Tax Bulletin FT 1-2003, September 2003

This bulletin announces an increase in the power take-off fuel tax refund allowance to 30 per cent of clear fuel consumed by ready mixed concrete trucks. The new allowance is effective October 1, 2003.

The information in this bulletin does not replace the law found in the Fuel Tax Act (Act) and related Regulations.

Definition

Power Take-off

"power take-off (PTO)" means an application where concrete is mixed and delivered by auxiliary equipment attached to a motor vehicle and where the power necessary for that function is derived from additional fuel consumed by the same engine which operates the motor vehicle.

Legislation

Minister May Refund Tax Paid

The Minister may refund the tax paid on clear fuel used to operate auxiliary equipment of a motor vehicle to which a number plate is attached as required under the Highway Traffic Act, if

• the use of the auxiliary equipment occurs in Ontario;
• the auxiliary equipment is powered using fuel from the same fuel tank that is used to power the propulsion of the motor vehicle;
• the power from the auxiliary equipment is not used to propel the motor vehicle;
• the motor vehicle is not principally used by its owner or operator to transport passengers, whether or not for hire, or for the pleasure or recreation of the owner or operator; and
• it is established to the satisfaction of the Minister that the applicant is entitled to the refund claimed.

Old Allowance

Based on Concrete Delivered

The power take-off refund allowance previously approved for ready mixed concrete trucks was based on 0.8 litres of fuel per cubic metre of concrete delivered. On average, refunds using this allowance equal approximately 25 per cent of fuel consumed.

New Allowance

Thirty Per Cent of Tax-paid Fuel Consumed

Following a review of the old allowance, consideration of the allowances in other jurisdictions, and representations by the Ready Mixed Concrete Association of Ontario (RMCAO), an allowance of 30 per cent of clear fuel consumed has been approved. A percentage basis for the allowance (rather than the old cubic metres of concrete delivered basis) is more equitable in addressing

• the delivery of smaller loads of concrete,
• the delivery of concrete at greater distances,
• the impact on refunds of load restrictions during spring thaw.

Implementation and Records Required

Effective Date October 1, 2003

Effective for fuel disbursed after September 30, 2003, the approved power take-off fuel tax allowance for refunds is 30 per cent of clear fuel consumed by ready mixed concrete trucks.

Fuel Disbursement Records

With refund applications covering periods after September 30, 2003, a summary of fuel disbursement records must be submitted in order to use the new allowance. The summary must be based upon records of fuel disbursement to each ready mixed concrete truck. Such records include fuel disbursements from bulk storage, receipts from retail fuel outlets, and tickets from card lock fuel facilities.

Invoices

As in the past, receipted invoices showing the volume of Ontario tax-paid fuel purchased during the refund claim period must also be submitted.

Transition Period Ends October 1, 2004

To give operators time to begin keeping fuel disbursement records, the ministry will process refund applications using either the old allowance (0.8 litres of fuel per cubic metre of concrete delivered), or the new allowance (30 per cent of clear fuel consumed) for refund applications covering the period October 1, 2003 to September 30, 2004.

Ready mixed concrete PTO refund claims covering periods after September 30, 2004, must be supported by fuel disbursement records.

Records Must Be Kept For Seven Years

Refund claimants are reminded that records, including source documents, must be retained for audit verification, for a period of seven years following the end of the fiscal period to which the records relate.

Additional Information

If this bulletin does not completely address your particular situation, refer to the Fuel Tax Act and related Regulations, or contact the:

Ministry of Revenue
Client Accounts and Services Branch
Refund Programs
33 King Street West
PO Box 625
Oshawa ON  L1H 8H9

• Toll-free: 1 866 ONT-TAXS (1 866 668-8297)
• Fax: 905 436-4511
• Teletypewriter (TTY): 1 800 263-7776

This publication and various other English and French tax bulletins published by the Ministry of Revenue, may be obtained online at ontario.ca/revenue.

The Fuel Tax Act and Ontario's other public statutes and regulations may be obtained online at www.e-laws.gov.on.ca.

© Queen's Printer for Ontario, 2003

ISBN 0-7794-5295-X