Tax Interpretation Manual: Tobacco Tax Act - Regulations

Regulation 1 - Definitions

TTA - REG. 1/Cigar Wholesale Dealer/Int.

Cigar Wholesale Dealer

References: Section 44(2)(h); Regulations 2, 5

Interpretation (Issued: 2000/06, Revised: 2009/03)

Effective April 1, 2000, B.C. Reg. 118/2000 adds a definition for "cigar wholesale dealer" to the Act. The purpose of the addition is to establish a separate wholesale dealer permit for wholesalers who only sell cigars.

TTA - REG. 1/Retail Authorization/Int.

Retail Authorization

Interpretation (Issued: 2009/03)

Effective September 1, 2007, OIC 499/2008 adds the definition of "retail authorization." Retail authorization means:

(a) an authorization issued by the director in accordance with Section 6,

(b) a written authorization provided by the director under Section 6.2, or

(c) an authorization held by a person referred to in Section 6.3.

TTA - REG. 1/Package/Int.

Package

Interpretation (Issued: 2005/04, Revised: 2009/03)

Effective February 16, 2005, the definition of package in paragraph (c) is amended to increase the size of a container in which tobacco is packed from 300 grams to 500 grams. Paragraph (c) refers to packages of tobacco, other than cigarettes, cigars, pre-portioned tobacco sticks, pipe tobacco, snuff, chewing tobacco or raw leaf tobacco.

Regulation 1.1 - Classes Of Dealer's Permits

TTA - REG. 1.1/Int.

Interpretation (Revised: 2000/06)

Effective July 19, 1999, OIC # 243/99 adds section 1.1 to expressly establish that wholesale and retail dealer permits are classes of permits as authorized under section 44 of the Act. Prior to this amendment, the regulations included a variety of provisions pertaining to the different types of wholesale and retail dealer permits, but did not explicitly state that these permits are classes of permits as contemplated under the Act.

Effective April 1, 2000, OIC # 118/2000 established “the cigar wholesale dealer permit” as a separate permit for wholesalers dealing exclusively in cigars. If such wholesalers subsequently expand their business to sales of cigarettes, they are required to obtain a regular wholesale dealer's permit.

See also TTA/Reg. 3.5/Cigar Wholesale Dealer

Regulation 2 - Classes Of Dealer's Permits

TTA - REG. 2/Int.

Interpretation (Revised 2009/03)

Regulation 2 establishes four classes of dealer's permits: wholesale; cigar wholesale; special retail; and exempt sale retail.

Regulation 2 was formerly Regulation 1.1. Regulation 1.1 was added to the Regulations by B.C. Reg. 243/99 on July 19, 1999. The amendment did not address cigar wholesale dealer permits. Before this amendment, the regulations included a variety of provisions on different types of wholesale and retail dealer permits, but did not state that these permits are classes of permits under the Act. Effective April 1, 2000, B.C. Reg.118/2000 established "the cigar wholesale dealer permit" as a separate permit for wholesalers dealing exclusively in cigars. If such wholesalers expand to sell cigarettes, then they are required to obtain a regular wholesale dealer's permit.

Regulation 3 - Application For Dealer's Permit

TTA - REG. 3/Int.

Interpretation (Revised: 2009/03)

Regulation 3 requires persons required by the Act to have dealer's permit to apply to the director for the permit. The application must be in the form required by the director. Regulation 3 is subject to Section 6 (Dealer's permits).

Regulation 3 was formerly Regulations 2 and 3. Effective November 5, 1992, the former Regulation 2 was added to the Regulations by B.C. Reg. 428/92. Effective November 5, 1992, the former Regulation 3 was added to the Regulations by B.C. Reg. 427/92.

Regulation 4 - Wholesale Dealer Permit

TTA - REG. 4/Int.

References: Sections 6, 7; Regulation 20

Interpretation (Issued: 2009/03)

Regulation 4:

  • defines the required content of an application for a wholesale dealer permit (Reg. 4(1)). The application must contain the name and address of the applicant and be signed by the applicant, one of its partners (in the case of a partnership), or an authorized officer of the applicant (if the applicant is a corporation);
  • requires an applicant to have a business plan acceptable to the director for the sale of tobacco and no undisputed outstanding tax liabilities under the Act (Reg. 4(2));
  • requires a wholesale dealer, over each three month period, to purchase 75 per cent of its resale inventory from an manufacturer or its agent, unless otherwise authorized by the director (Reg. 4(3));
  • requires the dealer to print its permit number in a prominent place on each bill of sale or similar document used by the wholesale dealer for the sale of tobacco (Reg. 4(4));
  • provides that a wholesale dealer's permit may be suspended or cancelled under Section 7 (Special retail dealer permits) (Reg. 4(5)); and
  • deems each holder of a wholesale dealer's permit to be appointed as a collector under the Act (Reg. 4(6)).

Regulation 5 - Cigar Wholesale Dealer Permit TTA - REG. 5/Int.

Interpretation (Issued: 2009/03)

Regulation 5(1) requires a person who intends to sell only cigars at wholesale to first obtain a wholesale dealer's permit.

Regulation 5(2) requires a holder of a cigar wholesale dealer permit to not sell any other tobacco unless granted another permit under the Act. Regulation 5(2) was formerly Regulation 3.5, which was added to the Regulations effective April 1, 2000 by B.C. Reg. 118/2000.

Regulation 5(3) states Regulation 4 applies to cigar wholesale dealer permits.

Regulation 6 - Retail Authorization TTA - REG. 6/Int.

Reference: Regulation 6.2

Interpretation (Issued: 2009/03)

Effective September 1, 2007, OIC 499/2007 amends Regulation 6 defining when the director may issue a retail authorization in certain circumstances.

Prior to September 1, 2007, Regulation 6 defined when a valid registration certificate issued under the Social Service Tax Act ("SSTA") served as a valid retail authorization. The Regulation allowed the director to cancel a person's retail authorization without cancelling the person's SSTA vendor registration. Before November 5, 1992, a person's authority to sell tobacco could not be cancelled without cancelling the person's SSTA registration.

