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Part of Fuel tax

Fuel tax – Propane

Information for entities that produce, distribute, import, and sell propane in Alberta.

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Fuel tax

Overview

Fuel tax must be paid by consumers when purchasing propane for use as a motive fuel, or when purchasing it from an automotive dispensing system.

In Alberta, only spec propane is normally sold for motive use.

Fuel tax is remitted to Tax and Revenue Administration (TRA) by propane distributors and producers when they dispense it into a retailer’s tank that can be used to fuel vehicles.

The retailer then passes the tax to the consumer, by including it in the price of taxable propane sold to their customers.

Situations when propane is taxable

Propane is taxable when dispensed into a tank which can be used to fill vehicles. The tax is paid to the propane distributor who delivers the propane and is responsible for remitting the tax to TRA.

Situations when propane is not taxable

Propane is not taxable when:

  • a propane distributor sells propane to another propane distributor appearing on the list of Registered Liquefied Petroleum Gas (LPG) Distributors
  • propane is exported from Alberta in bulk for use outside Alberta
  • propane is purchased from a dispensing system other than a dispensing system used to dispense propane for motive fuel, if the propane is purchased for a use other than as a motive fuel
  • propane is purchased by a consumer who is an eligible tax-exempt purchaser
  • a propane distributor delivers propane into a bulk storage tank, where propane is stored and less than 50% of the propane stored in the tank is sold directly to consumers
  • propane is dispensed in portable propane cylinders
  • propane is delivered to a consumer and used solely for farming or for non-motive purposes

Tax-exempt consumers

The Government of Alberta recognizes that many First Nations people and communities in the province prefer not to describe themselves as Indians or bands. These terms have been used where necessary to reflect their legal meanings in the federal Indian Act.

The following consumers are tax-exempt:

  • approved tax-exempt consumers, such as mining companies, where the propane is used solely for non-taxable purposes
  • diplomats, foreign embassies and the Government of Canada
  • eligible consumers if the sale is made on a reserve in Alberta

Propane distributors, producers and retailers

Distributors

  • A propane distributor is a person who sells or delivers propane to another person for resale in Alberta.
  • Distributors are required to remit fuel tax to TRA when the propane is sold to a retailer for resale, to a consumer, or when it is dispensed into a tank which can be used to fuel vehicles.
  • Distributors are only required to remit and report tax-included sales to retailers or consumers.
  • Distributors that sell propane that may be resold as a motive fuel must file a monthly return, including for periods where there were no taxable sales.

Producers

  • A propane producer is a person that produces propane. Under the Fuel Tax Act, propane producers are also considered propane distributors.

Retailers

  • Retailers who sell propane from a tank that has a dispensing system that can dispense propane for use as a motive fuel are required to purchase propane tax-included, from the propane distributor who delivers the propane.
  • Retailers who sell tax-exempt propane from the same tank can apply for refunds from TRA, for the tax they paid to the distributor.

How to register

For detailed step by step instructions, see:

Step 1. Create or log in to your Alberta.ca Account

  • Create a basic account or log in to your Alberta.ca Account.

Log in to Alberta.ca Account

Step 2. Sign in and select Online Registration

  • After you create an Alberta.ca Account, login to TRACS. You will need to sign in using your Alberta.ca Account user name and password. Once you log in, you will be redirected to TRACS.
  • Select 'Online Registration'.
  • Select ‘Fuel Tax’ from the Program Name menu.

Step 3. Complete and submit the online registration form

  • After you submit your registration, you will receive a pending status notification and a reference number. TRA may need to contact you for further information.

Step 4. Once approved

  • You will be notified by email that your approval letter is available in your TRACS account.

How to file

Propane producers and distributors may opt to file propane tax returns and remit the propane tax either monthly or on a calendar quarterly basis.

The propane tax return is due on or before the 28th day of the month following the end of the reporting period (monthly or quarterly). A return must be filed even if no taxable sales were made during the period. Late returns are subject to a penalty.

A claim for a refund must be received by TRA no later than 3 years from the end of the calendar year the exempt propane sale occurred.

Step 1. Complete the return/claim in TRACS

Log in to your TRACS account and select 'File a Return/Claim'.

Step 2. Submit your return/claim

Step 3. Remit the amount owing or receive your refund

  • Remit the amount owing (see Making payments).
    • Interest will be charged on late remittances and will continue to accrue until the balance is paid in full.
  • For claims, you will receive your refund by direct deposit – see Set up direct deposit.
  • If the assessment differs from your filing, if interest or penalties apply, or if a balance is owing, a notice of assessment will be available in your TRACS account.

Step 4. Report Sales to Retailers (annual report)

  • LPG producers/distributors are required to complete the Annual LPG Sales to Retailers each calendar year. 
  • Once completed, upload using the TRACS Submit Documents function on or before January 28 of the following year.

Maintain your account in TRACS

TRA Client Self-Service (TRACS) is a secure online system for authorized Tax and Revenue Administration (TRA) clients to conveniently conduct business with TRA.

Retailers and distributors can do the following tasks in TRACS:

  • file returns/claims
  • view the status of submissions
  • view notices of assessment (if available)
  • access financial information and view account period balances
  • update address and contact information
  • delegate account access to other employees or authorized individuals
  • submit documents
  • file a notice of objection
  • request for waiver of penalties and interest

For more details, instructional videos and to log in to your TRACS account, see TRACS information.

Authorize a representative

An individual with proper authorization for the business may consent to the release of confidential information about account(s) with TRA to a specific firm and/or individual.

An individual with proper authorization for the business includes a(n):

  • owner
  • partner of a partnership
  • corporate director
  • trustee of an estate
  • individual with delegated authority

Step 1. Fill out the Alberta Consent Form

Step 2. Submit the consent form

  • Submit your completed consent form to TRA.

Step 3. Representative receives PIN (only for TRACS access)

  • TRA will review the consent form to ensure it is complete.
  • TRA will issue a PIN number to the individual via e-mail. TRACS access can only be provided to an individual.

The representative must enter the PIN and account number to access TRACS account. See How to access TRACS for instructions.

File a waiver request

TRA recognizes there may be circumstances beyond a person’s control that prevent the person from complying with filing and payment obligations imposed under the Fuel Tax Act.

In such circumstances, TRA may exercise its discretion to waive or cancel all or any portion of penalties or interest that have been assessed.

Step 1. Log in to your TRACS account

  • Select ‘Waiver request – Penalties & Interest’ from ‘Account Actions’.
  • If you do not have access to your account in TRACS, complete the TRACS Enrolment Request.

Step 2. Complete and submit the waiver request

  • Complete all required fields.

Step 3. Receive decision

  • TRA will review your waiver request. We may contact you for additional information.
  • You will receive the written decision by secure email.

Publications, forms, videos

Fillable PDF forms may not open properly on some mobile devices and web browsers. For help opening the forms, contact PDF form technical support.

Legislation

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Subscribe to TRA's publications and announcements

Contact

Connect with Tax and Revenue Administration:

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Phone: 780-427-3044
Toll free: 310-0000 before the phone number (in Alberta)
Email: [email protected]

Related

Previous International Fuel Tax Agreement
Next Marked fuel