Published: September 2011
Content last reviewed: September 2011
ISBN: 978-1-4249-7502-0 (Print), 978-1-4249-7504-4 (PDF), 978-1-4249-7503-7 (HTML)
Ontario legislation applies gasoline tax at a rate of 14.7 cents per litre of gasoline. Qualified First Nations bands and individuals are exempt from paying this tax if they buy gasoline on a reserve for their exclusive use from an authorized on-reserve gasoline retailer.
First Nations bands and individuals registered under the Indian Act as “Status Indians” are entitled to purchase gasoline on a reserve for their exclusive use exempt from tax in the circumstances prescribed by the Gasoline Tax Act and described in this tax bulletin.
Only those on-reserve gasoline retailers that are authorized by the Ministry of Finance may sell tax-exempt gasoline to qualified First Nations bands and individuals. For the purposes of this bulletin, “retailer” means an authorized on-reserve gasoline retailer.
The ministry is committed to ensuring that qualified First Nations bands and individuals can purchase tax-exempt gasoline according to the provisions of the Gasoline Tax Act. The ministry must also ensure that compliance measures are in place, so that an exemption from payment of Ontario's gasoline tax is granted only to persons who are entitled.
Upon application, the ministry provides each eligible First Nations band or individual with a "Certificate of Exemption," commonly referred to as a "gas card."
All of the following conditions must be met for gasoline to be sold tax-exempt to First Nations bands and individuals. The gasoline must be:
The Ministry of Finance has introduced an optional electronic service (e-service) that accepts electronic vouchers from retailers for gasoline tax refunds of tax-exempt sales to First Nations bands and individuals.
The retailer and service provider will arrange for the equipment needed by the retailer to electronically transfer refund claims to the ministry. The equipment is provided to the retailer at the retailer's expense.
The procedures described below are to be followed for every purchase of tax-exempt gasoline by a First Nations band or individual from a retailer using electronic vouchers.
If the gas card cannot be validated by e-service, the purchaser will not receive tax-exempt gasoline at the point of sale. The retailer should:
Purchases of aviation fuel or propane cannot be processed using e-service. Paper vouchers must continue to be used for these purchases. For further information, please refer to Tax Bulletin GT 2-2011 Authorized On-Reserve Gasoline Retailers: Paper Voucher Service and Tax-Exempt Sales of Gasoline.
Every retailer, wholesaler, collector or agent must keep, at its principal place of business, records and books of account. This information is to be kept for a period of seven years following the end of the fiscal year to which the records relate.
If a retailer, wholesaler, collector or agent fails to keep adequate records and books of account for the required length of time, the person is guilty of an offence, and on conviction is liable to a fine of $50 for each day that the default occurs or continues.
In some circumstances, it may be necessary for ministry staff to contact the gas card holder to verify whether a large purchase of gasoline was made.
If the quantity of gasoline purchased is greater than an amount that could reasonably fill a car or truck, or, if a gas card is used to purchase large volumes of gasoline over a short time period through a number of separate purchases, the purchaser will be asked by the retailer to provide his or her phone number in order to verify these purchases.
If a purchaser intends to purchase high volumes of gasoline on a regular basis, please contact the ministry for further information.
Authorized on-reserve gasoline retailers are responsible for completing all forms accurately, and, as determined by voucher type, support each claim with copies of the vouchers issued for the claim period. For gasoline tax refund claims filed electronically, all supporting documentation, including electronic vouchers, are sent electronically to the ministry through the third party service provider. Copies of paper vouchers are still required for manually submitted gasoline tax refund claims. For further information, please refer to Tax Bulletin GT 2-2011 Authorized On-Reserve Gasoline Retailers: Paper Voucher Service and Tax-Exempt Sales of Gasoline.
The ministry will verify each authorized on-reserve gasoline retailer's claim. If a discrepancy is noted, the ministry will contact the claimant before rejecting the claim to allow the claimant to provide additional information. If a satisfactory explanation is not provided, the claimant will be issued a Statement of Disallowance and the refund, or part refund, will be denied.
During the verification process, ministry staff will review claims and vouchers for duplicate transactions and large or unusual volume purchases based on vehicle type.
The ministry may contact authorized on-reserve gasoline retailers, purchasers, suppliers, service providers and authorized representatives for additional information.
If this bulletin does not completely address your particular situation, refer to the Gasoline Tax Act and related regulations, visit our website at ontario.ca/finance or contact:
Ministry of Finance
Client Services Branch
Motor Fuels and Tobacco Tax Refunds Unit
33 King Street West
Oshawa, ON L1H 8H9