Authorized On-Reserve Gasoline Retailers: Paper Voucher Service and Tax-Exempt Sales of Gasoline

Published: January 2017
Content last reviewed: January 2017

  • This page provides information on the paper voucher service and the treatment of tax-exempt sales of gasoline to First Nations bands and individuals on a reserve.
  • This page provides general information. It is not exhaustive and should not be considered as a substitute for the Gasoline Tax Act and its regulations.
  • For information on the optional electronic service (e-service), refer to Authorized On‑Reserve Gasoline Retailers: E‑Service and Tax‑Exempt Sales of Gasoline.

Rate of tax and exemption

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.

Who qualifies for the exemption?

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 on this page.

Who can sell tax‑exempt gasoline?

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 page, retailer means an authorized on‑reserve gasoline retailer.

Role of the Ministry of Finance

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.

Gas card

Upon application, the ministry provides each eligible First Nations band or individual with a Certificate of Exemption, commonly referred to as a gas card.

Tax‑exempt sales of gasoline to First Nations individuals on a reserve

What qualifies as a tax‑exempt sale?

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:

  • purchased by the holder of a valid gas card
  • for the exclusive use of the purchaser and not for resale
  • dispensed from the pump of an authorized on‑reserve gasoline retailer; or delivered to the storage facility of a qualified First Nations band or individual on the reserve by an authorized bulk distributor.

Procedures for selling tax‑exempt gasoline

The procedures described below are to be followed for every sale of tax‑exempt gasoline to a First Nations band or individual from a retailer when using paper vouchers.

Action by purchaser

  • At the time of the sale, the purchaser will present his or her gas card to the retailer so the card may be placed in the imprinter to imprint a voucher.
  • Upon receipt of the gasoline, the purchaser will sign the imprinted paper voucher, completed as set out below under Voucher details and presented by the retailer, to confirm the quantity purchased and the amount of the tax exemption.
  • If the purchaser is a First Nations individual residing in Ontario, his or her Ontario gas card must be used to purchase tax‑exempt gasoline.

Action by retailer

When a First Nations band or individual presents his or her gas card to purchase tax‑exempt gasoline, the retailer will prepare a paper voucher at the time of sale (each voucher must cover only one sale). Gasoline tax should not be charged or collected on the sale of tax‑exempt gasoline.

Voucher details

The following information must be clearly marked on all vouchers:

  • an imprint of the information on the gas card
  • the date of sale
  • the retailer's operating or trade name
  • the ministry reference number as shown on the retailer's letter of authorization
  • the total cost of the sale as recorded on the pump, including any amount of tax
  • the number of litres of gasoline purchased
  • the net cost to the purchaser
  • the purchaser's signature.

The vehicle licence plate information is not required.

The purchaser's phone number is required when large volumes of gasoline are purchased. For instance, 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, you will be asked by the retailer to provide your phone number in order to verify these purchases.

Voucher distribution

The retailer will give a copy of the paper voucher to the purchaser, keep the Dealer File Copy for record purposes (for a minimum of seven years), and use the Dealer Refund Copy when recovering or accounting for the tax exemption allowed.

Vouchers for retailer's use

Vouchers supplied to the retailer are for their specific use only and are not to be given to another retailer without the express written permission of the ministry.

Spoiled vouchers

DO NOT destroy spoiled vouchers. Write NIL clearly on the face of all spoiled vouchers and forward them with your next completed refund claim.

Procedures for recovering the tax from the Ministry

Basis for refund

Retailers purchase gasoline with Ontario gasoline tax included from their bulk suppliers and make tax‑exempt sales to qualified First Nations bands and individuals. Retailers are then reimbursed the amount of tax exemption allowed to qualified First Nations purchasers.

Newly authorized retailers

All newly‑authorized on‑reserve gasoline retailers are required to submit refund claims directly to the ministry in order to ensure compliance with the requirements contained in their authorization letter.

Procedures for retailers

  • Complete a claim form Application for Refund Tax Exempt Sales (TES). An initial application form is supplied to the retailer with their authorization letter.
  • Include purchase invoices and attach the hard copy of all vouchers in bundles of 200 or less. Calculator tapes showing the total number of litres sold must be attached to each bundle.
  • Spoiled vouchers are to be marked "NIL" and attached to the claim with the other vouchers.
  • If the authorized on‑reserve gasoline retailer operates more than one location, a separate claim will be required for vouchers issued at each location.
  • Supporting vouchers and purchase invoices must be submitted with the refund claim.

