Tax Bulletin FT 1-2006, October 2006

• This bulletin outlines the procedures for claiming a refund of tax paid on clear ultra low sulphur diesel used to flush certain tank truck fuel dispensing systems following a delivery of regular or high sulphur middle distillate fuel.
• The information in this bulletin does not replace the law found in the Fuel Tax Act and related regulations.

Background

Federal Regulations

In order to comply with new federal government regulations limiting the sulphur content of on road diesel fuel sold in Ontario, some hose reel tank truck operators may find it necessary to flush their tank truck dispensing system (manifold, pump, meter and hose reel plumbing) to avoid a higher sulphur content fuel from coming in contact with ultra low sulphur diesel (ULSD).

Refund Available

A refund of fuel tax paid on ULSD used in flushing may be available.  In most cases, a refund is only available if the flush follows delivery of a regular sulphur content fuel and precedes delivery of clear ULSD.

Refund Claim Requirements

Claiming the Refund

In order to claim this refund you must submit to the Ministry of Revenue (ministry):

• a completed Application for Refund - Loss of Product/Overpayment of Tax form and applicable schedule
• a detailed listing of all ULSD flushes done, including the:
  • date
  • truck number
  • quantity of the ULSD used in flushing
  • description of how the ULSD was used for the flush (e.g., ULSD flushed into a previous delivery of coloured fuel)
• proof that an amount on account of tax was paid (e.g., purchase invoice).

Supporting Documents

Applicants must retain adequate delivery records such as declining balance sheets or running volume logs for audit purposes.

Flushes in Excess of 300 Litres

If you require more than 300 litres to adequately flush the dispensing system of a particular tank truck, you must provide proof with your refund application that such volume was required to prevent sulphur contamination, including a written description of the circumstances and equipment details such as hose length, diameter, and dispensing system capacity.

Subject to Audit

All refund claims are subject to audit.  All records, supporting documents and receipts pertaining to your refund claim must be maintained for a period of seven years for audit purposes.

Submitting your Claim

Obtaining a Claim Form

An Application for Refund – Loss of Product/Overpayment of Tax form and applicable schedule may be obtained by phoning the ministry at 1 866 ONT-TAXS (1 866 668-8297).  Each time the ministry processes your refund claim, you will be sent another claim form.

Submitting your refund claims

If line flushing is a regular part of your business practices, we encourage you to submit your claims on a monthly basis.  Claims should be sent to:

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

Credit Interest

Credit interest will be paid on any refunded amount from the date the completed application, including all supporting documentation, is received by the ministry.

Refund Claims under $500 per year

If the total amount of refunds claimed in a calendar year do not exceed $500, supporting documentation need not be submitted with your claims.  However, supporting documentation must be retained for seven years from the date of application for refund, and provided to the ministry upon request.

Time Limit

Refund applications must be received by the ministry within four years from the date tax was paid.  Applications received after four years may be disallowed. 

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 bulletin and various other English and French tax materials 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, 2006

ISBN 1-4249-2160-0