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008, amended section 44 as a consequential amendment to the Act. The amendment clarified when a penalty for the failure to collect tax may be imposed. This provision is consistent with the Carbon Tax Act. Subsection 44(2) is repealed, subsection 44(3) has been amended and subsection 44(5.1) has been added.

Effective February 21, 2007, Bill 2, Budget Measures Implementation Act, 2007 amended subsection 44(5) to change the assessment period from six to four years.

Effective April 10, 2003, Bill 30, Provincial Revenue Statutes Amendment Act, 2003 amended section 44 to add subsection 44(5) and subsection 44(6).

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000, repealed and replaced section 44 to clarify the provisions for imposing penalties for failure to collect tax or pay a security.

Effective July 29, 1999, Bill 71, Finance and Corporate Relations Statutes Amendment Act, 1999 amended the section to clarify that a seller who paid a penalty to the province for failure to collect tax on a sale could sue the purchaser to recover an amount equal to the penalty imposed. The amendment also clarified that the seller could retain amounts recovered through the courts as compensation for the penalty paid to the province on account of the purchaser's tax liability. The amendment provided explicit authority for a seller, who paid a penalty equal to a purchaser's tax liability, to retain any amounts recovered through the courts even though the amount recovered pertains to tax payable by the purchaser to the province.

Effective December 31, 1985, the date the Motor Fuel Tax Act came into effect, this section authorizes the director to impose a penalty equal to the amount of taxes which should have been collected where an examination or audit establishes that taxes which should have been collected were not collected. Once the penalty has been paid, the province has received the tax due on that sale and does not pursue collection of tax from the purchaser.

Section 45 – Penalties

MFT - SEC.45/Int.-R.1

References:

Act: Section 1 “tax”, “security”; Section 28; Section 34.01; Section 38

Bulletin CTB 003

Interpretation (Issued: 2002/05; Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended paragraphs 45(1)(a) and (c) to clarify that penalties under section 45 apply when a person fails to remit other amounts as required under the Act, such as amounts collected as if they were tax and amounts received as if they were security.

Subsections 45(1)(b) and (c) are also amended to clarify that the director may impose penalties on a person who deducts an amount in excess of the amount they are entitled to deduct or receives a refund in excess of the amount they are entitled to receive.

Effective March 24, 2014, Bill 8, Budget Measures Implementation Act, 2014 amended section 45 by repealing and replacing subsections 45(2) and 45(3) and adding subsections 45(4) and 45(5).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 45 as a consequential amendment to the Act. The amendment clarified when penalties for the failure to remit tax or pay security may be imposed. This provision is consistent with the Carbon Tax Act.

R.1 Application of Penalty under Subsection 45(2) (Issued: 2015/04)

Subsection 45(2) of the Act provides the director with discretion to impose a penalty where a vendor sold fuel before they were appointed a collector. The penalty only applies when a vendor sold fuel before the vendor was appointed a collector for that fuel. This means that if a vendor is appointed a collector retroactively to a point before they sold the fuel, the subsection 45(2) penalty cannot apply because the vendor, under subsection 28(2.3), would have been a collector at the time the fuel was sold. However, the subsection 45(3) penalty would be available in that situation.

The policy rationale for the subsection 45(2) penalty is to provide some consequence for non-compliance with the security scheme even though the government may have received all taxes owing.

If a vendor chooses not to apply to be retroactively appointed, they should not have a lesser consequence than a vendor that does apply to be retroactively appointed.

Given that vendors that apply retroactively may be charged interest (either 60 days – or for the full period) and subject to a 10% penalty (subsection 45(3)), the penalty for vendors who do not apply retroactively under subsection 45(2) should also be applied in most cases. Otherwise, the ministry’s policy creates a disincentive to apply to be a collector retroactively.

However, the one circumstance in which the director may choose not to apply the penalty is where a vendor is no longer operating in BC and made limited sales of fuel to collectors, all of whom paid security on the fuel to government. In this case, there is no revenue loss to the province, other than the additional interest that could have been earned (likely no greater than 60 days).

In addition, although there is no limitation period on the application of the penalty under subsection 45(2), the director will generally not apply the penalty to sales that occurred greater than 4 years prior unless the vendor was wilful.

Section 45.1 – Board Member’s Liability

MFT - SEC.45.1/Int.

References:

Act: Section 1 “board member”; Section 45.2; Section 46.1

Interpretation (Issued: 2015/04; Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 45.1. The amendment clarifies that the joint and several liability of a board member under the section includes liability for interest on penalties.

The amendment also updates cross references to provisions in the Bankruptcy and Insolvency Act (Canada) and the Companies' Creditors Arrangement Act (Canada).

Effective May 13, 2004, Bill 34, Provincial Revenue Statutes Amendment Act, 2004 added section 45.1.

Section 45.1 imposes liability on a board member of a corporation for failure of a corporation to pay or remit tax or security as required by the Act, subject to a number of limits, and subject to the defense that the board member behaved reasonably (known as a “due diligence” defense).

Under subsection 45.1(1), a board member of a corporation is liable for the tax or security required to be paid or remitted by the corporation, but which the corporation failed to pay.

The board member may be liable for the entire amount or may share that liability with other board members or the corporation or both.

However, under subsection 45.1(2), this liability only arises if at least one of the following events occurs:

a) The director has filed a certificate of debt owed by the corporation with the court under subsection 55(1) [summary proceedings without action];

b) The corporation has dissolved or commenced proceedings to liquidate or dissolve;

c) The corporation has taken action (assignment in bankruptcy, filed a notice of an intent to make a proposal with an official receiver, or made a proposal) under the Bankruptcy and Insolvency Act (Canada);

d) A receiving order has been made against the corporation under the Bankruptcy and Insolvency Act (Canada);

e) The corporation has obtained a court order granting a stay of proceedings under section 11.02 of the Companies’ Creditors Arrangement Act (Canada); or,

f) The corporation has taken action analogous to paragraphs (c) to (e) above in another jurisdiction.

Under subsection 45.1(3), a board member may defend against liability by showing they exercised the care, diligence and skill that a reasonably prudent person would exercise to prevent the corporation’s failure to remit tax or pay security as required by the Act.

Under section 50 [appeal to minister], a person who acts as a board member may be deemed to be a board member.

The amount in which the director may assess the board member is determined by section 46.1 [assessment against board member].

Section 45.2 – Deemed Board Member

MFT - SEC.45.2/Int.

References:

Act: Section 1 “board member”; Section 45.1; Section 46.1

Interpretation (Issued: 2015/04)

Effective May 13, 2004, Bill 34, Provincial Revenue Statutes Amendment Act, 2004 added section 45.2.

Section 45.2 allows the director to deem certain persons to be board members of a corporation, with the result that such persons may be liable for the failure of the corporation to pay tax or security (section 45.1). The ability of the director to deem a person a board member is subject to the limitations discussed below.

Subsection 45.2(1) allows the director to request information from a person or a corporation to confirm or rebut the director’s belief that the person has performed some or all of the functions of a board member despite not being on the board of the corporation.

Subsection 45.2(2) provides that the director may deem a person to be a board member if the person or the corporation fails or refuses to provide information or if the information provided confirms the director’s belief that the person performed some or all of the functions of a board member.

Subsection 45.2(3) states that the director must not decide that a person performed some or all of the functions of a board member solely on the basis that the person:

  • Participated in management of the corporation under direction of a shareholder, a board member or a senior officer,
  • Was a professional who’s primary participation in the management of the corporation was the provision of professional services,
  • Was a trustee in bankruptcy in the course of administering the bankrupt’s estate, or
  • Was a receiver, receiver manager or secured creditor whose primary participation in the management of the corporation was to enforce a debt obligation of the corporation.

Subsection 45.2(4) states that if a person is deemed to be a board member, the person’s term as board member is the period during which they performed some or all of the functions of a board member.

Subsection 45.2(6) states that if the director deems a person to be a board member then the director must immediately notify the person and the relevant corporation.

Section 45.3 – Penalty For Unauthorized Purchase Or Use Of Coloured Fuel

MFT - SEC.45.3/Int.

References:

Act: Section 1 “coloured fuel”, "director"; Section 15

MFTR: Section 15.51

Bulletin MFT-CT 003

Interpretation (Issued: 2009/04; Revised: 2016/01)

Effective July 1, 2015, Bill 10 Budget Measures Implementation Act, 2015 repealed and replaced subsection 45.3(1) to authorize the director to impose on a person who the director is satisfied purchased or used coloured fuel for an unauthorized purpose:

  • a penalty equal to the greater of the current penalty of 3 times the tax that would have been payable if the fuel had not been coloured fuel and a fixed monetary penalty, in an amount, not to exceed $1 000, determined under the regulations, or
  • a fixed monetary penalty, in an amount, not to exceed $1 000, determined under the regulations, if the director considers that it is impractical to ascertain the quantity of coloured fuel purchased or used for an unauthorized purpose;

The amendment also provides for the determination of a separate fixed monetary penalty amount for each vehicle if coloured fuel is purchased or used contrary to section 15 [prohibition against unauthorized purchase or use of coloured fuel] for the purpose of operating more than one vehicle.

The amendments enhance the Ministry's ability to protect provincial revenue by deterring the unauthorized use of coloured fuel.

MFTR section 15.51 specifies the fixed monetary amounts for each contravention.

The penalty can be issued through a Notice of Assessment (see subsection 46(1)) and can be appealed (see subsection 50(1)(d)).

Subsection 45.3(2) is amendment to add a reference to section 5.1 [tax on coloured fuel if declaration not obtained].

Effective February 16, 2005, Bill 8, Taxation Statutes Amendment Act, 2005 added a penalty to the Act for the unauthorized purchase or use of coloured fuel. This penalty is was equal to three times the tax that would have been payable if the fuel had not been coloured. The penalty was intended to discourage persons from purchasing and using coloured fuel for unauthorized purposes. Under the previous legislation, the only enforcement available to the ministry was prosecution.

The purposed of this administrative penalty was to provide a deterrent to purchasers using coloured fuel for unauthorized purposes. Prosecutions would be unlikely as the amount of tax involved with respect to a single purchaser would be small and the cost of a court prosecution would be difficult to justify in the circumstances.

Section 45.4 – Penalties For Unauthorized Uses Of Heating Fuel Or Non-Motor Fuel Oil

MFT - SEC.45.4/Int.

References:

Act: Section 1 “coloured fuel”, “heating oil”, “non-motor fuel”; Section 5; Section 16.7

Bulletin MFT-CT 003

Interpretation (Issued: 2014/08; Revised: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 45.4. The provision adds two new penalties.

Under subsection 45.4(1), if a person uses a heating oil or non-motor fuel oil to generate power by means of an internal combustion engine (i.e., uses a substance contrary to subsection 16.7(2) [unauthorized uses of uses of heating oil and non-motor fuel oil]), then the penalty is:

  • if the substance was coloured and was used for an authorized coloured fuel purpose, 3 times to amount of the tax that would be payable under subsection 5(2) [tax on coloured fuel] if that section applied to that use.
  • in any other case, 3 times the amount of tax payable under subsection 16.7(5).