Regulation 6(1) establishes that the director may issue a retail authorization to a person to sell tobacco at retail in the province if:

  • The person has submitted an application containing the information required under Regulation 6.1;
  • The person has not previously held a retail authorization or dealer's permit that was cancelled;
  • The person does not hold a retail authorization or dealer's permit that is suspended under the Act at the time the application is submitted; and
  • The application is not in respect of a location for which a retail authorization held by another person not at arm's length from the applicant was suspended of cancelled, to which a prohibition order under the Tobacco Control Act applies, or is subject to an administrative proceeding under the Tobacco Control Act.

Regulation 6(2) states for the purposes of Subsection 1(a) and (b), "retail authorization" includes a retail authorization as that term was used in the regulation before September 1, 2007.

Regulation 6.1 - Application

TTA - REG. 6.1/Int.

Interpretation (Issued: 2009/03)

Effective September 1, 2007, OIC 499/2007 adds Regulation 6.1 which defines the information an application for a retail authorization must contain.

For an individual applicant, the application must contain the person's name and address, the name under which the person is conducting business and the address of each location the tobacco will be sold at retail.

For a corporation, the application must contain the name of the corporation, the address of the corporation's head office in British Columbia (and if there is no such office, then the address of the head office), the name under which the person is conducting business and the address of each location the tobacco will be sold at retail.

For a partnership, the application must contain the name of the partnership, the name of each partner, the address of the partnership's head office in the province (and if there is no such office, then the address of the head office), the name under which the person is conducting business and the address of each location the tobacco will be sold at retail.

For an income trust, the name of the income trust, the name and address of the responsible trustee, the address of the trust's head office in the province (and if there is no such office, then the address of the head office), the name under which the person is conducting business and the address of each location the tobacco will be sold at retail.

Regulation 6.2 - Written Authorization From The Director

TTA - REG. 6.2/Int.

References: Section 37; Regulation 6

Interpretation (Issued: 2009/03)

Effective September 1, 2007, OIC 499/2007 adds Regulation 6.2. The regulation sets out situations additional to those under Regulation 6 (Retail Authorization) in which the director may issue a retail authorization. Regulation 6.2 also defines the information the director may require from an applicant for such an application.

Regulation 6.2(1) provides a retail authorization may be granted to a person who receives written authorization to sell tobacco in the following cases:

  • the person has previously held a retail authorization or dealer's permit that has been suspended or cancelled under Section 7 of the Act;
  • the application is for a location at which a retail authorization was held by another person who was not arm's length to the applicant and the retail authorization was suspended under Section 7 of the Act;
  • the application is for a location subject to a prohibition order under the Tobacco Control Act; and,
  • the application is for a location subject to an administrative proceeding under the Tobacco Control Act.

Regulation 6.2(2) states the director may require the applicant to provide written evidence showing the merit of the application on a balance of probabilities, a written undertaking, a bond under Section 37 (Bond deposit) of the Act, or all three.

For the purposes of subsections (1) and (2), "retail authorization" includes a retail authorization as that term was used in the regulation before September 1, 2007.

REGULATION 6.3 - Registration Under The Social Service Tax Act

TTA - REG. 6.3/Int.

Reference: Regulation 6.1

Interpretation (Issued: 2009/03)

Effective September 1, 2007, OIC 499/2007 adds Regulation 6.3. It supersedes old Regulation 3.3(1). The regulation states if a person held a valid vendor registration certificate under the Social Service Tax Act on September 1, 2007 and is otherwise in compliance with the Tobacco Tax Act and its Regulations, then the person is authorized to sell tobacco at retail until June 1, 2008.

The regulation requires such a person to apply for a retail authorization under Regulation 6.1 on or before June 1, 2008. The director has discretion to grant the retail authorization.

Regulation 6.4 - Black Stock Or Unmarked Tobacco

TTA - REG. 6.4/Int.

Interpretation (Issued: 2009/03)

Effective September, 2007, OIC 499/2007 adds Regulation 6.4. The regulation provides that a retail authorization does not permit a dealer to purchase or sell black stock tobacco or unmarked tobacco.

Regulation 6.5 - Cancellation Or Suspension Of Retail Authorization

TTA - REG. 6.5/Int.

Interpretation (Issued: 2009/03)

Effective September, 2007, OIC 499/2007 adds Regulation 6.5. The regulation states a retail authorization ceases to be valid if it is suspended or cancelled by the director under Section 7 (Refusal, suspension and cancellation of dealer's permit or retail authorization) or Section 9 (Suspension under the Tobacco Control Act) of the Act.

Regulation 7 - Special Retail Dealer Permits

TTA - REG 7/Int.

Reference: Section 43.1; Regulation 35

Interpretation (Issued: 2009/03)

Regulation 7(1) states if the minister has entered an agreement with a band under Section 43.1 (Band tax agreement), then only a holder of a "special retail dealer permit" (SRDP) may sell tobacco on the relevant reserve.

Regulation 7(2) states a person holding an exempt sale retail dealer (ESRD) permit at the formation of a Section 43.1 agreement must, on the request of the director, return it to the director and the director may issue that person an SRDP.

Regulation 8 - Exempt Sale Retail Dealers TTA - REG 8/Int.

References: Sections 2, 7, 9, 43.1, 44(2)(h); Regulations 1 "indicium", 10, 11(3), 11(4), 13, 26, 27, 28, 30, 35

Interpretation (Issued: 2009/03)

An "exempt sale retail dealer" (ESRD) is a person permitted by the director to sell black stock tobacco or unmarked tobacco or both to consumers. If the sale is to an eligible exempt consumer, then the ESRD need not collect tax. Regulation 8 sets out the rules for exempt sale retail dealers:

Regulation 8(1) states a person must not sell or offer to sell tobacco to a consumer without collecting the tax imposed by Section 2 (Tax on consumer) or Section 43.1 (Band tax agreement), unless that person holds an ESRD permit. Regulation 8(1) supersedes old Regulation 13.1(3), which was added to the Regulations effective November 1, 1993 by B.C. Reg. 339/93.

Regulation 8(2) states the director may authorize an ESRD to sell black stock tobacco or unmarked tobacco or both to consumers.

Regulation 8(3) authorizes an ESRD to purchase, possess and store black stock tobacco or unmarked tobacco and to sell either to an exempt consumer.

