Fuel taxes and levies - a clarification

  From the November 13, 2018 issue of Agri-News
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 A greater amount of crops needing to be artificially dried this fall has led to uncertainty about fuel taxes and rebates in the province. Neil Blue, provincial crop market analyst with Alberta Agriculture and Forestry, outlines and clarifies what is currently in place for producers.

Most producers are familiar with the tax and exemption on farm gasoline and diesel. “The Alberta Farm Fuel Benefit Program allows eligible producers to receive a 9 cent per litre provincial fuel tax exemption on the purchase of marked gasoline and diesel used for farming purposes,” says Blue. “Eligible producers are also exempt from the provincial carbon levy on those fuels. To qualify for these benefits, producers must be actively and directly farming, be making the day-to-day management decisions, and have an annual farm commodity production worth at least $10,000.”

Blue adds that if the only other significant sources of income are CPP, Old Age Security and supplements, one may be eligible for the tax exemption with gross annual farm revenue of $5,000 to $9,999. “Upon application approval, an exemption certificate and number are issued. Exempt producers then provide that number to their fuel distributor who excludes the provincial 9 cent per litre fuel tax and the carbon levy from the purchase of marked diesel and gasoline. Federal GST is charged on the fuel purchase, and that GST can be rebated for GST registrants.”

Only propane that is used as motive fuel - fuel to propel a motor vehicle - has a 9.4 cent per litre Alberta fuel tax included. “However,” he says, “It is possible that some propane suppliers may be charging this 9.4 cent per litre provincial tax on all propane sold. So, purchasers of non-motive use propane should check with their supplier to determine if the purchase contains that provincial tax. If it does contain that 9.4 cent tax, tax rebate forms are available from Alberta Finance for propane used for farming, heating, lighting and appliances.”

“Keep in mind that all propane is subject to the 4.62 cent per litre carbon levy plus GST. If the propane is a business expense, the carbon levy amount paid can be used as farm expense. The GST paid on propane used for business purposes would be refundable for GST registrants,” adds Blue.

The Remote Area Heating Allowance Program is another rebate that may help some producers who do not have access to natural gas service. Explains Blue, “This program has been in effect for several years, applies to propane or heating oil use for heating, and provides a rebate of up to 25 per cent of those costs.”

As for taxes on natural gas, Blue says that it has a current carbon levy of $1.517 per gigajoule (GJ) plus GST for all uses. “The natural gas used for farming purposes, including the carbon levy amount paid, can be used as farm expense, and GST on the business use portion would be refundable for GST registrants.”

Find more information about the Alberta Farm Fuel Benefit, Fuel Tax Rates, and Carbon Levy Rates. Alberta Fuel Tax - Publications & Forms contains links to the Tax Exempt Fuel User Rebate Application, Listing of Fuel Purchases, as well as other publications and forms.

Alberta Farm Fuel Benefit

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For more information about the content of this document, contact Neil Blue.
This document is maintained by Christine Chomiak.
This information published to the web on November 7, 2018.