Under subsection 45.4(2), if a person used non-motor fuel oil in a furnace, boiler or open flame burner or used heating oil in a furnace, boiler or open flame burner before being coloured, then the person is liable to a penalty of 3 times the tax payable under subsection 16.7(5).

Section 46 – Notice Of Assessment

MFT - SEC.46/Int.

References:

Act: Section 1 “assessment”, “person”; Section 48; Section 48.1

Interpretation (Issued: 2014/07; Revised 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 46.

Subsection (1) was reworded to be consistent with other taxation statutes. Subsection (1) was also made subject to a new subsection (1.2). The new subsection authorizes the director to issue a notice of assessment to the custodian or trustee in bankruptcy of a person in relation to whom the director has made an estimate or assessment or has imposed a penalty.

Not only does the amendment make the section consistent with similar provisions of other taxation Acts, the amendment also authorizes the director to issue a notice of assessment to a person who has the ability to pay amounts owing to government - the custodian or trustee. In certain situations, the person with the liability may no longer have control over the assets required to satisfy a liability to the government. The amendment enhances the government's ability to collect amounts owing.

Effective June 23, 2014, Bill 8, Budget Measures Implementation Act, 2014 amended section 46 by adding subsection 46(1.1).

Subsection 46(1) provides that the director must issue a notice of assessment to the person liable to pay the amount estimated, assessed or imposed.

Subsection 46(1.1) provides that if the director assesses interest under section 48 [interest until notice of assessment issued] or section 48.1 [interest after notice of assessment issued], the director may issue a notice of assessment to the person liable to pay the amount of interest assessed.

Subsection 46(3) provides that in the absence of evidence to the contrary, the amount estimated, assessed or imposed under the Act is due and owing, and that the onus of proving otherwise is on the person liable to pay the amount estimated, assessed or imposed.

Subsection 46(4) provides that the assessment is valid and binding, subject to being amended, changed or varied on appeal or by reassessment.

Section 46.1 – Assessment Against Board Member

MFT - SEC.46.1/Int.

References:

Act: Section 1 “assessment”, “board member”, “security”, “tax”; Section 42; Section 43; Section 44; Section 45.1

Interpretation (Issued: 2009/04; Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 46.1. The amendment clarifies that the director may assess a board member under the section for interest on penalties.

The definition of tax, which includes penalties and interest, caused ambiguity in terms of determining the amount a board member may be assessed when read within the previous provision. The intention is for the amount to include any penalties as well as interest on the tax or security and on any penalties imposed.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 46.1 as a consequential amendment to the Act. This section was amended to clarify the assessment of tax and security against a board member in the case of an assessment against a corporation. This provision is consistent with the Carbon Tax Act.

Section 47 – Irregularities

MFT - SEC.47/Int.

References:

Act: Section 1 “assessment”, “person”; Section 47

Interpretation (Issued: 2015/04)

Since its inception on December 31, 1985 (Bill 63 – Motor Fuel Tax Act, 1985), the Act has provided a provision concerning irregularities.

Section 47 provides that an assessment made, or a penalty imposed, under the Act by the director must not be varied or disallowed by a court because of an irregularity, informality, omission or error on the part of a person in the observation of any directory provision up to the date of the issuing of the notice of assessment.

Section 48 - Interest On Amounts Payable

MFT - SEC. 48/Int. - R.3

References:

Act: Section 43; Section 46; Section 50

MFTR: Section 5.2

Bulletin CTB 005

Interpretation (Issued: 2007/06; Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 expanded the definition of "non-assessed amount" to include amounts owing in relation to:

  • a refund received that is in excess of the amount for which they were eligible to receive, or
  • an amount deducted that is in excess of the amount for which they were eligible to deduct,

Subsections 48(3.1) and (3.2) were added to provide the director with the authority to assess interest only, in circumstances where no assessment has been issued, with respect to the two new amounts owning under the definition of "non-assessed amount."

Effective June 23, 2014, Bill 8, Budget Measures Implementation Act, 2014 repealed and replaced section 48.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 48(1), as a consequential amendment to the Act, by updating wording to be consistent with other amendments respecting interest on amounts payable. This provision is consistent with section 55 of the Carbon Tax Act.

Effective May 18, 2006, Bill 19, Small Business and Revenue Statutes Amendment Act, 2007 amended subsection 48(1) of the Act to make the language respecting the calculation of interest consistent with other taxation statutes. This housekeeping amendment does not change the effect of subsection 48(1). Although Bill 19 received royal assent on May 31, 2007, the amendment to subsection 48(1) is retroactive to May 18, 2006, to coincide with the date when MFTR sections 5.3 and 5.4 (repealed), which allowed for netting of interest on refunds against interest on audit assessments, came into force.

Effective March 31, 1999, Bill 52, Taxation Statutes Amendment Act, 1999 amended the legislation to clarify that the director is authorized to make an assessment for interest payable on outstanding tax liabilities. The previous provision did not explicitly provide for making an assessment for such interest charges.

R.1 Interest Rates – IFTA (Revised: 2015/04)

Before January 1, 1996, interest rates for all amounts owed to the province under the Act were prescribed under the Interest Rates under Various Statutes Regulation (B.C. Reg. 386/92). These rates were the same as those prescribed for money owed to the province under the Social Service Tax Act (repealed).

Effective January 1, 1996, the interest rates on money owed to the province by IFTA carriers were amended by B.C. Reg. 550/95, to be 2% above the Canadian Federal Treasury Bill rate set on the 15th day of the month immediately preceding the calendar quarter, and adjusted every calendar quarter, prescribed under subsection 5(a) of the IRUVSR [interest rate re Motor Fuel Tax Act]. This formula for interest rates was introduced to accommodate the interest rate provisions of the International Fuel Tax Agreement (IFTA).

R.2 Interest Rates on Receivables - Non-IFTA (Revised: 2015/04)

The interest rates for money owed to the province, other than money owed by IFTA carriers (see R.1), are prescribed by subsection 5(b) [interest rate re Motor Fuel Tax Act] of the IRUVSR.

R.3 Application of 60 Days Interest (Issued: 2016/01)

Effective March 24, 2014, Bill 8, Budget Measures Implementation Act, 2014 eliminated the director's obligation to assess a person for the failure to pay security where the director is satisfied that the person to whom the fuel was sold would have been entitled to a refund of security if they had paid it (see subsection 43(1.2)). To ensure that government did not lose revenue in the form of interest earned on security it should have received prior to refunding the security to the person that purchased the fuel, effective June 23, 2014, the director was given the discretion under subsection 48(3) to impose 60 days interest on the security that would have been payable but was not assessed.

The reason that 60 days was chosen was that it was an approximation of the length of time that government would have had the security, paid by the collector before it was refunded to the person to whom the collector sold the fuel (assuming the security scheme worked as intended).

Given that the 60 days is based on an estimate of the time value of money lost and the fact that there are cases where a person could receive a refund well before government had the security for 60 days, a person that sold fuel will be given a warning in cases where it is the first time that a person has failed to pay security and the director is satisfied that the person to whom the fuel was sold would have been entitled to a refund of security if they had paid it. In addition, the person will be advised that if subsequent errors of this type are discovered, the Branch may assess 60 days interest on the amount of security that should have been paid.

Section 48.1 - Interest After Notice Of Assessment Issued

MFT - SEC. 48.1/Int.

References:

Act: Section 46; Section 50

MFTR: Section 5.2

Bulletin CTB 005

Interpretation (Issued: 2014/07; Revised: 2015/04)

Effective June 23, 2014, Bill 8, Budget Measures Implementation Act, 2014 added section 48.1.

Section 48.1 provides that the director may assess, at any time, interest, calculated at the prescribed rate and in the prescribed manner, on an amount owing to the government under the Act from the date that a notice of assessment is issued in relation to the amount owing.

The manner is prescribed in section 5.2 of the MFTR and the rate is prescribed in section 5 [interest rate re Motor Fuel Tax Act] of the Interest Rate Under Various Statues Regulation.

Section 49 – Inspection Powers

MFT - SEC.49/Int.

References:

Act: Section 41; Section 64

Interpretation (Issued: 2009/04; Revised: 2014/08; 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 amended section 49 by adding a new subsection (0.1) that incorporates references to section 16.2 [authority to colour heating oil and non-motor fuel] and section 16.7 [unauthorized uses of heating oil and non-motor fuel oil].

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 amended section 49 to establish that peace officers must obtain a warrant from a justice before conducting a search of a premise or vehicle and obtaining samples of fuel, unless it is impracticable to obtain such a warrant. Where it is impracticable to obtain a warrant, this section permits a peace officer to stop a motor vehicle to inspect and take samples of the contents of any tanks or containers, including the fuel supply tank of a motor vehicle if the peace officer has reasonable grounds. Prior to April 1, 2000, a warrant was not required to conduct a search of a fuel tank.

To determine compliance with the coloured fuel provisions of the Act, section 49 of the Act provides authorization for peace officers to inspect fuel tanks and containers on vehicles under specific circumstances.

Section 49.1 – Certificate Required For Sales In Bulk

MFT - SEC.49.1/Int.

References:

Act: Section 1 “vendor”, “wholesale dealer”; “retail dealer”

Interpretation (Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 repealed and replaces section 49.1.

Section 49.1 of the Act provides the rules for sellers and purchasers when fuel is sold at a bulk transaction. "Bulk transaction" is a defined term for the purposes of the provision. Under these rules, the director may issue a clearance certificate to the seller. There is no direct obligation on either the seller or the purchaser to obtain a clearance certificate. However, if the purchaser does not obtain the certificate from the seller, the purchaser becomes liable for an amount equal to the outstanding tax owed by the seller.

The amendment makes the section consistent with similar provisions of other taxation Acts.

The purchaser is only responsible for liabilities related to the seller's fuel or business sold to the purchaser because subsection (2) refers to an amount equal to the total of all amounts owning under the MFTA by the seller in respect of the "seller's business." "Seller's business" is defined in subsection (1) as the seller's business referred to in the definition of "bulk transaction."

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added section 49.1 as a consequential amendment to the Act. This section, consistent with the Carbon Tax Act and other consumption tax statutes, requires clearance certificates for sales in bulk.

Section 50 - Appeal To Minister

MFT - SEC. 50/Int.

Reference:

Act: Section 1 "collector", "deputy collector", "director", "refiner collector", "registered consumer certificate", "retail dealer", "security"; Section 9.1; Section 14; Section 14.1; Section 16.3; Section 19; Section 20; Section 20.1; Section 20.11; Section 20.12; Section 20.101; Section 20.2; Section 21; Section 22; Section 23; Section 24; Section 28; Section 29; Section 30; Section 37; Section 37.1; Section 38; Section 39; Section 40; Section 42; Section 43; Section 44; Section 45; Section 45.3; Section 45.4; Section 46.1; Section 48; Section 57.1

MFTR: Section 5.02

Bulletin GEN 002

Interpretation (Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended paragraph 50(1)(b) to add a reference to section 22.1 [refund to purchaser of coloured fuel who pays tax under section 5.1, but uses fuel for authorized purpose]. This allows taxpayers who are denied a refund under section 22.1 of the Act to appeal to the minister.