Regulation 8(4) and (5) operate together to require an ESRD who sells marked tobacco to collect the tax imposed by the Act, unless both (1) the sale is to an exempt consumer and (2) the ESRD receives prior approval from the director.

Regulation 8(6) grants the director discretion to refuse to issue an ESRD permit if satisfied there are sufficient dealers holding such permits in the market area proposed to be served by the applicant. Regulation 8(6) supersedes old Regulation 3.11(a), which was added to the Regulations, effective November 1, 1993, by B.C. Reg. 339/93.

Regulation 8(7) states a person is not to hold more than one ESRD permit at one time and that a permit may be restricted to one place.

Regulation 8(8) states a condition of holding an ESRD permit is the dealer must obtain from each consumer to whom the dealer sells black stock tobacco or unmarked tobacco information specified by the director showing the consumer is an eligible exempt consumer. Regulation 8(8) supersedes old Regulation 13.1(4), which was added to the Regulations, effective November 1, 1993, by B.C. Reg. 339/93.

Regulation 8(9) states an ESRD ceases to be valid if suspended under Section 7 (Refusal, suspension and cancellation of dealer's permits or retail authorization) or Section 9 (Suspension under the Tobacco Control Act).

Regulation 9 - Restrictions Related To Black Stock Tobacco And Unmarked Tobacco TTA - REG. 9/Int.

Interpretation (Issued: 2009/03)

Regulation 9 enumerates restrictions on the purchase, possession, storage and sale of black stock tobacco and unmarked tobacco.

Regulation 9(1) states a dealer must have written authorization from the director to purchase, possess, store or sell black stock tobacco or unmarked tobacco and cannot engage in these activities unless the dealer: intends to sell to an exempt sale retail dealer ("ESRD"); is an ESRD and intends to sell to an exempt consumer; or intends to ship the product out of province for resale. Regulation 9(1) supersedes old Regulation 24(1), which was added to the Regulations by B.C. Reg. 177/93 and was made effective May 1, 1994 by B.C. Reg. 258/93.

Regulations 9(2) and (3) require an application to the director for an authorization be in writing. Regulation 9(3) (unmarked tobacco) supersedes old Regulation 20, which was enacted by B.C. Reg. 177/93, s. 10, and became effective May 28, 1993 by B.C Reg. 301/94.

Regulation 9(4) requires an ESRD authorized to sell black stock tobacco or unmarked tobacco to sell only to exempt consumers.

Regulation 10 - Restrictions On Quantity Or Sales Of Exempted Tobacco

TTA - REG. 10/Int.

References: Section 44(2)(h); Regulations 10, 13, 35

Interpretation (Issued: 2009/03)

Regulation 10 places a daily and monthly limit on sales of exempt tobacco to a person. The limit may be overcome if before the sale the exempt sale retail dealer (ESRD) is advised by the director that the purchaser is an exempt consumer and the sale to the exempt consumer is a retail sale.

Regulation 10(1) prohibits an ESRD from selling to a person: more than 400 grams of exempt tobacco in a day; and, more than 1600 grams of exempt tobacco in a month. This Regulation supersedes old Regulation 13.1(5), which was enacted effective May 1, 2000 by B.C. Reg. 290/2000. This drew, for the first time, a quantitative line between a retail purchase and a wholesale purchase.

Regulations 10(2) - (3) prohibit an ESRD from selling exempt tobacco to a person if the ESRD is aware that the sale will cause the person to exceed the daily or monthly limits. These Regulations supersede old Regulations 13.1(5) - (6), which were enacted effective May 1, 2000 by B.C. Reg. 290/2000.

Regulation 10(4) provides the exception to the rule in 10(2) - (3); an ESRD may sell more than the prescribed limit if before the sale the director advises the ESRD the sale is a retail sale to an exempt consumer. This Regulation supersedes old Regulations 13.1(8), which was enacted effective May 1, 2000 by B.C. Reg. 290/2000.

Regulation 11 - Conditions For Holding Permits

TTA - REG. 11/Int.

References: Section 7; Regulations 6, 35

Interpretation (Revised: 2009/03)

Effective September 1, 2007, OIC 499/2007 amends Regulation 11 by adding the term "retail authorization."

This Regulation defines the conditions of holding a permit of any class.

Regulation 11(1) states a person must be actively in the business to which the permit or authorization applies. Regulation 11(1) supersedes old Regulation 3.4(1), enacted by B.C. Reg. 427/92, s.1 effective November 5, 1992.

Regulation 11(2) empowers the director to suspend or cancel a permit or authorization of a dealer who has not complied with Regulation 11(1) for a continuous period of 3 months in the preceding 6 months. Regulation 11(2) supersedes old Regulation 3.4(2), enacted by B.C. Reg. 427/92, s.1 effective November 5, 1992.

Regulation 11(3) states a dealer's permit must designate the dealer's principal place of business and must be displayed in a prominent position at that place.

Regulation 11(4) requires a dealer who carries on business at more than one place to obtain a permit for each place and to prominently display the permit at each place.

Regulation 11(5) states if a dealer has a principal place of business and one or more branches, then the dealer may be granted duplicate permits for each branch.

Regulation 11(6) states a dealer who carries on business in the province but has no fixed place of business in the province must carry the permit at all times while doing business in the province and must produce the permit on the demand of a representative of the director.

Regulation 11(7) requires a dealer who changes its name or address to return its permit to the director and to apply for a new permit.

Regulation 11(8) requires a dealer whose permit is lost or destroyed to report this immediately to the director and apply for a copy of the original permit.

Regulation 11(9) states if a dealer ceases to carry on business, for which the permit was issued, then the permit becomes void and the dealer must return it to the director within 15 days of the ceasing to carry on business.

Regulation 11(10) bars an exempt sale retail dealer ("ESRD") from selling or offering to sell tobacco to another dealer for the purpose of resale.

Regulation 11(11) prohibits a dealer from purchasing or offering to purchase tobacco for resale from an ESRD.

Regulations 11(10) - (11) supersede old Regulations 13.1(1) - (2), which were enacted by B.C. Reg. 30/92, effective March 1, 1992.

