Information for on-reserve retailers who sell tax-exempt gas

Learn about how to submit your gasoline tax refund claim for sales of tax-exempt gas to First Nation individuals, bands, Tribal Councils or band-empowered entities.

Overview

Beginning January 1, 2020, the Ontario Gas Card will be discontinued.

Authorized on-reserve gasoline retailers should not charge Ontario gasoline tax to a purchaser who presents an Ontario-issued exemption certificate or their Certificate of Indian Status (Status Card), which includes the:

• laminated Certificate of Indian Status Card with no renewal date
• Secure Certificate of Indian Status Card
• Temporary Confirmation of Registration Document

Retailers should visually confirm that the Status Card belongs to the purchaser, unless it is a child using their parent’s Status Card.

Purchasers may use current Ontario Gas Cards until midnight, January 31, 2020.

Authorized on-reserve retailers pay the Ontario gasoline tax when purchasing gasoline from their bulk suppliers. Retailers can apply to the ministry for a refund of the gasoline tax on tax-exempt gas sold to qualifying First Nation purchasers.

Refund direct deposit information

Get a Ministry of Finance refund faster with direct deposit. It's easy and secure. Download the direct deposit authorization form and mail your refund application package to:
Ministry of Finance
33 King Street West
PO Box 625
Oshawa, Ontario
L1H 8E9

If you need more information or assistance, contact the Ministry of Finance by:

• phone: 1-866-ONT-TAXS (668-8297)
• email: commodity.tax@ontario.ca.  

Read frequently asked questions for retailers

Electronic vouchers

At the time of purchase

Step one: create an electronic voucher

Enter the Status Card or exemption certificate number and quantity of gasoline sold into your point-of-sale device to create an electronic voucher.

For the period from January 1 to January 31, 2020, if a purchaser is using the Ontario Gas Card, you must create a paper voucher. On the paper vouchers, substitute the Ontario Gas Card number for the Status Card or exemption certificate number.

To request a supply of paper vouchers, contact the Ministry of Finance by:

• phone: 1-866-ONT-TAXS (668-8297)
• Email: commodity.tax@ontario.ca 

Step two: validate a Status Card or exemption certificate number

The point-of-sale device will indicate whether the Status Card or exemption certificate number is valid.

If the Status Card number or exemption certificate number cannot be validated by electronic-service (e-service), you may call the:

• Indigenous Services Canada (ISC) Validation Line at 1-877-825-4338 (this service is only available for the Secure Certificate of Indian Status)
• Ministry of Finance at 1-866-668-8297 during ministry business hours (8:30 a.m. to 5 p.m., Monday to Friday) to verify if the exemption certificate number is valid

If a retailer chooses to accept the number without validation, complete a paper voucher to process the tax-exempt sale.

Step three: print and sign the slip

The point-of-sale device will print a duplicate slip that must now be signed by the retailer, not the purchaser. You must:

• keep the original, signed slip
• give a copy of the slip to the purchaser

The vehicle licence plate information is not required.

If you cannot give a tax exemption

If you cannot give the purchaser a tax exemption, you must provide a sales receipt showing the gasoline tax charged.  

How to select an electronic service provider

The Ministry of Finance accepts electronic vouchers from authorized on-reserve retailers for gasoline tax refunds of tax-exempt sales to First Nation individuals, bands, Tribal Councils or band-empowered entities.

As a retailer, you may select an e-service provider (or act as your own service provider) that meets the following ministry requirements:

• The retailer will enter into an agreement with the e-service provider, at the retailer's expense.
• The e-service provider must be authorized by the retailer to submit electronic refund claims for that retailer. To provide this authorization, the retailer must submit a completed Authorizing or Cancelling a Representative form.
• The retailer and e-service provider will arrange for the equipment needed to electronically transfer refund claims to the ministry. The equipment is provided at the retailer's expense.

Getting an electronic voucher gasoline tax refund

When an electronic voucher is created using the point-of-sale device, the service provider will send the electronic refund claim to the ministry. Electronic refund claims cannot be submitted to the bulk fuel supplier for a credit.