Effective July 1, 2015, Bill 10, Budget Measures Implementation Act, 2015 amended section 50 to add a reference to section 20.12 [refund of security on coloured fuel for deputy collectors and retail dealers]. This amendment is consequential to the addition of section 20.12 and ensures that the decision of the director to deny a refund claim made under section 20.12 may be appealed to the minister.

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 amended section 50 by adding references to:

  • Section 16.3 [authority to sell coloured heating oil and coloured non-motor fuel oil] in paragraph 50(1)(a);
  • Section 9.1 [tax paid under “Provincial Sales Tax Act” on natural gas used in stationary internal combustion engine] in paragraph 50(1)(b); and
  • Section 45.4 [penalties for unauthorized uses of heating oil or non-motor fuel oil] in paragraph 50(1)(d).

Effective January 1, 2010:

  • Paragraph 50(1)(c) was amended to allow for an appeal of a cancellation of an appointment as a refiner collector;
  • Paragraph 50(1)(c.1) was amended to allow an appeal of a refusal to appoint a refiner collector;
  • Subsection 50(1.1) was amended to allow an appeal of a decision to cancel a refiner collector's appointment and
  • Paragraph 50(5)(b)(i) was amended to authorize the minister to direct the director to appoint an appellant a refiner collector.

Effective September 2, 2009, (retroactive from October 29, 2009), paragraph 50(1)(b) was amended to authorize an appeal under section 20.101 [treaty first nation tax refunds].

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 50 as a consequential amendment to the Act. Section 50 is amended to clarify what may be appealed to the minister, by adding new provisions under subsections 50(1.1), 50(5) and 50(6).

Effective July 1, 2008 (retroactive from October 29, 2009), Bill 2, Budget Measures Implementation Act (No. 2), 2009 added paragraph 50(1)(c.4). This section grants the right to appeal a decision refusing an authorization to re-label fuel under subsection 29(2) [prohibition against relabelling — fuel]. Additionally, subsection 50(5) was amended to make reference to paragraph (1)(c.2) rather than (c.3). Subsection 50(6) was also amended to make reference to paragraph (1)(c.3) rather than paragraph (c.4). A new subsection (7) was added and is similar to subsections (5) and (6) but makes reference to paragraph (1)(c.4).

Effective February 16, 2005, Bill 8, Taxation Statutes Amendment Act, 2005 added a penalty to the Act for the unauthorized purchase or use of coloured fuel. This penalty is equal to three times the tax that would have been payable if the fuel had not been coloured. The penalty is intended to discourage persons from purchasing and using coloured fuel for unauthorized purposes. Under the previous legislation, the only enforcement available to the ministry was prosecution. The penalty can be issued through a notice of assessment, under subsection 46(1) [notice of assessment] and can be appealed, under paragraph 50(1)(d).

Ideally, this administrative penalty will deter purchasers from using coloured fuel for unauthorized purposes. Prosecution would be unlikely because the amount of tax involved with respect to a single purchase would be small and the cost of a court prosecution would be difficult to justify in such a circumstance.

Effective September 15, 2004, Bill 42, Provincial Revenue Statutes Amendment Act (No. 2), 2003 amended paragraph 50(1)(a) by adding suspension or cancellation of an authorization to colour fuel or to sell coloured fuel to the list of decisions of the director that can be appealed to the minister.

Effective May 13, 2004, Bill 34, Provincial Revenue Statutes Amendment Act, 2004 added to the list of decisions of the director that can be appealed to the minister:

  • Paragraph 50(1)(b): a refund where there is joint and several liability;
  • Paragraph 50(1)(d): an assessment against a board member; and
  • Paragraph 50(1)(g): the decision of the director to deem a person a board member based records or information provided to the director confirming that the person performed some or all of the functions of a member of the board of directors of the corporation.

Effective April 10, 2003, Bill 30, Provincial Revenue Statutes Amendment Act, 2003 amended paragraph 50(1)(b) by adding refunds allowed under the regulations to the list of decisions of the director that can be appealed to the minister.

Effective July 29, 1999, Bill 71, Finance and Corporate Relations Statutes Amendment Act, 1999 amended the existing appeal provisions to establish that the minister may make changes to interest charges included in an assessment under appeal, or may change the nature of an assessment under appeal.

The previous provisions simply allowed the minister to affirm or amend an assessment or disallowed refund. There was no explicit authority for the minister to reduce or cancel interest charges where the minister considered such charges excessive or unwarranted.

Similarly, the previous provisions did not allow for changing the nature of an assessment based on information provided on appeal—for example, from a penalty for failure to collect tax to a penalty for failure to remit tax.

Previously, where the evidence provided during an appeal indicated an error in the basis for the assessment, the assessment had to be cancelled and replaced by a new notice. The appellant then had to initiate a new appeal, of the second assessment, which duplicated the appellant's efforts. This was frustrating and time consuming for both the appellant and government.

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act (No. 2), 1995 added, by B.C. Reg. 550/95 and consequential to BC's participation in the IFTA, the following to the decisions of the director which could be appealed, under paragraph 50(1)(e):

  • A refusal to issue or renew an IFTA carrier licence, under section 19 [issue of licences and decals to carriers].

Effective March 23, 1994, Bill 19, Taxation Statutes Amendment Act, 1994 increased the time limit in which a decision of the director may be appealed, under subsection 50(2), from 60 days to 90 days.

Effective July 30, 1993 (Bill 18, 1993), the following decision was added:

  • A suspension or cancellation of an authorization to colour fuel (consequential to section 14 [authority to colour fuel].

Effective June 5, 1992, (Bill 31, 1992), this section was amended to allow taxpayers to appeal to the minister the following decisions of the director:

  • Disallowed refund claim for tax paid under a mistake of law, consequential to section 27 (now repealed);
  • Cancellation of an appointment as a collector, consequential to section 30 [suspension or cancellation of collector's appointment];
  • An estimate, assessment, or imposition of tax under sections 42 [estimate of unremitted tax], 43 [assessment of tax], 44 [failure to collect taxes], 45 [failure to remit or pay taxes or security] or 48 [interest until notice of assessment issued].

Allowing an appeal to the minister is a standard provision in consumption tax statutes.

Section 51 - Appeal To The Court

MFT - SEC. 51/Int.

References:

Act: Section 50

MFTR: Section 5.02; Section 51.92

Bulletin GEN 002

Interpretation (Revised: 2009/04, 2015/04)

Effective July 29, 1999, Bill 71, Finance and Corporate Relations Statutes Amendment Act, 1999 added a provision to clarify that either the taxpayer or the government may raise issues and submit evidence in a court appeal that were not included in the appeal to the minister.

Effective March 23, 1994, Bill 19, Taxation Statutes Amendment Act,1994 increased the time limit in which a decision of the minister may be appealed to the courts from 60 days to 90 days.

A taxpayer may appeal an assessment to the minister. If the taxpayer is not satisfied with the minister's decision, the taxpayer may appeal that decision to the courts. The previous provisions were silent on whether an appeal to the court was a new hearing, which may have discouraged taxpayers (eg, those who though that an appeal was limited to a review of the minister’s decision, without the admission of any new evidence) from appealing to the court

The amendment clearly establishes that a court appeal is a new hearing and that appellants are not confined to the arguments and evidence presented in the appeal. This amendment is in keeping with longstanding application of the appeal provisions.

Subsection 51(1) provides that a decision of the minister under section 50 [appeal to minister] may be appealed to the Supreme Court by way of a petition proceeding.

Subsection 51(2) provides that the Supreme Court Civil Rules relating to petition proceedings apply to appeals under section 51, but Rule 18-3 of those rules does not apply.

Subsection 51(3) provides that a petition must be filed in the court registry within 90 days after the date on the minister's notice of decision.

Subsection 51(4) provides that within 14 days after the filing of the petition under subsection 51(3), the petition must be served on the government in accordance with section 8 of the Crown Proceeding Act and the government must be designated "Her Majesty the Queen in right of the Province of British Columbia".

Subsection 51(4.1) provides that an appeal under section 51 is a new hearing that is not limited to the evidence and issues that were before the minister.

Subsection 51(5) provides that the court may

(a) dismiss the appeal,

(b) allow the appeal,

(c) vary the decision from which the appeal is made, or

(d) refer the decision back to the director for reconsideration.

Subsection 51(6) provides that an appeal lies from a decision of the court to the Court of Appeal with leave of a justice of the Court of Appeal.

Section 52 - Pending Appeal Not To Affect Tax Collection

MFT - SEC. 52/Int.

References:

MFTR: Section 51.92

Interpretation (Issued: 2009/04; Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 52. A new subsection (3) was added. The amendment requires an appellant to pay the additional amount owing, and interest on that amount, if the amount of an estimate or assessment or an amount imposed is increased on appeal.

Previously, the government was required to refund an amount when decreased under appeal but there was no requirement for an appellant to pay government when the amount under the appeal was increased.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amends subsection 52(2) as a consequential amendment to the Act. This provision is consistent with section 58 the Carbon Tax Act.

Subsection 52(1) establishes that neither the decision to file an appeal nor any delay in the hearing of an appeal (to the minister or to the court) affects the following, in respect of the estimated, assessed or imposed amount that is the subject matter of the appeal:

  • The date when payment must be made;
  • The calculation of penalties or interest or any liability for payment under the Act; or
  • The collection of the amount.

Subsection 52(2) establishes that if a person's appeal is upheld, the person is entitled to a refund of any excess amount the person paid, and any additional interest or penalties the person paid.

Section 53 – Collection Bond

MFT - SEC.53/Int.

References:

Act: Section 1 “collector”, “licensed carrier”, “motive fuel”, “person”, “registered consumer”, “security”, “tax”; Section 19; Section 30; Section 37.1

Interpretation (Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 53(5) to clarify that a bond may be applied to other amounts, other than tax or security, that are required to be remitted to government, such as amounts collected as if they were tax and amounts received as if they were security.

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 repealed and replaces section 53. The section allows the director to require a carrier who has applied for a carrier licence, a vendor who has applied to be appointed as a collector, or a person who has applied for a registered consumer certificate to provide a bond.

While the section allows the director to vary the bond amount, the bond must not be more than the "maximum bond amount" which is set out in (1).

The section also allows the director to return a bond, or pay an amount equal to the amount remaining on a bond, to the person who deposited the bond.

The new provision expands the abilities of the director to fairly and efficiently administer bonding requirements. For example, previously the director did not have legislative authority to return a bond when the provider ceased operations.

The director can reduce the burden on the business to offset a risk that no longer exists when the volume of fuel expected to be sold decreases or the director can protect the government from risk if the volume increases.