Regulation 11.1 - Cancellation Of Dealer's Permit Or Retail Authorization

TTA - REG. 11.1/Int.

References: Section 7

Interpretation (Issued: 2009/03)

This Regulation defines the circumstances for the cancellation of a dealer's permit or retail authorization under Section 7(4.1) and Section 7(4.3) of the Tobacco Tax Act.

Regulation 11.1(1) is repealed, effective June 1, 2009.

Regulation 11.1(2) authorizes the director to cancel a dealer's permit or retail authorization that has been issued in error, enacted by OIC 321/2008, effective June 1, 2008. For example, a permit is issued with a misspelled name, or a permit is issued to a person at a specific address, and the municipality later renumbers the street - the permit now shows an incorrect address.

Regulation 12 - Tax Remittance By Dealer

TTA - REG. 12/Int.

Reference: Sections 2, 43.1; Regulations 16, 35

Interpretation (Issued: 2009/03)

Regulation 12 defines the tax remittance obligations of a dealer who is not a collector.

Under Regulation 12(1), if the dealer buys tobacco from a collector, then the dealer must remit to the collector the tax collected under the Act.

Under Regulation 12(2), if the dealer buys tobacco from a non-collector, then the dealer must remit the tax collected under the Act to the director per Regulation 16 (Purchase by dealer from non-collector).

Regulation 12 supersedes old Regulation 5, which was enacted by B.C. Reg. 177/93, effective May 28, 1993.

Regulation 13 - Collections And Returns

TTA - REG. 13/Int.

References: Regulation 35

Interpretation (Issued: 2009/03)

Regulation 13 defines when a collector or exempt sale retail dealer (ESRD) must provide returns, records and taxes to the director regarding sales of tobacco.

Regulation 13(1) requires a collector to: before the 20th day of the month to deliver to the director a return for the previous month in the form the director requires; remit with the return tax and security, calculated per the return; and, provide records required by the director regarding sales to an ESRD.

Regulation 13(2) applies to an ESRD to the exclusion of Regulation 13(1). On or before the 10th day of each month or such other day as the director requires, an ESRD must: deliver to the director such return as the director requires; and, provide records required by the director regarding sales of exempt tobacco.

Regulation 13(3) allows a collector to apply to the director for a reporting period that does not coincide with the calendar month and is not longer than 5 weeks.

Regulation 13(4) empowers the director to require a collector or ESRD to deliver a return covering any period the director determines at any time and requiring a collector to remit tax collected during that period.

Regulation 13(5) requires a collector who has obtained an alternative reporting period under Regulation 13(3) to provide to the director on or before March 1 in each year a statement indicating the dates on which the collector will end each period in the following fiscal year.

Regulation 13(6) provides that a "fiscal year" for Regulation 13(5) begins on April 1.

Regulations 13(1) - (6) supersede old Regulations 6(1), (1.1) - (4) and (7) respectively.

Regulation 13.1 - ESRD Restrictions

TTA - REG. 13.1/Int.

Interpretation (Revised: 2001/04)

Effective March 1, 1992, BC Reg 30/92 added the following sections.

Effective November 1, 1993, BC Reg 339/93 added the following subsections.

Effective July 19, 1999, OIC # 243/99 amends section 13.1(3) to clarify that any retail dealer located on reserve can sell tobacco to First Nations purchasers, but that only an exempt sale retailer dealer may sell tobacco exempt from tax. The previous wording of this section could have been misinterpreted to mean that dealers located on reserve who did not hold an ESRD permit were prohibited from making any tobacco sales to First Nations purchasers. This interpretation was inconsistent with the intent of the provision and with administrative practice.

Effective May 1, 2000, OIC #290/2000 amends section 13.1 of the regulations to the Act to establish limits on the amount of tobacco an ESRD can sell to a consumer. Previously there was no legislative provision defining a retail sale. Determination of what constituted a retail sale as opposed to a wholesale sale had been established by administrative guidelines only.

13.1(6) Prohibits an ESRD, upon information from the director or another source, from selling tobacco to a customer that would, when added to prior amounts sold in that day, exceed the maximum daily sale limit.

13.1(7) Prohibits an ESRD, upon information from the director or another source, from selling tobacco to a customer that would, when added to prior amounts sold in that month, exceed the maximum monthly sale limit.

13.1(8) Provides that an ESRD may sell more than the maximum limit where a consumer legitimately requires more than the 2/8 limit for personal use or consumption and has obtained approval from the director to purchase additional amounts.

Section 14 - Collector's Allowance

Ttar - Reg. 14/Int. - R.1

References:

Act: Section 1 "collector", "dealer", "director", "wholesale dealer"; Section 11; Section 15

TTAR: Section 15

Bulletin TTA 004

Interpretation (Issued: 2009/03; Revised: 2016/01)

Effective May 25, 2015, B.C. Reg. 94/2015 repealed and replaced TTAR section 14. This amendment, along with amendments to section 15 [allowance for collectors] of the Act and TTAR section 15 [tax rate change and payment of security], clarifies the allowances that may be retained with respect to payments of security.

TTAR section 14 specifically sets out the allowances that may be retained by a collector who pays security under section 11 [security] of the Act.

TTAR subsections 14(1) through 14(3) sets out the allowance that a collector may retain with respect to the security remitted as a result of regular reporting periods. TTAR subsection 14(4) provides for the allowance that a wholesale dealer who is a collector may retain with respect to an additional payment of security resulting from a tax rate increase.

R.1 History of Commission Rates (Revised: 2009/03)

History of Commission Rates (Revised: 2009/03)

Effective Dates

Amount

Feb. 5/71 - May 31/78

  • 3% of the first $10,000 collected
  • 1% of the balance of tax collected

June 1/78 - March 9/81

  • 3% of the first $10,000 collected
  • ½ of 1% of the balance of tax collected

March 10/81 - July 7/83

  • 3% of the first $10,000 collected
  • 3/8 of 1% of the balance of tax collected

July 8/83 - March 22/94

  • 3% of the first $10,000 collected
  • 3/8 of 1% of the balance of tax collected per month to a maximum allowable commission of $5,000 per annum.

