Tobacco Tax Collection and Remittance

This section provides information for consumers, manufacturers and vendors on tobacco tax collection and remittance obligations.

How is Tobacco Tax collected?

At the inventory distribution/sale stage of the supply chain, tobacco wholesalers must collect tobacco tax from tobacco retailers.

How do consumers pay Tobacco Tax?

Tobacco tax is included in the price of tobacco paid by consumers. Tobacco retailers are reimbursed for the tobacco tax paid to tobacco wholesalers by collection of the tax from consumers.

How is Tobacco Tax remitted to the province?

Tobacco wholesalers must file a Registered Wholesale Vendors’ Tobacco Return (525 Kb) and remit the tobacco tax owing to the province on a monthly basis.

Wholesale vendors may elect to calculate the tax owing by either the Sales Method or the Purchase Method as provided on the Registered Wholesale Vendors’ Tobacco Return (525 Kb) form.

The filing and remittance deadline is 15 days after the end of the period covered by the return, even if no tax is payable.

How do tobacco retail vendors apply for a refund of tobacco tax?

When retailers of tobacco products believe:

  • tobacco tax has been paid in error (where no tax should apply), or
  • an excess amount of tobacco tax has been paid,

they may request a refund of Tobacco Tax under provisions of the Revenue Administration Act using the Request for Refund of Tobacco Tax form. This form must clearly specify the reason(s) supporting the tax refund request and all original invoices, receipts and supporting documentation pertaining to the refund request must be attached.

How do tobacco manufacturers or tobacco wholesale vendors apply for a refund of tobacco tax?

When wholesalers and manufacturers of tobacco products believe:

  • tobacco tax has been paid in error (where no tax should apply), or
  • an excess amount of tobacco tax has been paid,

they may request a refund of Tobacco Tax under provisions of the Revenue Administration Act using the Request for Refund of Tobacco Tax form. This form must clearly specify the reason(s) supporting the tax refund request and all original invoices, receipts and supporting documentation pertaining to the refund request must be attached or, as part of the Registered Wholesale Vendor's Tobacco Return (525 Kb) supporting documentation, they may include adjustments to the Tobacco Tax payable.

How does a tobacco wholesaler implement a tobacco tax increase?

Tobacco wholesalers must collect the new rates of tax on all sales or deliveries effective 12:01 a.m. on the date of the tobacco tax increase. If a wholesaler has invoiced the old rate of tax for sales or deliveries after that time, the wholesaler is required to issue an adjusting invoice for the additional tax.

Tobacco wholesalers who maintain tax paid inventories must calculate and remit tobacco tax on their tobacco inventory on-hand in the event of a tobacco tax increase using the following procedures:

  • A wholesaler’s tobacco inventory on-hand at the time of a tobacco tax increase includes:
    • All tobacco inventory at the wholesaler’s place of business at the close of business on the day immediately preceding the date of any tobacco tax increase;
    • All tobacco inventory under the control of the wholesaler at the close of business on the day immediately preceding the date of any tobacco tax increase;
    • All tobacco inventory invoiced to a tobacco retailer with an invoice date on or after the date of any tobacco tax increase, when this inventory was in transit at the close of business on the day immediately preceding the date of any tobacco tax increase.
  • Tobacco wholesalers must calculate the additional tobacco tax due on their tobacco inventory on-hand at the time of a tobacco tax increase.
  • The additional tobacco tax must be reported on a Tobacco Tax Self-declaration form that will be made available at the time of the tobacco tax increase.
  • The Tobacco Tax Self-declaration form must be filed and the additional tobacco tax paid within 15 days of the date of the tobacco tax increase. 

How does a tobacco wholesaler implement a tobacco tax decrease?

Tobacco wholesalers are required to collect the new rates of tax on all sales and deliveries effective 12:01 a.m. on the date of the tax decrease. If a wholesaler has invoiced the old rate of tax for sales or deliveries after that time, the wholesaler is required to issue an adjusting invoice with the new tax rates.