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 amended the Act to expand the bonding provisions to allow the director to apply a bond against unpaid security as well as to any interest owed under the Act. The previous provision only allowed the bond to be applied to outstanding tax liabilities, and it was unclear whether this included outstanding interest applied to the liabilities.

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act, (No. 2), 1995 amended subsection 53(1) to establish that existing provisions under which the director may require the posting of a bond as security against failure to pay tax required under the Act also apply to International Fuel Tax Agreement (IFTA) carriers. A bond is generally only required if the carrier has a history of failing to pay tax imposed under the Act. This amendment was made effective January 1, 1996 (the date that BC became a member of IFTA) by B.C. Reg. 550/95.

Section 54 – Court Action To Recover Amount Owing

MFT - SEC.54/Int.

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 54 as a consequential amendment to the Act. The amendment updated wording to make the section consistent with other amendments. This provision is consistent with the Carbon Tax Act.

Section 54 provides that an amount owing to the government under this Act may be recovered by action in a court.

Section 55 – Summary Proceedings

MFT - SEC.55/Int.

References:

Act: Section 1 “person”; Section 45.1

Interpretation (Issued: 2009/04; Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 repealed and replaced subsection 55(3). The new subsection (3) clarifies that all proceedings may be taken on a certificate issued and filed by the director as if it were a judgment of the court.

The amendment adds a new subsection (4) that provides that the director may issue and file a new certificate if the amount specified in the certificate that has been issued and filed is different from the actual amount owing. New subsections (5) and (6) provide for the manner and the effect of filing the new certificate.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 55(1) as a consequential amendment to the Act. The amendment updated wording to make the subsection consistent with other amendments respecting amounts owing. This provision is consistent with the Carbon Tax Act.

Subsection 55(1) provides that if a person fails to pay or remit an amount owing to the government under this Act, the director may issue a certificate specifying the amount owed and the name of the person who owes it.

Subsection 55(2) provides that the director may file a certificate issued under subsection 55(1) with the BC Supreme Court.

Section 56 – Alternate Remedies

MFT - SEC.56/Int.

References:

Act: Section 1 “person”

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 56(1) and subsection 56(2) as a consequential amendment to the Act. The amendments updated wording to ensure consistency with other amendments. This provision is consistent with the Carbon Tax Act.

Subsection 56(1) provides that remedies available to the government for the recovery of an amount owing under this Act may be exercised separately, concurrently or cumulatively.

Subsection 56(2) provides that the liability of a person for the payment of an amount owing under this Act is not affected by a fine or penalty imposed on or paid by the person for contravention of this Act.

Section 57 – Attachment Of Funds

MFT - SEC.57/Int.

References:

Act: Section 1 “board member”, “person”, “tax”; Section 45.1

Interpretation (Revised: 2009/04, 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 57(1) as a consequential amendment to the Act to simplify the definition of "taxpayer" for the purposes of the attachment provisions. This provision is consistent with the Carbon Tax Act.

Effective May 13, 2004, Bill 34, Provincial Revenue Statutes Amendment Act, 2004, amended subsection 57(1) to add a board member who was jointly and severally liable with a corporation under section 45.1 [board member’s liability] under the definition of “taxpayer.”

Effective March 31, 1999, Bill 52, Taxation Statutes Amendment Act, 1999 amended the provisions for issuing third party demands to authorize the issuance of demands by fax or other electronic means. The previous prevision required that a demand be served either in person, which is impractical, or by registered mail, which may take several days to be delivered.

The Act also amended the provisions to require payment on receipt of the demand or as soon as the funds become available. Under the previous provisions, the demand remained in place for 90 days from the date of issue. By policy, some banks and financial institutions waited until the end of the 90-day period to pay the debt. If demands from other creditors were received within that time, the debt would be shared among the creditors, reducing the province's ability to recover the full amount of the liability. The amendment to require immediate payment brought British Columbia's third party demand practices in line with those of other provinces and the federal government.

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act (No. 2), 1995 amended subsection 57(1) to establish that the existing authority for the province to place third party demands against monies owed to a taxpayer who has failed to pay tax due under the Act also applies to International Fuel Tax Agreement (IFTA) carriers who are indebted to the government. This amendment was made effective January 1, 1996 (the date that BC became a member of IFTA) by B.C. Reg. 550/95.

Subsection 57(1) defines “taxpayer” for the purpose of this section to mean any person who is liable to pay or remit an amount under this Act.

Subsection 57(2) provides that if the director knows or suspects that a person is or is about to become indebted or liable to make a payment to a taxpayer, the director may demand that a person pay all or part of the money that would have been payable to a taxpayer to the government on account of the taxpayer’s liability under this Act.

Subsection 57(3) provides that, without limiting subsection 57(2), if the director knows or suspects that a person is about to advance money to, or make a payment on behalf of a taxpayer, or make a payment in respect of a negotiable instrument issued by a taxpayer, the director may demand that that person pay to the government on account of the taxpayer’s liability under this Act, the money that would otherwise be advanced or paid.

Subsection 57(3.1) provides that a demand under this section may be served by personal service, registered mail, email or fax.

Subsection 57(4) provides that, if under this section the director demands that a person pay to the government, on account of the liability under this Act of a taxpayer, money otherwise payable by that person to the taxpayer as interest, rent, remuneration, a dividend, an annuity or other periodic payment, the demand:

a) is applicable to all of those payments to be made by the person to the taxpayer until the liability under this Act is satisfied, and

b) operates to require payments to the government out of each payment of the amount stipulated by the director in the demand.

Subsection 57(5) provides that money or a beneficial interest in money in a savings institution that is on deposit to the credit of a taxpayer at the time a demand is served, or is deposited to the credit of a taxpayer after a demand is served is money for which the savings institution is indebted to the taxpayer within the meaning of this section, but does not include money on deposit or deposited to the credit of a taxpayer in the taxpayer's capacity as a trustee.

Subsection 57(6) provides that the demand remains in effect until the debt is either paid or 90 days after it is served (whichever is earlier).

Subsection 57(7) provides that despite subsection 57(6), if a demand is made in respect of a periodic payment referred to in subsection 57(4), the demand remains in effect until it is satisfied unless no periodic payment is made or is liable to be made within 90 days after the demand in served, in which case the demand ceases to have effect at the end of that period.

Subsection 57(7.1) provides that money demanded from a person by the director under this section becomes payable:

a) as soon as the person is served with the demand, if the person is indebted or liable to make a payment to the taxpayer at the time the demand is served, or

b) as soon as the person becomes indebted or liable to make a payment to the taxpayer, in any other case.

Subsection 57(8) provides that a person who fails to comply with a demand under subsection 57(2) or subsection 57(4) is liable to pay to the government an amount equal to the amount that person was required to pay under subsection 57(2) or subsection 57(4).

Subsection 57(9) provides that a person who fails to comply with a demand under subsection 57(3) is liable to pay to the government an amount equal to the lesser of:

a) the aggregate of the money advanced or paid, and

b) the amount that the person was required to pay under subsection 57(3).

Subsection 57(10) provides that the receipt of the director for money paid under this section is a sufficient discharge of the original liability to the extent of the payment.

Subsection 57(11) provides that money paid by any person to the government in compliance with a demand under this section is deemed to have been paid by that person to the taxpayer.

Section 57.1 – Lien

MFT - SEC.57.1/Int.

References:

Act: Section 1 “person”, “security”, “tax”; Section 42; Section 50; Section 57.2; Section 62

Interpretation (Issued: 2009/04; Revised: 2017/05)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 modified the definition of "associated corporation" in subsection 57.1(1) to make reference to associated corporations within the meaning of section 256 of the Income Tax Act (Canada). This amendment helps determine whether two corporations are associated in a situation where the director has not gone through the process of requesting documentation under subsection 57.1(11).

Subsection 57.1(4) is amended to allow the director to impose a lien as a result of amounts owing to government, other than taxes and security, that are not remitted as required under the Act, such as amounts collected as if they were tax and amounts received as if they were security. Subsection 57.1(11) is also amended to provide consistency with similar provisions of other taxation Acts.

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 made several amendments to section 57.1. The amendment adds a definition for "amount owing" to clarify that the lien established under the section applies to all amounts owing under the Act, including amounts owing for interest on penalties.

Through new subsection (8.1), the amendment also allows the director to revise the amount of a lien registered against personal property. As a result, the director can revise the amount owing so that the correct amount is collected.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added section 57.1 as a consequential amendment to the Act. This section replaced the previous lien provision (subsection 35.1(3)) repealed by 2008-40-117 and clarified the rules relating to liens for tax not collected or remitted or tax and security not paid. This provision is consistent with the Carbon Tax Act.

There are 2 classes of liens:

  1. Taxes not collected or remitted and security not paid.
  2. Taxes not paid.

This distinction is made because taxes not collected or remitted, and security not paid, are considered to be “funds held in trust” on behalf of the government. Under subsection 57.1(5), the first class of liens has a 6 month super priority over most other security interests or liens, except specific types of security interests. The priority of the second class of liens is determined by the date of registration of the lien.

Section 57.2 – Responsibility Of Person Having Control Of Property

MFT - SEC.57.2 /Int.

References:

Act: Section 1 “person”, “security”, “tax”; Section 57.1

Interpretation (Issued: 2009/04; Revised: 2017/09)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 amended subsections 57.2(2) and (6) to clarify that subsections 57.2(2) and (6) apply to a person who, as assignee, liquidator, administrator or similar person, takes control or possession of the property of a person who is required to remit an amount other than tax or security, such as amounts collected as if they were tax and amounts received as if they were security.

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 repealed and replaced section 57.2. The section establishes a special rule for persons who take control of the property (such as liquidators, receiver managers or trustees) of someone who has collected tax, someone who has collected an amount as if it were tax, someone who is required to collect or remit tax, or someone who is required to pay security. Under subsection 57.2(3), before distributing the proceeds from the realization of the property, the person must obtain a certificate from the director. Where the person does not obtain a certificate the person is personally liable for an amount equal to the amount required to be paid to obtain the certificate.

These rules do not apply to a trustee appointed under the Bankruptcy and Insolvency Act (Canada).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added section 57.2 as a consequential amendment to the Act. This section provides that a person who takes control of property of a person required to collect and remit tax or pay security is required to obtain a clearance certificate.

Section 58 – Notice Of Enforcement Proceedings

MFT - SEC.58/Int.

References:

Act: Section 1 “person”, “tax”

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 reworded the existing provision requiring the director to give notice to a taxpayer before undertaking collection actions. The amendment was made to all of the consumption tax acts to provide consistency among the acts and to reduce the confusion that existed under the previous wording for circumstances where notices were issued to the same taxpayer under two or more of the consumption tax acts.

Subsection 58(1) provides that before taking proceedings for the recovery of an amount owing under this Act, the director must give to the person who owes the amount notice of the director’s intention to enforce payment.

Subsection 58(2) provides that failure to give notice under subsection 58(1) does not affect the validity of proceedings taken for the recovery of an amount owing under this Act.

