Tax for Fuel Conservation

Tax for Fuel Conservation (TFFC) is a flat tax that applies to certain fuel-inefficient vehicles. TFFC applies to motor vehicles sold, leased or rented in Ontario or imported for use in Ontario.

TFFC applies to new

• Passenger vehicles using 6.0 or more litres
• Sport utility vehicles using 8.0 or more litres

of gasoline or diesel fuel per 100 kilometres of highway driving.

TFFC does not apply to:

• all-terrain vehicles and motorcycles
• any vehicle shipped by a seller to a point outside Ontario for permanent use outside the province
• any vehicle sold to a non-resident dealer who removes the vehicle from Ontario
• competition cars and reproduction antique cars
• passenger or sport utility vehicles brought into Ontario as settler's effects

Tax Rates

Please refer to the TFFC Listings for current TFFC tax rates.

Reporting and Remitting

Under the Retail Sales Tax Act, vendors who sell or rent/lease new vehicles must:

• show the TFFC separately on sales invoices or rental/lease documents
• maintain separate records of the TFFC and 8 per cent Retail Sales Tax (RST) for audit purposes
• report the TFFC, combined with the 8 per cent RST, on line 2 of their Ontario RST returns and remit the total of these taxes to the Minister of Finance.

Vendors must also account for the TFFC on vehicles taken from inventory for business or personal use by staff, family or others.

Legislation

Subsection 4(1) of the Ontario Retail Sales Tax Act (the Act) imposes a TFFC on purchasers of certain new passenger vehicles and sport utility vehicles.

Subsection 4(2) of the Act defines a passenger vehicle and sport utility vehicle to mean a vehicle or type of vehicle to be determined by the minister, and in respect of which the minister determines that a highway fuel consumption rating of 6.0 or more litres of gasoline or diesel fuel per 100 kilometres applies.

Subsection 4(10) of the Act requires that every manufacturer or importer of passenger vehicles or of sport utility vehicles provide to the minister such information as the minister prescribes to permit the minister to determine the highway fuel consumption rating for any such vehicle having a highway fuel consumption rating of 6.0 or more litres of gasoline or diesel fuel per 100 kilometres.

Additional Information

New vehicles purchased outside Ontario and brought into Ontario for personal use are subject to both the applicable TFFC and the 8 per cent RST.  These two taxes must be paid at a Driver and Vehicle Licence Issuing Office when the car is first registered in Ontario.

• Vehicles purchased by non-residents and removed within 30 days may claim a refund for the Tax for Fuel Conservation when applying for the Retail Sales Tax refund.  See the General Application for Refund of Retail Sales Tax.

TFFC becomes part of the taxable value of new vehicles bought or leased in Ontario, or imported for use in this province, before calculating the 8 per cent RST and the 6 per cent federal Goods and Services Tax (GST).  TFFC is paid to the vehicle dealer at the time of purchase.