March 23/94 - Present

  • 3% of the first $10,000 collected
  • 3/8 of 1% of the balance of tax collected per month to a maximum allowable commission of $10,000 per annum.
 

Section 15 - Tax Rate Change And Payment Of Security

TTAR - Reg. 15/Int.

References:

Act: Section 1 "consumer", "director", "retail dealer"; Section 12

TTAR: Section 15

Bulletin TTA 004

Interpretation (Issued: 2009/03; Revised: 2016/01)

Effective May 25, 2015, B.C. Reg. 94/2015 repealed and replaced TTAR section 15 to clarify the requirements for a retail dealer resulting from a tax rate change. TTAR section 15 is based on the requirements for a collector found in section 11 [security] of the Act and TTAR section 14 [collector's allowance].

The new TTAR section 15 includes the requirement for a retail dealer to provide an inventory and to pay security in the event of a tax rate increase. It also provides for a refund of security paid in the event of a tax rate decrease.

Prior to the 2015 amendment, TTAR section 15 was substantively the same as TTAR section 8, the provision it superseded which was enacted by B.C. Reg. 177/93, section 5, effective May 28, 1993.

Regulation 16 - Purchase By Dealer From Non-Collector

TTA - REG. 16/Int.

References: Regulation 35

Interpretation (Issued: 2009/03)

Regulation 16 provides that every dealer, who is not a collector and who buys tobacco from a person other than a collector, must prepare a report giving particulars of the purchase and forward the report, together with all taxes collected with respect to the tobacco, to the director within 20 days of the retail sale of the tobacco.

Regulation 16 is substantively the same as and supersedes old Regulation 9.

Before May 28, 1993, old Regulation 9 applied only to retail dealers.

Effective May 28, 1993 old Regulation 9 was broadened through amendment by B.C. Reg. 177/93, section 6 to apply to dealers.

Regulation 17 - Consumer Import Of Tobacco

TTA - REG. 17/Int.

Interpretation (Issued: 2009/03)

Regulation 17 requires every consumer who brings tobacco into British Columbia to immediately prepare a report giving particulars of the import, and forward the report, together with all taxes due with respect to the tobacco, to the director.

Regulation 17 is substantively the same as and supersedes old Regulation 10.

Section 18 - Dealer's Records

Ttar - Reg. 18/Int.

References:

Act: Section 1 "dealer", "director"; Section 23; Section 24

Interpretation (Issued: 2009/03; Revised: 2016/01)

Effective May 25, 2015, B.C. Reg. 94/2015 amended TTAR subsection 18(1) by replacing the reference to "tax collectable" with "the amount of tax to be collected and remitted, or the amount of security to be paid". This amendment clarifies that the provision applies to dealer's records relating to the amount of tax collected and remitted and the security to be paid and not only the tax collectable.

Effective February 28, 2007, OIC 88/2007 amends TTAR subsection 18(2) to reduce the length of time a dealer must kept records from seven to five years.

Regulation 19 - Sales On Credit

TTA - REG. 19/Int.

Regulation 19 defines the rules for collection of tax when tobacco is purchased on credit.

If tobacco is sold on credit, then the tax must be imposed and collected when the contract is formed or the purchase made.

The tax on the entire purchase price is due on the first payment of the purchaser. If the first payment is less than the tax on the entire purchase price, then all amounts received are deemed received on account of the tax until the tax on the entire purchase price is paid.

Regulation 19 is substantively the same as and supersedes old Regulation 13.

Regulation 20 - Tax Collection

TTA - REG. 20/Int.

Regulation 20 provides that a person deemed to be a collector by virtue of holding a wholesale dealer permit is not required to collect tax on a sale of tobacco to the same type of person.

Regulation 20 supersedes old Regulation 14, which was enacted by B.C. Reg. 177/93, effective May 28, 1993.

Regulation 21 - Tax Agreements

TTA - REG. 21/Int.

Interpretation (Issued: 2008/05)

Regulation 21 empowers the minister or director, subject to the Act and the regulations, to enter into agreements with collectors for the purpose of facilitating collection and payment of the tax.

Regulation 21 is substantively the same as and supersedes old Regulation 15.

Regulation 22 - Refund Or Deduction For Bad Debts

TTA - REG. 22/Int.

References: Section 16

Effective June 9, 2015, by B.C. Reg. 102/2015, TTAR section 22 is repealed and replaced by the current section. The new section contains formulae to be used with section 16 of the Act. Subsection 22(1) provides a formula for calculating the "specified amount" that may be deducted under subsection 16(3) or refunded under subsection 16(5) of the Act. Subsection 22(3) provides a formula for calculating the amount to be added to a collector's remittance, in accordance with subsection 16(6) of the Act, in the event that the collector recovers all or a portion of the bad debt. Subsection 22(4) provides a formula for calculating the amount to be repaid to government, in accordance with subsection 16(7) of the Act, if a dealer (other than a collector) recovers all or a portion of the bad debt.

The new section is consistent with similar provisions in other consumption tax regulations.

Regulation 23 - Requirements To Mark Or Stamp Packages, Cartons And Cases

TTA - REG. 23/Int.

Interpretation (Issued: 2009/03)

Regulation 23 requires a manufacturer of tobacco for sale in British Columbia to a taxable consumer, a dealer who imports tobacco into Canada for sale in British Columbia to a taxable consumer, and a dealer who acquires unmarked tobacco from an importer for sale to a taxable consumer in British Columbia to mark the tobacco as prescribed by Regulations 26 (Cigarettes), 27 (Tobacco) and 28 (Stamping).

Regulation 23 also prohibits a package, carton or case from being marked if it is to be sold at retail as black stock tobacco or unmarked tobacco by a dealer authorized to make such a sale.

Finally, Regulation 23 requires a manufacturer or dealer to apply in writing to the director for authorization to mark tobacco.

Regulation 23 supersedes old Regulation 17, which was enacted by B.C. Reg. 177/93, section 10(1) to (3), effective December 1, 1993. The province introduced a tobacco marking program in 1993, which identifies tax paid tobacco in the wholesale-retail chain, to combat smuggling.

Regulation 24 - Providing Packages, Cartons And Cases Without Charge Or Consideration

TTA - REG. 24/Int.