Section 59 – Limitation Period

MFT - SEC.59/Int.

References:

Act: Section 1 “assessment”

Interpretation (Issued: 2004/12; Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 repealed and replaced section 59. Section 59 sets out the limitation period for collection proceedings. The amendment is consequential to the enactment of the new Limitation Act. Providing the Motor Fuel Tax Act its own limitation period rules ensures the Limitation Act does not impact collection proceedings by government.

Effective February 18, 1998, Bill 6, Taxation Statutes Amendment Act, 2004 established a seven year limitation period for undertaking collection actions. The limitation period begins from the date of an assessment or reassessment. The change was made to ensure the government has seven years to collect from the day of the assessment or re-assessment.

Section 60 – Application For Injunction

MFT - SEC.60/Int.

References:

Act: Section 1 “fuel”, “heating oil”, “non-motor fuel oil”, “person”, “sell”

Interpretation (Issued: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 amended section 60. Previously, section 60 only allowed the director to apply for an injunction ordering a person to cease offering to sell fuel. The Act amended this section to allow the director to also apply for an injunction ordering a person to cease offering to sell heating oil and non-motor fuel oil.

Section 60 provides that the director may apply to the BC Supreme Court for an injunction ordering a person who sells or offers to sell fuel, heating oil or non-motor fuel oil in BC to cease selling or offering to sell fuel, heating oil or non-motor fuel oil until the person complies with this Act and the regulations and the person’s obligations under this Act are fulfilled.

Section 60.1 – Appointment Of Director

MFT - SEC.60.1/Int.

References:

Act: Section 1 “director”

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added section 60.1 as a consequential amendment to the Act. The provision was added to clarify that the minister may appoint a person as a director to administer the Act. This is consistent with other consumption tax statues.

Section 61 – Delegation

MFT - SEC.61/Int.

References:

Act: Section 1 “director”

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added subsection 61(3) as a consequential amendment to the Act. This new subsection clarifies that the director may delegate powers and duties with respect to IFTA commercial vehicles. This provides legislative authority for the current delegation to the Ministry of Transportation and Infrastructure regarding motor fuel user permits.

Subsection 61(1) sets out that the director may, in writing, delegate their powers, functions, or duties.

Subsection 61(2) provides that the delegation may be to a specific person or a class of persons.

Subsection 61(3) provides that the director may delegate their powers, functions or duties related to IFTA commercial vehicles to a government corporation or another ministry. The purpose of this provision is to delegate duties related to motor fuel user permits and the collection of deposits to the Ministry of Transportation and Infrastructure, consistent with past practices under the Act.

Section 62 – Confidentiality

MFT - SEC.62/Int.-R.1

References:

Act: Section 1 “director”, “collector”; Section 57.1; Section 64

Interpretation (Issued: 2015/04)

Effective June 3, 2010, Bill 20, Miscellaneous Statutes Amendment Act (No. 3), 2010 added subsection 62(2), which establishes that the prohibition under section 62 (consequentially renumbered as subsection 62(1)) does not apply in respect of the names and addresses of collectors.

Subsection 62(1) provides that a person who has custody of or control over information or records under the Act must not disclose the information or records to any other person except as follows:

  • To administer or enforce this or another taxation Act,
  • In court proceedings relating to this or another taxation Act,
  • In accordance with provisions of the Family Law Act or Family Maintenance Enforcement Act related to family support payments,
  • Under an agreement with another government related to the administration or enforcement of tax enactments which provides for the disclosure or exchange of information and records, or
  • For the purpose of compiling statistical information by the government or the federal government.

Subsection 62(2) provides that despite subsection 62(1), the director may publish the names and addresses of collectors.

This confidentiality provision is consistent with the confidentiality provisions in other provincial consumption statutes.

R.1 Access to Branch Information and Records Under FIPPA (Revised: 2015/04)

On October 4, 1995, the Freedom of Information and Protection of Privacy Act (FOIPPA) was amended to allow the provisions of FOIPPA to prevail over the provisions of any other act where there are any inconsistencies or conflicts. Consequently, the confidentiality provisions of the Motor Fuel Tax Act (the Act) do not have precedence over the provisions of FOIPPA where there is an inconsistency between the Act and FOIPPA.

Section 62 of the Act addresses the manner in which the Ministry deals with requests from persons seeking information or records about another taxpayer. Because FOIPPA also deals with requests for information, these requests must be individually evaluated to determine the appropriate application of the exceptions to disclosure established in FOIPPA.

In addition, FOIPPA establishes that employees have a duty to assist applicants. Therefore, where a person requests records about another taxpayer, or requests information of a type that is contained in branch records, the staff member should advise the enquirer that the staff member cannot provide such information or records, but that a FOIPPA request can be made for the records. The provisions of FOIPPA will apply whether or not the records are released. Requests are to be made in writing and should be directed to the Program Services section of the Consumer Taxation Programs Branch.

Section 63 – Service Of Notices

MFT - SEC.63/Int.

References:

Act: Section 1 “director”

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 63 as a consequential amendment to the Act. This section is amended to clarify the service of notices and documents. This provision is consistent with the Carbon Tax Act.

Subsection 63(1) provides when a notice or other document is deemed to have been served on a person. This subsection sets out that a notice or document which the director is required or authorized to serve is conclusively deemed to be served if

  • Served on the person;
  • Sent by registered mail to the last known address; or
  • Sent by electronic mail or fax to the last known electronic mail address or fax number of the person according to the records of the director.

Subsection 63(2) deems a notice or document to be served on the minister if it is delivered to the office of the deputy minister.

Subsection 63(3) deems service of a document by registered mail, electronic mail or fax to have been made when sent.

Subsection 63(4) deems a business to be served by personal service if the notice or document is left with an adult employed at the business.

Subsection 63(5) deems a partnership to be served by personal service if the notice or document is served on one of the partners or is left with an adult employed at the partnership.

Subsection 63(6) deems a corporation to be served by personal service if the notice or document is left with any board member, senior officer, liquidator or receiver manager of the corporation.

In the case of an extra-provincial corporation, a notice or document is deemed to be validly served if left with any person of a type mentioned above of the extra-provincial corporation or an attorney of the extra-provincial corporation.

Subsection 63(7) provides that showing a notice or document has been served under this section is proof that the notice or document was received and the burden of proof is on the person trying to prove that a notice or document was not received.

Subsection 63(8) provides that, during a prosecution, the director's compliance can be proved by an affidavit of the director.

Section 63.1 – Demand For Information

MFT - SEC.63.1/Int.

References:

Act: Section 1 “director”

Interpretation (Issued: 2000/06; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 63.1 as a consequential amendment to the Act. Section 63.1 is amended to remove references to "an authorized person" to ensure that the general delegation provisions work as intended.

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 amended the Act to provide statutory authority for the province to issue a formal demand for information required to administer and enforce the Act.

The previous provisions allowed administrators to request information, but provided no recourse where a taxpayer refused to do so. The amendment enabled the province to issue a formal demand for information to verify a person's compliance under the legislation and to confirm relevant information on assets subject to the statutory liens.

For example, where collection action is being considered, information confirming the whereabouts and value of assets subject to statutory liens may be required. Where tax is being assessed on a boat or aircraft transfer, the authority to demand the bill of sale will ensure the assessment accurately reflects the transaction and diminishes the need for future reassessments.

Subsection 63.1(1) is a standard provision in provincial tax statutes and establishes that the director may require any person to provide a return, information or additional information, records, or a written statement.

Subsection 63.1(2) sets out how a demand for information may be served on a person and that the director may require a written statement to be an affidavit or statutory declaration.

Subsection 63.1(3) establishes that a person must comply with a demand for information notice within the time specified in the notice.

Subsection 63.1(4) provides that an affidavit by the director that states facts necessary to establish compliance by the director with section 63.1 or default by the person the demand was made to must be admitted as evidence and, in the absence of evidence to the contrary, is proof of the facts stated in the affidavit.

Section 63.2 – Conversion Of Measurement

MFT - SEC.63.2/Int.

References:

Act: Section 1 “litre”, “standard reference conditions”

Conversion Factors for Fuel

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added section 63.2 as a consequential amendment to the Act. This section permits the director to establish formulas for converting a measure of an amount of fuel into a different measurement.

For example, the tax rate for propane is in litres but propane is also commonly sold in pounds, cubic metres as well as litres. The director's formulas determine how a seller of propane should calculate the tax payable when they sell in units other than litres.

Section 64 – Offences

MFT - SEC.64/Int.

References:

Act: Section 1 “security”, “tax”; Section 5.1; Section 62

Interpretation (Issued: 2000/12; Revised: 2016/01)

This section provides for penalties for contravention of the legislation. The circumstances for imposing the penalties includes destroying records, making false statements, making deceptive entries in records of account, and acquiescing to such actions to avoid payment of taxes.

Effective July 1, 2015, Bill 10, Budget Measures Implementation Act, 2015 added paragraph 64(4)(a.1) to make it an offence to make a false or deceptive statement with respect to the declaration required under section 5.1 [tax on coloured fuel if declaration not obtained]. This amendment is consequential to the addition of section 5.1.

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 added subsection 64(7). The new subsection confirms that the offence penalties are in addition to any other penalty under the Act.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 64 as a consequential amendment to the Act. The amendment clarifies that offenses apply to contraventions related to both tax and security.

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 amended the Act to parallel the amendments being made to the other consumption tax statutes that are aimed at rationalizing the offence and prosecution provisions of the legislation. Under the previous provisions, any infraction, regardless of how minor or unintentional, was deemed to be a prosecutable offence and subject to court imposed fines and terms of imprisonment. The province did not prosecute for minor and unintentional infractions of the legislation. Including these minor offences provided little guidance to assist the court in determining the seriousness of an offence. The courts were therefore hesitant to impose the higher penalties for serious infractions.

The amendment addresses this problem by repealing subsections 64(1) and 64(2), which make minor unintentional infractions and offence subject to court prosecution. Such infractions will continue to be subject to administrative compliance measures, such as assessments of tax liabilities. Consequently, subsection 64(4), which lists offences for willful failure to comply with the Act or to avoid tax, is amended to include refusal to cooperate with an audit inspection under the Act. This amendment clarifies for taxpayers and the courts which infractions are considered by the province to be sufficiently serious to warrant court action.

Effective April 1, 1999, Bill 52, Taxation Statutes Amendment Act, 1999, amended section 64 as a consequence of the establishment of section 13.1, which dedicated a portion of the tax on clear fuels to provide funding for the British Columbia Ferry Corporation. The amendment established that contravention of section 13.1 of the Motor Fuel Tax Act (repealed, effective April 1, 2003) was an offence and, on conviction of the offence by a court, was subject to statutory penalties imposed under the Act. (This provision was repealed effective April 1, 2000, with the repeal of subsections 64(1) and 64(2) – see above).

Subsection 64(3) establishes that a person who breaches the confidentiality provisions in section 62 [confidentiality] commits an offence, and is liable to pay a fine up to $2,000.

