Gasoline Tax Refunds

Written By: Doug Reynolds Originally Published in the May/June 2003
issue of The Outfitter Magazine.


Although we received assurances at a meeting in Kenora this past October that the problems we were having with gasoline tax refunds had been worked out, I'm hearing reports from operators that this is not the case. Let's start with an overview of how the system is supposed to work. Gasoline used for certain qualified, off road uses is eligible for a 14.7 cent per litre refund. This refund applies to gasoline used in farm and construction equipment, as well as certain tourism uses. The tourism uses are fairly specific, so you need to check to see if you qualify.

The main category that is of interest to us is gasoline that is used in boats that is provided to our guests as part of a package price. Gas that you sell to your guests does not qualify, nor does gas that they use in their own boats. Fuel for camp boats used to transport guests and equipment qualifies, as does gas for equipment at camp like tractors or working ATVs. Gas used in vehicles or boats for your own pleasure does not qualify, so if you ever do get a chance to go fishing some evening, your gas is taxable.

The main bone of contention with the tax people has been documentation. You pay the tax on all of the gas you buy, and then you need to demonstrate how much fuel went into tax free uses when you apply for a refund. Some situations should be pretty clear cut. In the case of remote and semi-remote operations where fuel is transported in bulk, such as drums flown into an outpost. we have been told that documenting those bulk shipments is sufficient, provided that there are no taxable uses at the destination. If all of the gas that goes to your outpost is provided to guests to use as part of their package, you should be able to document only the bulk shipments. If any of the fuel is sold or used in other taxable ways, it gets more complicated.

Where greater documentation is required are situations where fuel is dispensed for both taxable and non taxable uses. Here, it is necessary to record what went where. We are still trying to clarify exactly how this should be documented and what procedures will provide sufficient information to government while reflecting the realities of running a tourism business.

There are a couple of other cautions as well. Those of you who sell premixed fuel-oil mix need to be careful to apply for the refund only on the gasoline portion. You should also be aware that aviation fuel is not taxable, but avgas is already sold to you tax free. If you happen to use auto gas in aircraft used in your business, however, you can claim the refund.

We are continuing discussions with officials to obtain clarification of the record keeping requirements. We also need your feedback. What are you being told that you need to do? Are the requirements reasonable? Please give us a call with your experience so that we can make sure that we have a system in place that satisfies reasonable government requirements to make sure that tax is paid where tax is due, without burying us in paperwork.


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