The retailer is required to submit gasoline purchase invoices in support of refund claims and proof of payment for gasoline purchases to the ministry on the 15th and 30th of every month by mail, courier or fax.

Purchases of aviation fuel or propane cannot be processed using e-service, and must use paper vouchers.

Paper vouchers

At the time of purchase

Step one: confirm information is clear and accurate

Ensure that the information on the purchaser’s Status Card or exemption certificate is clearly marked on all paper vouchers, including:

• retailer’s information (name and authorization number)
• date of sale
• number from the:
  • Certificate of Indian Status
  • Secure Certificate of Indian Status
  • Temporary Confirmation of Registration Document
  • Ontario-issued exemption certificate
• total cost of the sale including tax as recorded at the pump
• total litres purchased
• tax per litre
• net cost to purchaser (multiply the total litres purchased by tax per litre to determine the amount to be deducted from the sale to purchaser)

Step two: sign voucher and provide copy to purchaser

You must sign the voucher and provided the bottom copy of the voucher to the purchaser for their records.

Getting a paper voucher gasoline tax refund

To apply for a refund:

1. Download and review the required instructional guide:
   • Tax Exempt Sales to First Nations Individuals and Bands on a Reserve for their Exclusive Use
   • Tax Exempt Deliveries, in Bulk, to First Nations Individuals and Bands on a Reserve for their Exclusive Use
2. Download and complete the Application for Refund Tax Exempt Sales (TES).
3. Include purchase invoices and proof of payment from the bulk gasoline supplier and attach hard copies of all signed vouchers in bundles of 200 or fewer. Documentation (or calculator tapes) showing the total litres of gasoline sold must be attached to each bundle.
4. Match signed vouchers with the bulk suppliers’ purchase invoices before submitting them with each refund claim application form.
5. Spoiled vouchers must be marked “NIL” and attached to the refund claim application form along with the other vouchers.
6. If you operate more than one gasoline retail location, you must submit a separate refund claim application form each location.
7. Keep a copy of all records.

Retailers' responsibilities

Authorized on-reserve gasoline retailers are responsible for completing all forms and vouchers accurately and supporting each claim with copies of the vouchers issued for the claim period. Copies of paper vouchers are still required for gasoline tax refund claims filed manually.

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.

Claim discrepancies

The ministry will verify each authorized gasoline retailer's claim. If a discrepancy is noted, the ministry will contact the retailer to request additional information before rejecting the claim. 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.

Ministry verification

During the verification process, ministry staff will review claims and vouchers for duplicate transactions and large or unusual volume purchases.

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

Keep accurate records and receipts

You must keep copies of all records used to support gasoline tax refund claims for seven years. If you are selected for an audit by the ministry, the auditor may require these records to verify the claims.

If a retailer does not keep adequate records and books of account for the required length of time, you:

• are guilty of an offence
• if convicted, are liable to a fine of $50 for each day that the default occurs or continues

Procedures for recovering the tax from a collector

Credit claimed from the collector

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. 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

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

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

1. The bulk distributor may obtain reimbursement by forwarding to the Ministry of Finance a completed Application for Refund (Summary) Tax Exempt Sales - 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

1. The collector should verify that the retailer is authorized by the Ministry of Finance..
2. The collector may list all tax-exempt sales on Schedule FTG5 and enter the total sales on Line 10 of the Generic Collector Summary for Gasoline and Related Products Return.
3. 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).
4. Keep the forms and supporting copies of vouchers and forward to the Ministry of Finance when requested.

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

Contact us

For further information, contact the Ministry of Finance by:

• phone: 1-866-ONT-TAXS (668-8297)
• email: commodity.tax@ontario.ca. 
• mail:

Ministry of Finance
33 King Street West
PO Box 625
Oshawa, Ontario
L1H 8E9

Related

Discontinuing the Ontario Gas Card (download the poster)

Frequently asked questions (for on-reserve gasoline retailers)

Indigenous Services Canada