Subsection 64(4) lists all of the behaviours which constitute an offence under the Act. The offences under the Act are consistent with the offences under the other consumption tax statutes.

Subsection 64(5) imposes the following penalties for committing an offence listed under subsection 64(4):

  • A fine up to $10,000, imprisonment for up to 2 years or both, plus
  • A fine equal to the tax or security not collected, remitted or paid as required.

Subsection 64(6) provides that, during a prosecution of an offence under subsection 64(4), a director’s certificate stating the amount of tax or security not collected, paid or remitted is evidence of the amount of tax or security not collected, paid or remitted.

Section 65 – Onus Of Proof

MFT - SEC.65/Int.

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 65 as a consequential amendment to the Act. The amendment updates wording consistent with other amendments. This section provides that the burden of proof in a prosecution that an amount was collected, paid, or remitted as required, is on the accused.

Section 66 – Analyst And Certificate Of Analysis

MFT - SEC.65/Int.

References:

Act: Section 1 “analyst”, “director”

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 66(1) as a consequential amendment to the Act. The amendment clarifies that the director may designate an analyst consistent with the director’s power to administer the Act. The provision is consistent with the Carbon Tax Act.

This section provides that in a prosecution of an offence, an analyst may be asked to give evidence about a substance submitted for analysis such as verification of a type or mixture of fuel. The analyst’s evidence can be by way of an analyst certificate in which they certify the result of their analysis. With leave of the court, the analyst may be cross-examined on their evidence, and the government cannot use an analyst’s certificate as evidence unless reasonable notice of the intention to use the certificate as evidence is provided to the other party.

Subsection 66(1) authorizes the director to designate a person as an analyst.

Subsection 66(2) establishes that a certificate of an analyst stating that the analyst has examined or analyzed a substance may be used as evidence.

Subsection 66(3) establishes that, with leave of the court, the analyst may be cross-examined on their evidence.

Subsection 66(4) establishes that a certificate may not be used as evidence unless reasonable notice of the intention to use the certificate as evidence has been provided to the other party.

Section 67 – Evidence

MFT - SEC.67/Int.

References:

Act: Section 1 “collector”, “registered consumer certificate”

Interpretation (Issued: 2009/04; Revised 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended subsection 67(1) for clarity. In a prosecution, evidence that a person applied to be appointed as a collector, or applied to obtain a registered consumer certificate is evidence that the person is appointed as a collector or holds a registered consumer certificate.

Subsection 67(1) establishes that, in a prosecution, evidence that a person applied for appointment as a collector, or applied for a registered consumer certificate, is evidence that the person is appointed as a collector, or holds a registered consumer certificate.

Subsection 67(2) establishes that, in a prosecution, a notice of assessment is evidence that the amount indicated in the notice of assessment is due and owing to the government.

Section 68 – Offence By Corporation

MFT - SEC.68/Int.

References:

Act: Section 1 “board member”

Interpretation (Issued: 2009/04; Revised 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended section 68 as a consequential amendment to the Act. The amendment clarifies when a board member or other corporate officer commits and offence. This is a standard provision in provincial statues and is consistent with the Carbon Tax Act.

This section provides that if an employee, officer, board member or agent of a corporation authorizes, permits or acquiesces to a corporation’s offence, they also commit that offence and may be prosecuted for their offence whether or not the corporation is prosecuted or convicted.

Section 69 – Time Limit On Prosecution

MFT - SEC.69/Int.

Interpretation (Issued: 2015/04)

Since its inception on December 31, 1985 (Bill 63 – Motor Fuel Tax Act, 1985), the Act has provided a provision regarding a time limit on prosecutions. Section 69 establishes a prosecution for an offence under the Act or the regulations may not be instituted more than 6 years after the day the alleged offence was committed.

Section 70 – Section 5 Of The Offence Act

MFT - SEC.70/Int.

Interpretation (Issued: 2015/04)

Since its inception on December 31, 1985 (Bill 63 – Motor Fuel Tax Act, 1985), the Act has provided a provision regarding the application of the Offence Act. Section 70 establishes that section 5 of the Offence Act does not apply to this Act or the regulations. Section 5 of the Offence Act is a general offence provision which provides that any contravention of a statute or regulation is an offence under the Offence Act. As a result, only contraventions of the Act or its regulations that are identified as offences may be prosecuted as offences.

Section 71 – Power To Make Regulations

MFT - SEC.71(2)(a)/Int.

(2)(a) Records To Be Kept

References:

Act: Section 1.1

Interpretation (Issued: 2009/04; Revised: 2014/08, 2015/04)

Effective May 1, 2012, Bill 21, Budget Measures Implementation Act, 2012, repealed and replaced paragraph 71(2)(a). The new subsection now refers also to "persons who sell fuel in sales to which section 1.1 (2)(a) to (c) applies".

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended paragraph 71(2)(a) as a consequential amendment to the Act. The amendment authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prescribing records required to be kept by collectors, deputy collectors, vendors, persons required to file returns for payment of tax under the Act, wholesale dealers, retail dealers, registered consumers, licensed carriers and holders of motive fuel user permits.

MFT - SEC.71(2)(b) - (b.4)/Int.

(2)(b) - (b.4) Information, Tax Payable And Duties

References:

Act: Section 1.1

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective May 1, 2012, Bill 21, Budget Measures Implementation Act, 2012 added paragraphs 71(2)(b.3) and 71(2)(b.4).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended paragraphs 71(2)(b) and added 71(2)(b.1) and 71(2)(b.2) as a consequential amendment to the Act.

Paragraph71(2)(b) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act requiring a person who sells fuel to furnish prescribed information to the person who buys the fuel in prescribed circumstances.

Paragraph 71(2)(b.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act establishing an amount of tax payable or a method for determining the amount of tax payable for a blend or mixture containing a fuel.

Paragraph 71(2)(b.2) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting the duties of vendors, wholesale dealers, retail dealers, collectors, deputy collectors, registered consumers and persons who are required to file returns for the payment of tax under this act.

Paragraph 71(2)(b.3) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act setting conditions or limitations on the application of paragraphs (a) to (c) of section 1.1(2) [fuel imported by ship].

Paragraph 71(2)(b.4) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting the minimum amount prescribed for a prescribed type of fuel, a prescribed subcategory of a type of fuel or a prescribed class of fuel for the purposes of clause (a)(ii) of section 1.1(3) [fuel imported by ship].

MFT - SEC.71(2)(c) - (c.1)/Int.

(2)(c) - (2)(c.1) Payment, Collection Remittance And Allowances

References:

Act: Section 36

MFTR: Section 3

Interpretation (Revised: 2015/04; Revised: 2021/02)

Effective February 20, 2015, Bill 5, Budget Measures Implementation Act, 2019 amended subsection 71(2)  by adding paragraph 71(2)(c.01). 

Subsection 71(2)(c.01) authorizes the Lieutenant Governor in Council to make regulations for the purposes of setting conditions of, or limitations on, the deduction of a prescribed allowance by the collectors from the security payable (section 36 of the MFTA).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended paragraphs 71(2)(c) and (2)(c.1) as a consequential amendment to the Act.

Effective March 16, 2001, Bill 4, Budget Measures Implementation Act, 2001 amended paragraph71 (2)(c) and added paragraph 71(2)(c.1).

Effective June 30, 1995, Bill 33, Finance and Corporate Relations Statutes Amendment Act, 1995 amended paragraph 71(2)(c) consequential to establishing a system of security payments under sections 38 to 40 of the Act. It authorized making regulations to prescribe the method, conditions or requirements for collecting and remitting security payments or tax, and to prescribe different methods, conditions and requirements for different classes of persons.

Effective July 29, 1993, Bill 80, Miscellaneous Statutes Amendment Act (No. 2), 1993 added paragraph 71(2)(c) to clarify that the Lieutenant Governor in Council may make regulations specifying different remittance requirements for different classes of collectors.

Paragraph 71(2)(c) authorizes the Lieutenant Governor in Council to make regulations respecting the manner of payment, collection and remittance of tax and payment of security and any other conditions or requirements affecting the payment, collection and remittance of tax or security.

Paragraph 71(2)(c.1) authorizes the Lieutenant Governor in Council to make regulations respecting the payment of an allowance under section 40.1 [change in tax rate and payment of security], including, without limitation, the following:

i. Determining the amount of an allowance;

ii. Determining the circumstances in which an allowance or portion of an allowance is not to be paid;

iii. Establishing a manner of payment of an allowance.

MFT - SEC.71(2)(d)/Int.

(2)(d) Permits

Interpretation (Issued: 2009/04; Revised 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended paragraph 71(2)(d) as a consequential amendment to the Act.

Paragraph 71(2)(d) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act establishing a system of permits for retail dealers, wholesale dealers and vendors who sell a fuel on which tax is not payable under the Act. For the purpose of establishing a system of permits, paragraph 71(2)(d) also authorizes the Lieutenant and Governor in Council without limitation to:

  • Prohibit these dealers and vendors from acquiring and selling the fuel on which tax is not payable under the Act in BC unless authorized by a permit;
  • Prohibit persons from selling the fuel on which tax is not payable under the Act to these dealers and vendors unless the dealer or vendor is authorized to sell that fuel by a permit;
  • Provide for the issue, refusal to issue, suspension and cancellation of the permits by the director; and
  • Provide for appeals from a decision related to a permit.

MFT - SEC.71(2)(e)/Int.

(2)(e) Licences, Permits, Emblems And Decals

Interpretation (Revised: 2009/04; 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 repealed paragraph 71(2)(e)(i) as a consequential amendment to the Act.

Effective February 20, 2008, Bill 2, Budget Measures Implementation Act, 2008 repealed paragraph 71(2)(e)(iii) to remove family farm truck emblems. The family farm truck emblem program is eliminated.

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act (No. 2), 1995, amended paragraph 71(2)(e) to provide regulation making authority to prescribe matters pertaining to issuance, refusal to issue, suspension and cancellation by the director of carrier licences and carrier decals. This was consequential to the licencing requirements of the International Fuel Tax Agreement (IFTA). This amendment was made effective by B.C. Reg. 550/95 on January 1, 1996, the date that BC became a member of IFTA.

Paragraph 71(2)(e) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act providing for the issue, refusal to issue, suspension and cancellation by the director of:

ii. Motive fuel user permits, motive fuel decals and temporary motive fuel user emblems; and

iv. Carrier licences and carrier decals.

Clauses (i) and (iii) have been repealed.

MFT - SEC.71(2)(f.1)/Int.

(2)(f.1) Duties

Interpretation (Revised: 2011/03, 2015/04)

Effective July 1, 2008 (retroactive from October 29, 2009), Bill 2, Budget Measures Implementation Act (No. 2), 2009 repealed paragraph 71(2)(f).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008, amended paragraph 71(2)(f) and added paragraph 71(2)(f.1) as a consequential amendment to the Act. Section 71(2)(f) provided regulation making authority respecting the duties of holders of farm truck emblems.