References: Regulation 35

Interpretation (Issued: 2009/03)

Regulation 24 requires every package, carton and case a dealer provides to a person for no consideration to be marked or stamped.

Regulation 24 is substantively the same as and supersedes old Regulation 18, which was enacted by B.C. Reg. 177/93, section 10, effective May 1, 1994.

Regulation 25 - Powers Of The Director

TTA - REG. 25/Int.

Interpretation (Issued: 2009/03)

Regulation 25 defines the director's powers regarding the tobacco marking program.

Regulation 25(a) gives the director discretion to authorize a manufacturer to mark tobacco.

Regulation 25(b) gives the director discretion to authorize a dealer to stamp packages.

Regulation 25(c) gives the director discretion to authorize a dealer to purchase, possess, store and sell unmarked tobacco or black stock tobacco to an exempt sale retail dealer ("ESRD") or an exempt consumer.

Regulation 25(d) gives the director power to impose reasonable conditions and restrictions regarding the marking of tobacco.

Regulation 25(e) gives the director discretion to specify the number and location of mark points that a manufacturer or dealer may establish and operate.

Regulation 25(f) gives the director discretion to cancel or suspend an authorization to mark tobacco if the director is satisfied that a manufacturer or dealer has not complied with the Act or regulations

Regulation 25 supersedes old Regulation 19, which was enacted by B.C. Reg. 177/93 effective May 28, 1993.

Regulation 26 - Marking Requirements - Cigarettes

TTA - REG. 26/Int.

References: Section 44(2)(k), 51(2)(b), 57, 58; Regulations 23 - 26, 31

Interpretation (Issued: 2009/03)

Regulation 26 details the marking requirements for packages, cartons and cases of cigarettes.

Packages - Regulation 26(1) requires every package of cigarettes to be marked on the tear tape with an indicium that conforms to the following specifications:

  • The indicium must read "CANADA DUTY PAID - DROIT ACQUITTÉ - BRITISH COLUMBIA - COLOMBIE BRITANNIQUE";
  • The width of the indicium must not be less than 4.5 millimeters;
  • The background colour of the indicium must be in pantone green 333, 100 per cent;
  • The colour of the text must be in process black, 100 per cent; and
  • The text must be in Helvetica 8 point.

Cartons - In addition to the marking requirements in (1), Regulation 26(2) requires every package of cigarettes or pre-portioned tobacco sticks to be marked to the following specifications:

  • The indicium must read "BC-CB" (When the marking program was first introduced, the indicium was to read "BRITISH COLUMBIA". This was amended because, under federal regulations, manufacturers are required to use bilingual marks and "BRITISH COLUMBIA-COLOMBIE BRITANNIQUÉ" would not fit in the marking area.);
  • The width of the indicium must not be less than 2.9 centimetres;
  • The height of the indicium must not be less than 1.4 centimetres;
  • The indicium must be surrounded by a border that is a thickness of 1.5 point;
  • The background colour of the indicium must be pantone green 333, 100 percent (effective September 1, 1994, BC Reg 301/94)
  • The colour of the text and border must be in process black, 100 percent; and
  • The text must be in Helvetica bold, not less than 12 point, upper case lettering (effective September 1, 1994, BC Reg 301/94).

Regulation 26(3) requires that the indicium specified under Regulation 26(2) must be affixed or imprinted on each end sticker that seals the end flaps of the carton or, if the carton is a paper box, at each end of the box.

Cases - In addition to the requirements under Regulations 26(1) - (2), Regulation 26(4) requires that every case (that is, a container of 25 or more cartons) be marked by printing the words "BC-CB":

Regulation 26(5) requires that the "BC-CB" on a case:

  • Be printed on the top of any 2 opposite face sides of the case;
  • Be printed in text that is 38.1 millimetres in height, upper case lettering; and,
  • The colouring of the text must be process black, 100 percent.

Regulation 26 is substantively the same as and supersedes old Regulation 21.

Regulation 27 - Marking Requirements - Tobacco

TTA - REG. 27/Int.

References: Sections 44(2)(k), 51(2)(b), 57, 58; Regulations 23(1), 26(1), 26(2)

Interpretation (Issued: 2009/03)

Regulation 27 requires that tobacco products not caught by Regulation 26 be marked. The content of the regulation was added to the Regulations effective September 1, 1994, by B.C. Reg. 301/94, s. 6. Manufacturers were required to implement this regulation's marking requirements September 1, 1994, wholesalers on December 1, 1994, and retailers March 1, 1995.

Tear-tape packages - Regulation 27(2) lists the requirements for every package that bears a tear-tape. Each package must be marked on the tear tape with an indicium to the following specifications:

  • The indicium must read "CANADA DUTY PAID - DROIT ACQUITTÉ - BRITISH COLUMBIA - COLOMBIE BRITANNIQUE";
  • The width of the indicium must not be less than 4.5 millimetres;
  • The background colour of the indicium must be in pantone green 333, 100 percent;
  • The colour of the text must be in process black, 100 percent; and
  • The text must be in Helvetica 8 point.

Non-tear-tape packages - Regulation 27(3) lists the requirements for every package that does not bear a tear-tape. Each package must be marked on the stamp required under the Excise Act, 2001 (Canada) with an indicium that conforms to the following specifications:

  • "BC" must appear before "DUTY PAID" and "CB" must appear before "DROIT ACQUITTÉ";
  • The background colour of the indicium must be pantone green 333, 100 per cent;
  • The colour of the text must be in process black, 100 percent; and,
  • The text must be in Helvetica 8 point.

Cases of tear-tape packages - Regulation 27(4) governs the marking of cases of tear-tape packages. Every case must be marked as follows:

  • By printing the letters "BC-CB" on the top of any 2 opposite face sides of the case;
  • The text must be 38.1 millimetres in height, upper case lettering; and
  • The colour of the text must be process black, 100 percent.

Regulation 27 supersedes old Regulation 21.1.

Regulation 28 - Stamping Requirements

TTA - REG. 28/Int.

References: Section 44(2)(k); Regulations 23(2), (3)

Interpretation (Issued: 2009/03)

Regulation 28 governs the stamping of imported tobacco, whether for sale by the importer to a taxable consumer (see Regulation 23(2)), or acquired from an importer for sale to a taxable consumer (see Regulation 23(3)).

