Published | Category : Consumption taxes other than GST and QST
Reminder concerning the application of the fuel tax on the sale of butane
For the purposes of the Fuel Tax Act, butane is considered to be gasoline.
The sale of butane is exempt from the fuel tax when sold to a consumer in a container
- used exclusively for supplying the heating system of an immovable; or
- used for any purpose other than supplying an internal combustion engine.
This exemption is applicable only at the time of the retail sale of butane, as it is impossible for the vendor to determine whether the above conditions are met under any other circumstances.
Consequently, the fuel tax does apply to the sale of butane for resale purposes. The holder of a collection officer's permit must report all such butane transactions and collect an amount equal to the tax on these transactions, as with the sale of any other fuel. Information relating to butane should be entered in the fields reserved for gasoline on fuel tax returns.
However, Revenu Québec considers the sale of butane for resale purposes to be exempt from the fuel tax if
- the butane is sold in the same container in which it will be sold to consumers; and
- the container is used exclusively for supplying the heating system of an immovable or for any purpose other than supplying an internal combustion engine.
For example, the sale for resale purposes of butane canisters used for camping purposes is exempt from the fuel tax.