Effective February 20, 2008, Bill 2, Budget Measures Implementation Act, 2008, amends paragraph 71(2)(f) to remove the reference to family farm truck emblems.

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act (No. 2), 1995, amended paragraph71(2)(f) to provide regulation making authority to prescribe also the duties of licensed carriers. This amendment was consequential to BC joining the International Fuel Tax Agreement (IFTA). This amendment was made effective by B.C. Reg. 550/95 on January 1, 1996, the date that BC became a member of IFTA.

Paragraph71(2)(f.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting the duties of persons who own or operate IFTA commercial vehicles, including:

i. The payment and refund of deposits; and

ii. Authorizing the director to determine the amount of deposits.

MFT - SEC.71(2)(g) -(h)/Int.

(2)(g) - (h) Refunds

References:

Act: Section 25

MFTR: Section 52

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013, added paragraph 71(2)(g.1).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amends paragraph 71(2)(g) and repeals paragraph 71(2)(h) as a consequential amendment to the Act.

Paragraph 71(2)(g) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act providing for refunds of all or part of tax, security or other amount paid or remitted under the Act, including:

i. Permitting or requiring the payment of a refund to a person or class of persons;

ii. Establishing circumstances in which a refund may or must be paid; or

iii. Setting conditions or limits on the payment of a refund.

Paragraph 71(2)(g.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting applications for a refund under section 25 [claim for refund].

MFT - SEC.71(2)(i) -(i.1)/Int.-R.3

 (2)(i) - (i.1) Providing For Exemptions

References:

MFTR: Section 52

Interpretation (Issued: 2009/04; Revised 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended paragraph 71(2)(i) as a consequential amendment to the Act.

Paragraph 71(2)(i) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act providing for exemptions from one or more provisions of this Act, including:

  • Providing for a full or partial exemption from the payment, collection or remittance of tax or security;
  • Establishing the circumstances in which an exemption applies; or
  • Setting conditions of or limitations on the application of an exemption.

Paragraph 71(2)(i.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act authorizing exemptions and refunds under section 5(3) [tax on coloured fuel] and respecting any matter or thing that the Lieutenant Governor in Council considers necessary for the implementation and administration of those exemptions and refunds.

R.1 International Pacific Salmon Fisheries Commission

Order-in-Council #1235, dated July 13, 1984, provides for a remission of fuel tax paid by International Pacific Salmon Fisheries Commission. The authority for this remission is Section 19 of the Financial Administration Act.

R.2 Members of the Diplomatic and Consular Corps (Revised: 2015/04)

References: Financial Administration Act, Section 19, Bulletin CTB 007

Prior to April 1, 1986, members of the diplomatic and consular corps were eligible for a refund of tax paid on purchases of fuel for motor vehicles for their exclusive use.

Effective April 1, 1986, the refund provision was replaced with a point of sale exemption. Persons eligible for exemption included:

  • Career consular officers of a post situated in BC, or with authority in BC, who are citizens of the country operating the consular post;
  • Diplomatic agents of a diplomatic mission situated in Canada who are citizens of the country operating the diplomatic mission;
  • United Nations officials who have been accorded diplomatic privileges by External Affairs Canada under the Diplomatic and Consular Privileges and Immunities Act (Canada) provided they are not landed immigrants or Canadian citizens;
  • Members of the administrative and support staff of a consular post situated in BC who are citizens of the country operating the consular post; and
  • Spouses of persons referred to above if the spouses are not Canadian citizens or landed immigrants.

A person’s eligibility for exemption was determined at the time Foreign Affairs Canada issued the person’s diplomatic or consular corps identity card. Persons who qualify for a point of sale exemption in BC had authorization for such exemption indicated on the reverse of their cards.

Consular posts were instructed to apply to an oil company for credit cards issued in the name of each of their members who qualify for exemption. A list of the names and diplomatic identity card numbers of all persons eligible for exemption were submitted to the oil company, who omitted the tax from all billings to the persons’ accounts. Cash payments of fuel purchases and payments on general credit cards were not eligible for a point of sale exemption. As explained in Bulletin CTB 007, an eligible consular member who pays MFT at the point of sale may be able to apply to the ministry for a refund.

R.3 Members of the Commonwealth of Learning Agency (Revised: 2015/04)

Reference: Financial Administration Act, Section 19, Order in Council 2169 (December 2, 1988)

Effective December 2, 1988, specific persons who are members of the Commonwealth of Learning Agency and certain other persons are eligible for an exemption from tax due under the Motor Fuel Tax Act.

Eligible for this exemption are:

  • The Commonwealth of Learning Agency;
  • The president of the Commonwealth of Learning Agency;
  • The vice-president of the Commonwealth of Learning Agency;
  • The spouse of the president or the vice-president; and
  • A child, under the age of 19 years, of the president or vice-president.

This exemption does not apply to any individual who is a Canadian citizen or permanent resident of Canada.

In addition, the president of the Commonwealth of Learning Agency has been issued a green diplomatic identity card by the federal government. The card entitles the president to the same exemption from fuel tax available to other diplomats.

MFT - SEC.71(2)(j)/Int.

(2)(j) Different Tax For Different Classes Of People

REPEALED

Interpretation (Revised: 2009/04, 2015/04)

Effective August 1, 2001, Bill 2, Taxation Statutes Amendment Act, 2001 repealed

Paragraph 71(2)(j) .

Effective March 23, 1994, Bill 19, Taxation Statutes Amendment Act, 1994, added paragraph 71(2)(j) to provide the Lieutenant Governor in Council with the power to set, by regulation, different rates of tax for different classes of persons. This is consequential to the amendments made by the same bill in subsection 7(1).

This amendment enabled the province to reduce, by regulation, the tax rate on jet fuel in specific circumstances, in July of 1994.

MFT - SEC.71(2)(k)/Int.

(2)(k) Exemptions For Different Classes Of People

Interpretation (Issued: 2015/04)

Paragraph 71(2)(k) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act exempting any person or class of person from section 16 [permit or licence required to bring fuel into British Columbia] and prescribing the conditions of exemption.

MFT - SEC.71(2)(k.1)/Int.

(2)(k.1) Motor Vehicles Eligible To Use Coloured Fuel

References:

Act: Section 15

MFTR: Section 52

Interpretation (Issued: 2000/03; Revised 2015/04)

Effective March 31, 1999, Bill 52, Taxation Statutes Amendment Act, 1999 added paragraph 71(2)(k.1) to clarify the authority to prescribe by regulation the motor vehicles used by the logging and mining industry that are authorized to use lower-taxed coloured fuel when operating off-highway.

Paragraph 71(2)(k.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prescribing types of motor vehicles for the purposes of paragraphs (d) and (e) of subsection 15(1) [prohibition against unauthorized purchase or use of coloured fuel], based on the make, description or use of those vehicles or any combination of those things.

The previous provisions provided authority to prescribe qualifying motor vehicles by the type of motor vehicle. Many different types of motor vehicles were used for the authorized purposes. Paragraph 71(2)(k.1) clarifies that the type of motor vehicle eligible to use coloured fuel may be prescribed based on the type of the vehicle, a description of the use of the vehicle, or a combination of these features.

This amendment did not introduce any change to the vehicles authorized to use coloured fuels pursuant to subsection 15(1) of the Act.

MFT - SEC. 71(2)(l)/Int.

(2)(l) RATE THAT DOES NOT APPLY TO CERTAIN FUEL

References:

Act: Section 4; Section 5; Section 7; Section 8; Section 10; Section 15

MFTR: Section 52

Interpretation (Issued: 2015/04)

Paragraph 71(2)(l) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act providing that fuel that:

i. is used in prescribed circumstances for a purpose for which coloured fuel is authorized to be used under subsection 15(1) [prohibition against unauthorized purchase or use of coloured fuel]; and

ii. would otherwise be taxable under section 4 [tax on gasoline], section 7 [tax on jet fuel], section 8 [tax on aviation fuel] or section 10 [tax on motive fuel]

must be taxed at the rate imposed under section 5 [tax on coloured fuel].

MFT - SEC. 71(2)(l.1)/Int.

References:

Act: Section 1 "coloured fuel", "director"; Section 45.3

MFTR: Section 15.51

Interpretation (Issued: 2016/01)

Effective July 1, 2015, Bill 10 Budget Measures Implementation Act, 2015 added paragraph 71(2)(l.1).

Paragraph 71(2)(l.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting the determination of the amount of the fixed monetary penalty that may be imposed by the director on a person who the director is satisfied has purchased or used coloured fuel for an unauthorized purpose, including providing for greater amounts for second or subsequent offences for the purposes of section 45.3 [penalty for unauthorized purchase or use of coloured fuel].

MFT - SEC. 71 (2)(m) - (2)(o.4)/Int.

(2)(m)-(2)(o.4) Coloured Fuel/Alternative Motor Fuel

References:

Act: Section 10.1

Interpretation (Issued: 2000/07; Revised: 2015/04)

Since the introduction of the Motor Fuel Tax Act in 1985, the Act has provided powers to make regulations that require reports from persons authorized to colour fuel or sell coloured fuel and require the marking of equipment or containers used for coloured fuel.

Effective April 1, 2013, Bill 2, 2013 Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 amended paragraph 71(2)(o) by removing references to sections 14 and 14.1.

Effective September 2, 2009 (retroactive from October 29, 2009), Bill 2, Budget Measures Implementation Act (No. 2), 2009 amended paragraph 71(2)(o.1) to give the Lieutenant Governor in Council the additional power to exclude alternative motor fuels. Previously, the provision only empowered the Lieutenant Governor in Council to define alternative motor fuels.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 repealed paragraph 71(2)(o.3) and paragraph71(2)(o.4) as a consequential amendment to the Act.

Effective October 27, 2005, Bill 42, Provincial Revenue Statutes Amendment Act (No. 2), 2003 amended paragraph 71(2)(m) to provide regulatory authority to prescribe the types of dye for colouring fuel, the equipment to be used to colour fuel, the procedures for colouring fuel, and the place at which fuel may be coloured.

Effective September 15, 2004, Bill 42, Provincial Revenue Statutes Amendment Act (No. 2), 2003 amended paragraph 71(2)(o) to provide regulatory making authority to require reports to be made by persons authorized under section 14 to colour fuel or under aection 14.1 to sell coloured fuel and requiring the marking of equipment or containers used for coloured fuel.

Effective February 19, 2003, Bill 6, Budget Measures Implementation Act, 2003 added paragraph 71(2)(o.4) to provide regulatory making authority to prescribe the circumstances in which fuel or class of fuel was exempt from tax.

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000 added paragraphs 71(2)(o.1) through 71 (2)(o.3) to provide authority to implement the new tax policy for alternative fuels by regulation (see MFTA/Sec. 10.1). This included prescribing fuels that qualify as alternative fuels, prescribing the rate of tax that will apply to different types of alternative fuels, and exempting alternative fuels from tax.