Regulation 28(1) requires that every package of such tobacco be stamped with an indicium that conforms to the following specifications:

  • The indicium must read "BRITISH COLUMBIA" below which must be the serial number assigned by the director;
  • The width of the indicium must not be less than 2.5 centimetres;
  • The height of the indicium must not be less than 1.0 centimetres; and
  • The text must be in Helvetica bold 9 point, upper case lettering, and the numbers must be in Helvetica bold 9 point.

Regulations 28(2) and (3) provide that: a dealer authorized to stamp tobacco under Regulation 28(1) may apply for a supply of indicia from the director to stamp imported packages; and, the indicia remain the property of the Crown until the packages to which they are affixed are sold at retail.

Regulation 28 is substantively the same as and supersedes old Regulation 22, which was enacted by B.C. Reg. 177/93, section 10, effective December 1, 1993.

Regulation 29 - Reporting And Accounting Requirements

TTA - REG. 29/Int.

Interpretation (Issued: 2009/03)

Regulation 29(1) requires every manufacturer and wholesale dealer to establish and maintain an accounting system satisfactory to the director to account for the number of packages, cartons and cases that are any of: marked with an indicium; unmarked; or black stock.

Regulation 29(2) states the accounting requirement applies to all packages, cartons and cases shipped to, stored in or sold in the province by a manufacturer or wholesale dealer.

Regulation 29(3) requires the accounting be in the form and manner and made at the times specified by the director.

Regulations 29(4) and (5) pertain to stamping. They require an authorized dealer to account for all indicia on the request of the director and to return any indicia, including those affixed to unsold packages, if the dealer's permit is suspended or cancelled or the dealer ceases to sell imported packages.

Regulation 29 supersedes old Regulations 23, which was enacted by B.C. Reg. 177/93, section 10, effective May 1, 1994 per B.C. Reg. 258/93.

Regulation 30 - Prohibitions

TTA - REG. 30/Int.

References: Regulations 8, 35

Interpretation (Issued: 2009/03)

Regulation 30 lists a series of prohibitions applicable to dealers, wholesalers and persons.

Regulation 30(1) prohibits a dealer from purchasing, possessing, storing or selling packages, cartons or cases that bear the mark or stamp of another jurisdiction, unless both (a) the dealer intends to ship same out of province for resale; and (b) the dealer has written authorization from the director to do so.

Regulation 30(2) prohibits a dealer from selling unmarked or un-stamped tobacco to a taxable consumer.

Regulation 30(3) prohibits a dealer from stamping a package without written authorization from the director.

Regulation 30(4) prohibits a dealer from storing black stock tobacco or unmarked tobacco, or packages, cartons or cases that bear the mark or stamp of another jurisdiction, at a location other than a mark-point or another location authorized in writing by the director.

Regulation 30(5) prohibits a manufacturer or dealer from marking or stamping tobacco at a place other than a mark-point.

Regulation 30(6) prohibits a manufacturer from selling unmarked tobacco or black stock tobacco to a dealer unless the dealer has written authorization from the director to sell one, the other, or both.

Regulation 30(7) prohibits a person who is not an exempt sale resale dealer (ESRD) from both purchasing more than: (a) 400 grams of exempted tobacco per day; and (b) more than 1600 grams of exempted tobacco per month. Regulation 30(8) creates an exception to this prohibition if the director is satisfied the sale is a retail sale.

Regulation 30 supersedes old Regulation 24, which was enacted by B.C. Reg. 177/93, section 10. What are now Regulations 30(7) and (8) were enacted by B.C. Reg. 290/2000, effective July 28, 2000.

Regulation 31 - Definition "Mark Or Stamp"

TTA - REG. 31/Int.

References: Sections 40(4), 51(2)(b), 54(8)(a)(i), 58(1) - (3); Regulation 1 "indicium"

Interpretation (Issued: 2009/03)

Regulation 31(1) provides the indicium is the "prescribed mark or stamp" for the purposes of Sections 40(4), 57 and 58(1) - (3) of the Act.

Regulation 31(2) provides the indicium is the mark or stamp for the purposes of Section 51(2)(b) and 54(8)(a)(i) of the Act.

Regulation 32 - Non-Application

TTA - REG. 32/Int.

References: Sections 51(2), 54(8)(a)(i)

Interpretation (Issued: 2009/03)

Regulation 32(1) states the power of an official to seize tobacco under a Section 21 inspection, audit or examination (see Section 51(2)) does not apply to black stock tobacco or unmarked tobacco in the possession of a dealer authorized to purchase, possess, store or sell such tobacco. The Regulation also provides a judge is not required to order the return of such tobacco under Section 58(4)(a)(i) or the Act.

Regulation 32(2) provides a judge is not required to issue an order for the return of unmarked tobacco if the quantity is less than 1000 grams.

Regulation 33 - Seizure Limit On Tobacco

TTA - REG. 33/Int.

References: Section 21, 51(2)

Interpretation (Issued: 2009/03)

Section 51(2) of the Act authorizes an official to seize tobacco on an audit, inspection or assessment done under Section 21.

Regulation 33 limits the quantity of tobacco an official may seize and remove to 10 000 grams.

Regulation 33 supersedes Regulation 24.2, which was enacted by B.C. Reg. 233/96, effective August 16, 1996. The seizure limit was raised from 4000 grams to 10 000 grams by B.C. Reg. 118/2000, effective March 31, 2000.

Regulation 34 - Calculation Of Interest

TTA - REG. 34/Int.

Interpretation (Issued: 2009/03)

Regulation 34 requires interest payable under the Act be compounded monthly and calculated on the number of days since the last compounding of interest, or if no compounding has yet occurred, from the date that interest is payable under the Act.

TOBACCO TAX ACT REGULATION

Regulation 34.1 - Certificate Of Lien Form

TTA - REG. 34.1/Int.

References: Section 32.1

Interpretation (Issued: 2016/01)

Effective June 9, 2015, by B.C. Reg. 102/2015, TTAR section 34.1 provides for the use of a form, set out in the Schedule to the Regulations, as a Certificate of Lien. This form is prescribed for the purpose of section 32.1 of the Act.