Tobacco wholesalers who maintain tax paid inventories may calculate the tobacco tax refund due on their inventory on-hand, excluding cigars, at 12:01 a.m. on the date of the tax decrease using the following procedures:

  • A wholesaler’s tobacco inventory on-hand at the time of a tobacco tax decrease includes:
    • All tobacco inventory at the wholesaler’s place of business at the close of business on the day immediately preceding the date of any tobacco tax decrease;
    • All tobacco inventory under the control of the wholesaler at the close of business on the day immediately preceding the date of any tobacco tax decrease;
    • All tobacco inventory invoiced to a tobacco retailer with an invoice date on or after the date of any tobacco tax decrease, when this inventory was in transit at the close of business on the day immediately preceding he date of any tobacco tax decrease.
  • Tobacco wholesalers may calculate the tobacco tax refund due on their tobacco inventory on-hand at the time of a tobacco tax decrease.

The tobacco tax refund must be reported on a Request for Refund of Tobacco Tax form that will be made available at the time of the tobacco tax decrease.

  • The Request for Refund of Tobacco Tax form must be filed out and returned within 30 days of the tobacco tax decrease. 

All refunds will be processed using Electronic Funds Transfer (EFT).

How does a tobacco retailer implement a tobacco tax increase?

Tobacco retailers are required to calculate and report the additional tobacco tax due on their tobacco inventory. 

Tobacco inventory includes the following items:

  • cigarettes;
  • tobacco sticks;
  • fine cut tobacco;  and
  • other tobacco products except cigars under the control of the retailer.

Tobacco retailers are required to calculate the additional tobacco tax due on their tobacco inventory on-hand at the time of a tobacco tax increase using the following procedures:

  • A retailer’s tobacco inventory on-hand at the time of a tobacco tax increase shall include:
    • All tobacco inventory at the retailer’s place of business at the close of business on the day immediately preceding the date of any tobacco tax increase; 
    • All tobacco inventory under the control of the retailer (inventory in store display areas, store rooms and any other location where tobacco products are stored) at the close of business on the day immediately preceding the date of any tobacco tax increase;
    • All tobacco inventory invoiced by a wholesaler to the retailer before the date of any tobacco tax increase, when this inventory was received by the retailer on or after the date of any tobacco tax increase and tobacco tax was charged at the old rate.
  • Tobacco retailers must calculate the additional tobacco tax due on their tobacco inventory on-hand at the time of a tobacco tax increase.
  • The additional tobacco tax must be reported on a Tobacco Tax Self-declaration form that will be made available at the time of the tobacco tax increase.
  • The Tobacco Tax Self-declaration form must be filed and the additional tobacco tax paid within 15 days of the date of the tobacco tax increase. 

How does a tobacco retailer implement a tobacco tax decrease?

Tobacco retailers may calculate and the tobacco tax refund due on their tobacco inventory on-hand, excluding cigars, at 12:01 a.m. on the date of the tax decrease.

Inventory on-hand includes all cigarettes, tobacco sticks, fine cut tobacco and other tobacco products except cigars under the control of the retailer and includes inventory in store display areas, store rooms and any other location where tobacco products are stored.

The tobacco tax refund must be requested using a Request for Refund of Tobacco Tax form that will be made available at the time of the tobacco tax decrease.

The Request for Refund of Tobacco Tax form must be filed out and returned within 30 days of the tobacco tax decrease.

All refunds will be processed using Electronic Funds Transfer (EFT).

Are Tobacco Tax Self-declaration and Request for Refund of Tobacco Tax submissions audited when there is a tobacco tax increase or decrease?

Random wholesaler and retailer audits are completed to ensure compliance with self-declaration and refund procedures in the event of tax rate change. 

How are tobacco wholesalers and retailers informed of changes to Tobacco Tax collection or remittance requirements?

A formal Tobacco Tax Notice – Collection and Remittance is produced and posted on our website whenever there is important information regarding collection and remittance to be communicated to tobacco tax manufacturers, wholesalers and retailers on collection or remittance. If applicable, notices are also forwarded by email and/or mail to respective tobacco tax manufacturers, wholesalers, and retailers.

 

Disclaimer: This page is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this page and the statutes, the statutes shall prevail.
Published date: 
April 5, 2017
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Taxation and Property Records
1st Floor Shaw South, 95 Rochford Street
PO Box 2000
Phone: (902) 368-4070
Fax: (902) 368-6164

taxandland@gov.pe.ca