Paragraph71(2)(m) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act exempting prescribing the types of dye for colouring fuel, the equipment to be used to colour fuel, the procedures for colouring fuel, and the place at which fuel may be coloured.

Paragraph 71(2)(n) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prohibiting the sale of fuel as coloured fuel if the fuel is not coloured in the prescribed manner.

Paragraph 71(2)(o) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act requiring reports to be made by persons authorized under this Act to colour fuel or to sell coloured fuel or under section 14.1 to sell coloured fuel and requiring the marking of equipment or containers used for coloured fuel.

Paragraph 71(2)(o.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act defining or excluding alternative motor fuels by naming the fuel or by reference to environmental benefits, market share or other criteria set out in the regulations.

Paragraph 71(2)(o.2) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act subject to subsection 10.1(4), prescribing the rates of tax on alternative motor fuels which may be different for different types of fuels or different uses of fuels.

MFT - SEC. 71(2)(q)-(q.2)/Int.

(2)(q)-(q.2) Suspension Of Authorization To Colour Fuel

References:

Act: Section 14; Section 14.1; Section 16

MFTR: Section 52

Interpretation (Revised: 2009/04, 2014/08, 2015/04)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 repealed paragraph 71(2)(q) and replaced it with a new paragraph. In addition, paragraphs 71(2)(q.1) and 71(2)(q.2) were added.

Effective September 15, 2004, Bill 42, Provincial Revenue Statutes Amendment Act (No. 2), 2003 amended this subsection to provide regulatory making power prescribing the periods for which an authorization to colour fuel and sell colour fuel may be suspended by the director.

Effective July 30, 1993, Bill 18, Motor Fuel Tax Amendment Act, 1993 added paragraph 71(2)(q), providing the Lieutenant Governor in Council with the power to prescribe, by regulation, the period for which an authorization to colour fuel may be suspended by the director.

Paragraph 71(2)(q) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prescribing the periods for which an authorization under section 14 [authority to colour fuel], section 14.1 [authority to sell coloured fuel] or subsection 16.3(3) [authority to sell coloured heating oil and coloured non-motor fuel oil] may be suspended by the director under:

  • Section 14(4), or
  • Section 14(4) as it applies under Section 14.1(4) or Section 16.3(6);

Paragraph 71(2)(q.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act in relation to heating oil or non-motor fuel oil, respecting anything for which regulations may be made under this act in relation to fuel.

Paragraph 71(2)(q.2) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting provisions of the Act or the regulations made applicable by section 16.8, without limitation, doing one or more of the following:

  • providing that, in applying a provision, in addition to any necessary changes, that provision is to be read with specified changes;
  • specifying circumstances in which a provision applies;
  • setting conditions of, or limitations on, the application of a provision;
  • exempting a provision that would otherwise apply, entirely or in specified circumstances.

MFT - SEC. 71(2)(r)-(2)(w)/Int.

(2)(r)-(2)(w) IFTA

References:

Act: Section 1 “International Fuel Tax Agreement”; Section 16; Section 19

Interpretation (Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 amended paragraph 71(2)(w) as a consequential amendment to the Act. This paragraph provides the authority to make regulations respecting fees for applying for, issuing and renewing carrier licences issued by the director, including setting fees and the time and manner for payment of fees.

Effective January 1, 1996, Bill 24, Miscellaneous Statutes Amendment Act (No. 2), 1995 added paragraphs 71(2)(r)-(w) to provide authority to make regulations regarding matters pertaining to the International Fuel Tax Agreement (IFTA) and to licensed carriers. This amendment was consequential to BC joining IFTA. This amendment was made effective by BC Reg 550/95 on January 1, 1996, the date that BC became a member of IFTA.

Paragraph 71(2)(r) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting any matter or thing that the Lieutenant Governor in Council considers necessary for the implementation or administration IFTA.

Paragraph 71(2)(s) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prescribing one or more classes of carriers or classes of vehicles for the purposes of subsection 16(3) [permit or licence required to bring fuel into British Columbia], subject to the terms and conditions the Lieutenant Governor in Council specifies.

Paragraph 71(2)(t) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prescribing the form of the licence application referred to in section 19 [issue of licences and decals to carriers] including, without limitation, the terms and conditions of the licence that an applicant, by submitting the application, agrees to comply with and to be bound by.

Paragraph 71(2)(u) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prescribing:

i. The duties and obligations to be performed by a licensed carrier,

ii. The terms and conditions applicable to a carrier licence, with power to prescribe different terms and conditions for different classes of licensees,

iii. The consequences of failing to perform those duties and obligations or of failing to comply with those terms and conditions, and

iv. Any other matter that the Lieutenant Governor in Council considers necessary or appropriate in relation to the issuing, renewing, suspending, cancelling or reinstating of carrier licences.

Paragraph 71(2)(v) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prescribing the duration of carrier licences and carrier decals issued by the director.

Paragraph 71(2)(w) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting fees for applying for, issuing and renewing carrier licences issued by the director, including setting fees and the time and manner for payment of fees.

MFT - SEC. 71 (2)(w.1)/Int.

 (2)(w.1) Fees

References:

Act: Section 49.1; Section 57.2

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added paragraph 71(2)(w.1) as a consequential amendment to the Act.

Paragraph 71(2)(w.1) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting the fees for certificates under section 49.1 [certificate required for sales in bulk] and section 57.2 [responsibility of person having control of property], including setting the fees and the time and manner for payment of the fees.

MFT - SEC. 71(2)(x)/Int.

(2)(x) SCBCTSR and VRTSA

References:

Act: Section 4; Section 10; Section 12.1

Interpretation (Issued: 2015/04)

Effective March 31, 1999, Bill 36, Greater Vancouver Transportation Authority Act, 1998 added paragraph 71(2)(x) as a consequential amendment to the Act.

Paragraph 71(2)(x) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting any matter or thing that the Lieutenant Governor in Council considers necessary for or in relation to the payment to the South Coast British Columbia Transportation Authority or to the regional transit commission for the Victoria regional transit service area of the tax imposed under section 4 [tax on gasoline] and section 10 [tax on motive fuel] or section 12.1 [Victoria regional transit service area tax arrangements] respectively.

MFT - SEC. 71(2)(y)/Int.

(2)(y) Interest

Interpretation (Issued: 2000/09; Revised 2015/04)

Effective April 1, 2000, Bill 3, Budget Measures Implementation Act, 2000, added paragraph 71(2)(y).

Paragraph 71(2)(y) authorizes the Lieutenant and Governor in Council to make regulations referred to in section 41 of the Interpretation Act prescribing interest rates and the manner of calculating interest for the purposes of this act.

B.C. Reg. 262/2000 added MFTR section 5.2 to prescribe the method of calculating interest.

MFT - SEC. 71(2)(z)/Int.

(2)(z) – IFTA Commercial Vehicle

REPEALED

Interpretation (Issued: 2007/09; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 repealed paragraph 71(2)(z) as a consequential amendment to the Act.

Effective May 31, 2007, Bill 19, Small Business and Revenue Statutes Amendment Act, 2007 added paragraph 71(2)(z) to provide authority to make regulations defining "IFTA commercial vehicle" for the purposes of the Act.

MFT - SEC.71(2)(aa)-(2)(bb)/Int.

(2)(aa)-(2)(bb) Appeals And Collection Of Tax

References:

Act: Section 50

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008, adds paragraphs 71(2)(aa) and 71(2)(bb) as a consequential amendment to the Act.

Paragraph 71(2)(aa) authorizes the Lieutenant Governor in Council to make regulations referred to in section 41 of the Interpretation Act respecting appeals to the minister under section 50 [appeal to minister], including, without limitation, establishing circumstances in which an appeal to the minister under subsection 50(1.1) is not permitted.

Paragraph 71(2)(bb) authorizes the Lieutenant Governor in Council to make regulations referred to in section 41 of the Interpretation Act establishing circumstances in which a retail dealer is exempt from the requirement to collect tax and permitting the director to establish rules for the collection of tax in those circumstances.

MFT - SEC. 71(4)/Int.

(4) – Netting Of Interest

Interpretation (Issued: 2007/06; Revised 2015/04)

Effective May 18, 2006, Bill 19, Small Business and Revenue Statutes Amendment Act, 2007 added subsection 71(4). Although Bill 19 received royal assent on May 31, 2007, subsection 71(4) was brought into force retroactively, effective May 18, 2006, the date sections 5.3 and 5.4 of the regulations came into force. These sections, which have been repealed, allowed for the netting of interest on refunds against interest on audit assessments.

For the purposes of paragraph 71(2)(y), subsection 71(4) provides the authority for regulations that apply different rates of interest to all or part of an assessment if a person is also owed a refund under the Act.

MFT - SEC. 71(5)-(10)/Int.

(5)-(10)

References:

Act: Section 1.1; Section 36

MFTR: Section 3

Interpretation (Issued: 2009/04; Revised: 2015/04; Revised: 2021/02)

Effective February 20, 2015, Bill 5, Budget Measures Implementation Act, 2019 added subsection 71(10).

Subsection 71(10) provides that a regulation made on or before September 1, 2019 in relation to section 36 of the Act may be made retroactive to February 20, 2015 or a later date.

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added subsection 71(9).

Effective May 1, 2012, Bill 21, Budget Measures Implementation Act, 2012 added subsection 71(8).

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008 added subsection 71(5) and subsection 71(6) as a consequential amendment to the Act.

Subsection 71(5) provides regulation making authority respecting any matter for which regulations by the Lieutenant Governor in Council are contemplated by the Act.

Subsection 71(6) provides regulation making authority for the Lieutenant Governor in Council to do one or more of the following:

  • Delegate a matter to a person;
  • Confer discretion on a person;
  • Make different regulations for different person, fuels, places, things, uses or transactions or classes of person, fuels, places, things, uses or transaction;
  • Establish or define classes of person, fuels, places, things, uses or transactions.

Subsection 71(7) provides that a regulation made before December 31, 2009 under paragraph 71(2)(d)(iv) may be made retroactive to September 2, 2009 or a later date.

Subsection 71(8) provides that a regulation made before December 31, 2012 in relation to section 1.1 [fuel imported by ship] may be made retroactive to May 1, 2012.

Subsection 71(9) provides that a regulation made on or before March 31, 2016 in relation to propane, heating oil or non-motor fuel oil may be made retroactive to April 1, 2013 or a later date.

Section 73 – Power To Make Regulations

MFT - SEC. 73/Int.

REPEALED

Interpretation (Issued: 2009/04; Revised: 2015/04)

Effective July 1, 2011, section 73 is repealed.

Effective July 1, 2008, Bill 37, Carbon Tax Act, 2008, added section 73 as a consequential amendment to the Act. This section provided that the Lieutenant Governor in Council may make regulations until June 30, 2011 to resolve any difficulties or problems arising from amendments to the Act made by the Carbon Tax Act.

However, before the end of the period, the legislature must have had passed legislation confirming the regulations, or the amendments cease to have effect. These transitional regulation provisions were consistent with the transitional regulation provisions included in other new legislation.