Section 35 - Offence And Penalty

TTAR - Reg. 35/Int.

References:

TTAR: Section 7; Section 8; Section 9; Section 10; Section 11; Section 12; Section 13; Section 15; Section 16; Section 17; Section 18; Section 19; Section 23; Section 24; Section 30

Interpretation (Issued: 2009/03; Revised: 2016/01)

Effective May 25, 2015, B.C. Reg. 79/2015 amended TTAR subsection 35(2) by replacing references to months with references to days (e.g. 90 days replaces 3 months) in paragraphs (a) and (b). This amendment was made along with similar amendments in the Motor Fuel Tax Regulation and Carbon Tax Regulation to clarify the minimum and maximum length of imprisonment upon conviction for an offence.

TTAR section 35 makes it an offence to breach the following regulations:

  • TTAR subsection 7(1) - Selling tobacco without a special retail dealer permit on a reserve subject to a Band tax agreement;
  • TTAR subsection 8(1) - Selling tobacco to a consumer without collecting the tax, unless the person is an exempt sale retail dealer (ESRD);
  • TTAR subsection 8(4) - Sale by an exempt sale resale dealer of marked tobacco without collecting the tax (note, TTAR subsection 8(5) defines limited circumstances in which this is not an offence);
  • TTAR subsection 8(7) - Holding more than one exempt sale retail dealer permit at a time;
  • TTAR subsection 8(8) - Failure of an ESRD to collect documentation substantiating the non-collection of tax on a sale to a consumer of unmarked or black stock tobacco;
  • TTAR subsection 9(1) - Purchase, possession, storage or sale of black stock tobacco without written authorization of the director and without any of: (a) an intent to sell to an ESRD; (b) being an ESRD intending to sell to an exempt consumer; or, (c) intending to ship the product out of province for resale.
  • TTAR subsection 9(4) - Sale by an ESRD of black stock tobacco or unmarked tobacco to a person other than an exempt consumer;
  • TTAR subsection 10(1) - Sale by an ESRD to a person of more than 400 grams of exempt tobacco per day or 1600 per month;
  • TTAR subsection 10(2) - Sale by an ESRD to a person when the dealer is aware that the sale will result in the person exceeding the 400 gram limit;
  • TTAR subsection 10(3) - Sale by an ESRD to a person when the dealer is aware the sale will result in the person exceeding the 1600 gram limit;
  • TTAR subsection 11(4) - Failure of a dealer carrying on business in more than one place to obtain a copy of the permit for each place and prominently display the permit in each place;
  • TTAR subsection 11(6) - Failure of a dealer without a fixed place of business in the province to carry a permit while conducting business in the province, or failure to produce the permit on demand of a representative of the director;
  • TTAR subsection 11(7) - Failure of a dealer who changes its name or address to return its permit to the director and to apply for a new permit;
  • TTAR subsection 11(8) - Failure of a dealer whose permit is lost or destroyed to immediately report this to the director and to apply for a copy of the original permit;
  • TTAR subsection 11(9) - Failure of a dealer who ceases to carry on business to return the permit to the director within 15 days of the cessation;
  • TTAR subsection 11(10) - Sale or offer to sell by an ESRD to a dealer of tobacco for resale;
  • TTAR subsection 11(11) - Purchase or offer to purchase by a dealer of tobacco for resale from an exempt sale retail dealer;
  • TTAR subsection 12(1) - Failure of a dealer to remit tax to a collector when the dealer purchases tobacco from a collector;
  • TTAR subsection 12(2) - Failure of a dealer to remit tax per Regulation 16 when the dealer purchases tobacco from a non-collector;
  • TTAR subsection 13(1) - Failure of a collector to meet reporting and remittance requirements;
  • TTAR subsection 13(2) - Failure of an ESRD to meet reporting and remittance requirements;
  • TTAR subsection 13(3) - Failure of a collector to meet an alternative reporting period;
  • TTAR subsection 13(4) - Failure of a collector or ESRD to meet a director's specific demand for a report, a return, a remittance or all three;
  • TTAR subsection 13(5) - Failure of a collector with an abnormal reporting period to provide by March 1 a statement of the dates on which the collector will end each period in the following year commencing April 1;
  • TTAR subsection 15(1) - Failure of a dealer to inventory tobacco on hand on which tax under the Act has not been paid on change in the tax rate;
  • TTAR subsection 15(2) - Failure of a dealer to complete the required declaration and remit tax owing on tobacco within 30 days of a tax rate change;
  • TTAR subsection 15(4) - Dealer deducting remuneration when the required tax has not been paid;
  • TTAR subsection 16 [purchase by dealer from non-collector] - On purchase by a dealer from other than a non-collector, failure of the dealer to report to the director within 20 days of retail sale of the same tobacco both the details of the purchase and the tax owing;
  • TTAR subsection 17 [consumer import of tobacco] - Failure of a consumer who brings tobacco into the province to immediately report the particulars and remit the tax due on the tobacco to the director;
  • TTAR subsection 18(1) - Failure of a dealer to keep at its principal place of business records and accounts adequate to determine the tax collectable under the Act;
  • TTAR subsection 18(2) - Failure of a dealer to keep records and accounts for a period of at least five years, unless the director authorizes their earlier destruction;
  • TTAR subsection 18(4) - When the records are required for an appeal under the Act, failure of a dealer to keep a record or account until all appeals have been exhausted;
  • TTAR subsection 19 [sales on credit] - When tobacco is purchased on credit, failure to impose tax at the time of formation of the contract or when the purchase was made;
  • TTAR subsection 23 [requirement to mark of stamp packages, cartons and cases] - Failure to meet marking requirements. See TTA/Reg. 23.
  • TTAR subsection 24 [providing packages, cartons and cases without charge or consideration] - Failure of a dealer to mark every package, carton or case of tobacco provided to a person without charge or for no consideration; and,
  • TTAR subsection 30 [prohibitions] - Violation of a dealer, wholesaler or person of any of a number of prohibitions. See TTA/Reg. 30.

TTAR section 35 superseded TTAR section 25, which was enacted by B.C. Reg. 177/93, effective May 28, 1993.