Verification of claims when recovering tax from the Ministry

Retailers' responsibility

Retailers are responsible for completing all forms accurately and supporting each claim with copies of the vouchers and purchase invoices issued for the claim period before sending to the ministry.

Claim discrepancy

The ministry will verify each retailer's claim. If a discrepancy is noted, the ministry will contact the claimant before rejecting the claim to allow the retailer to provide additional information. In some cases the application and supporting documentation may be returned to the retailer for proper completion and resubmission. If a satisfactory explanation is not provided, the retailer will be issued a Statement of Disallowance and the refund, or part refund, will be denied.

The retailer's authorization may be cancelled or suspended for failure to comply with the terms of the authorization.

Ministry verification

During the verification process, the ministry staff will review claims and vouchers for accuracy and completeness, e.g., large or unusual volume purchases based on vehicle type, and vouchers signed by persons other than gas card holders.

The ministry may contact retailers, purchasers, suppliers, service providers and authorized representatives for additional information.

Procedures for recovering the tax from the collector

Credit claimed from the collector

Once tax compliance has been established, retailers may apply to the ministry, in writing, for approval if they want to submit their refund claims directly to their collector for a credit. Not all collectors will handle refund claims from retailers. The ministry may refuse a retailer's request to apply directly to its collector for a refund.

Procedures for retailers

  • Complete an Application for Refund of Gasoline Tax – GT257N (Tax‑exempt sales to First Nations) form, available, as required, from the ministry.
  • Include purchase invoices and attach the hard copy of all vouchers in bundles of 200 or less. Calculator tapes showing the total litres sold must be attached to each bundle.
  • Spoiled vouchers are to be marked NIL and attached to the claim with the other vouchers.
  • If the retailer operates more than one location, a separate claim will be required for vouchers issued at each location.
  • Forward the application, the hard copy of all vouchers and gasoline purchase invoices to the collector.

Procedures for authorized bulk distributors located off the reserve who deliver gasoline tax exempt to First Nations individuals on the reserve

  1. The bulk distributor may obtain reimbursement by forwarding to the Ministry of Finance a completed Application for Refund (Claim Summary - TES), Tax Exempt Sales/Export and Application for Refund, Gasoline Schedule 2 - TES, supporting Tax‑Exempt Vouchers and purchase invoices from the supplier.
  2. The Ministry of Finance will review and process the claim and will arrange for a refund cheque to be forwarded to the bulk distributor.

Procedures for collectors

  • The collector should first verify that the retailer is authorized and in good standing before accepting the retailer's claim at face value.
  • The collector may itemize all tax‑exempt sales on Schedule FTG5 and the total sales will be entered on 10 of the Generic Collector Summary For Gasoline and Related Products Return.
  • The forms and supporting copies of vouchers are to be forwarded to the ministry with the collector's return.
  • The collector will deduct an amount equal to the retailer's documented claim for reimbursement of gasoline tax paid from the cost of the next gasoline purchase (invoice).

Verification of claims when recovering tax from a collector

Retailers' responsibility

Retailers are responsible for completing all forms accurately and supporting each claim with copies of the vouchers and purchase invoices issued for the claim period before sending to the collector.

Claim discrepancy

The ministry will verify each retailer's claim. If a discrepancy is noted, the ministry will contact the collector before rejecting the claim to allow the collector to provide additional information. If a satisfactory explanation is not provided, the collector will be assessed the tax, interest and penalties as appropriate.

The retailer's authorization may be cancelled or suspended for failure to comply with the terms of the authorization.

Failure to pay tax

Failure to pay the tax in the required time will result in the retailer or the collector's agent being required to submit future claims directly to the ministry, rather than with suppliers.

Ministry verification

During the verification process, the ministry staff will review claims and vouchers for accuracy and completeness, e.g., large or unusual volume purchases based on vehicle type, and vouchers signed by persons other than gas card holders.

The ministry may contact retailers, purchasers, suppliers, service providers and authorized representatives for additional information.

Record keeping requirements

Records kept for 7 years

Every retailer and collector 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.

Failure to keep records

If a retailer or collector 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.

Purchases of large volumes of gasoline

Verification

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.

Contact information

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.

On‑going purchases

If a purchaser intends to purchase high volumes of gasoline on a regular basis, please contact the ministry for further information.

Additional information

If this page 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
33 King Street West
Oshawa ON L1H 8H9

  • 1‑866‑ONT‑TAXS (1‑866‑668‑8297)
  • Fax: 905‑433‑5680
  • 1‑800‑263‑7776 for teletypewriter (TTY)
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