Fuel Tax Reporting

Power Take Off Auxiliary Equipment

The Act provides for refunds of the tax paid on gasoline used in Ontario to operate power takeoff (PTO) auxiliary equipment of a motor vehicle. In cases where a fuel meter measures the quantity of fuel supplied to PTO equipment, readings from this meter are used to calculate the tax refund amount. Otherwise, refund claimants calculate PTO tax refunds on the basis of ministry-approved allowances derived from equipment manufacturers' fuel consumption specifications.

In order for a claimant to be eligible for a PTO tax refund, the following conditions apply:

the PTO equipment must use fuel from the same fuel tank that supplies fuel to the engine propelling the vehicle,
the power from the PTO equipment is not used to propel the vehicle on a highway,
the vehicle is not used for the transportation of passengers or for the pleasure or recreation of the owner or operator,
the PTO refund application and schedules must be filed within four years of the date on which the gasoline tax was paid.

For interjurisdictional carriers, PTO refunds are proportionate to travel in Ontario.

Tax Rates

The Act imposes a tax on a purchaser at the rate of: 14.7 cents per litre of unleaded gasoline.

Tax Refund for Power Takeoff Equipment

Power Takeoff (PTO) equipment refers to auxiliary equipment of a licensed motor vehicle that uses fuel (clear diesel fuel, gasoline and propane) from the vehicle’s fuel tank(s). Examples of PTO equipment include:

cement mixers
aerial buckets, lifts and cranes
refrigeration units
power vacuums, pumps and blowers
If you paid tax on fuel used in Ontario to operate PTO equipment, you may qualify for a refund.

Do I qualify for a Power Takeoff tax refund?

To qualify for a PTO tax refund, you have to meet all these conditions:

you use the PTO equipment in Ontario;
the PTO equipment uses fuel from the licensed vehicle’s operating fuel tank
the power from the PTO equipment does not propel the motor vehicle
you do not use the motor vehicle in any way to transport passengers
you do not use the PTO equipment for personal use, pleasure or recreation
you paid fuel tax to Ontario

You must apply for a refund within 4 years of paying the fuel tax.

Can I claim a refund if I am licensed under the International Fuel Tax Agreement?
Yes, if you meet all the conditions listed above. However, the amount of your refund will be based on the ratio of your Ontario travel to the total distance travelled. Please refer to Tax Bulletin Ontario Tax Bulletin FT/GT 4-2000 Power Takeoff Tax Refunds for Interjurisdictional Carriers Licenced under the International Fuel Tax Agreement for details.

How do I determine the PTO fuel consumption?
You may determine the fuel used to operate your PTO equipment using either:
readings from separate fuel metering devices that measure the fuel supplied to the PTO equipment, or set allowances approved by the ministry for different kinds of PTO equipment, based on information from equipment manufacturers.
Please contact the ministry to confirm if there is a ministry-approved allowance for your equipment.

How to apply?
Contact the ministry for an application package.
For refunds over $500: Complete and send in an application. Make sure you send the required supporting documents. You must keep all records for 7 years for audit purposes.
For refunds under $500: Complete and send your application. No supporting documents are required, but you must keep them for audit purposes.

REPORTING REQUIREMENTS

The ministry will send a fuel tax return to you at least 30 days before each due date

Reporting One Fuel Type
If you told the ministry that you use only one type of fuel to power your qualified motor
vehicles, you will receive an IFTA Quarterly Tax Return - IFTA 501 form accompanied by
the corresponding guide. See sample of form on page 27.

Reporting More Than One Fuel Type
If you told the ministry that you use more than one type of fuel to power your qualified
motor vehicles, you will receive a tax return which includes an IFTA Quarterly Tax Return
Summary - IFTA 503 form and one IFTA Quarterly Fuel Schedule - IFTA 511 for each fuel
type accompanied by the corresponding guide. Schedules must be filed for each fuel
type. See sample forms on pages 29 and 30.

Once you obtain decals and put them on your qualified motor vehicle(s), you are
required to report all travel of the vehicle(s) on your IFTA return for as long as the IFTA
decals are in effect. You are not permitted to exclude the travel on a fluctuating basis
within the same year.

If your operations change during the year, please notify the ministry so that you will be
mailed the appropriate fuel tax return and schedules. If you do not receive your fuel tax
return form, it remains your responsibility to file a return by the due date. Please contact
the ministry if you do not receive the fuel tax return so that one may be sent to you.
You must file a complete fuel tax return each quarter even if you did not operate your
vehicles in any IFTA jurisdiction or purchase any taxable fuel during the quarter.

A complete fuel tax return includes:

the IFTA 501 form with both back and front completed, or
the IFTA 503 form and one IFTA 511 schedule for each fuel type used by your qualified motor vehicles during the quarter, and payment for any taxes due.
A guide with detailed instructions for completing IFTA 501, 503 and 511 forms is provided with the forms.

Non-Standard Returns
Prior approval is required if you use self-created or software-produced versions of the
IFTA schedules which must provide a facsimile of the IFTA schedule. You must send a
copy of your form to the Ministry of Revenue for approval to ensure it meets all of the
requirements before you can use your own version.
Note: Fuel and distance must be reported on the fuel tax return in litres
and kilometres.

If you need to correct a prior fuel tax return, please contact the ministry for a blank
return for that reporting period.

Check the box marked ‘Amended Return’ on your fuel tax return.
Ensure the reporting period dates reflect the period you are correcting.
Fully complete the return with the correct information.
Sign and date the return.

Quarterly fuel tax returns must be postmarked or hand delivered by the due date shown on the top of every fuel tax return. If the due date falls on a Saturday, Sunday or a statutory holiday, the next business day is the due date. The reporting quarters and due dates are:

IFTA Reporting Quarter Return Due Date
1st Quarter - January to March April 30
2nd Quarter - April to June July 31
3rd Quarter - July to September October 31
4th Quarter - October to December January 31

If your fuel tax return is late or full payment is not received, you will be subject to penalty and interest provisions. Failure to file a return with the ministry may result in your licence being revoked.

You must report fuel usage and distance travelled in kilometres and litres

You must keep a complete record of all fuel purchased, received, and used in the operation of your vehicles. This includes proof of taxable and non-taxable fuel use. Separate totals must be calculated for each fuel type.

All original fuel receipts or invoices must include:

date of fuel purchase
seller’s name and address
number of litres purchased
fuel tax paid on number of litres
type of fuel
price per litre or total amount of fuel sale
unit numbers of the vehicles in which the fuel was placed
purchaser’s name - for contract or rental agreement, receipts will be accepted as long as the name on the contract provides a legal connection to the reporting party
amount of fuel purchased while travelling under a single trip permit - you are required to keep a copy of your single trip permit.

Record Keeping Requirements
Keep a copy of the contract agreement indicating the party responsible for reporting and paying the motor fuel use taxes. Refer to section Contract Agreements on page 8 for details on who is responsible for reporting.
Acceptable fuel receipts include an invoice, credit card receipt, microfilm/microfiche of the original invoice, automated vendor-generated invoices or transaction listings. Supplier’s statements are not acceptable fuel receipts. Altered receipts will not be accepted.