Disclaimer: This guide is intended to provide information with respect to wholesalers under the Tobacco Tax Act (the Act). This guide should not be regarded as a replacement of the laws, regulations or administrative documents to which it refers.
Disclaimer: This guide is intended to provide information with respect to wholesalers under the Tobacco Tax Act (the Act). This guide should not be regarded as a replacement of the laws, regulations or administrative documents to which it refers.
The Tobacco Tax is a provincial tax on the purchase or consumption of tobacco products and is administered by the Revenue Administration Division of Finance and Treasury Board. All tobacco products purchased or consumed in New Brunswick are subject to tobacco tax.
The current tax rates are (Effective February 1, 2017):
Note: Tax rates are subject to change. For verification of current tax rates, please contact the Revenue Administration Division at (800) 669-7070 or visit the Finance and Treasury Board Website at www.gnb.ca/finance.
The Tobacco Tax Act (the Act) places the responsibility to pay the tax on the consumer. For simplicity in administration, the tax is collected at the wholesale level. This means that in most cases licensed wholesalers collect an amount equal to the tax on or before delivery of the product to retailers and therefore this tax is included in the price at the point of sale. This process allows for the transfer of the payment of tax to the consumer.
Any person (individual, partnership or corporation) who sells tobacco in the Province for the purpose of resale to other licensed wholesalers and licensed retailers must obtain a Tobacco Wholesaler’s Licence.
Applications for Tobacco Wholesaler Licences may be obtained at any Service New Brunswick (SNB) office or by contacting the Revenue Administration Division of Finance and Treasury Board at:
Finance and Treasury Board
Revenue Administration Division
P. O. Box 3000
Fredericton, New Brunswick
E3B 5G5
Telephone: (800) 669-7070
Fax: (506) 457-7335
The fee for a wholesaler’s licence is $2,000 with an annual renewal fee of $1,500. All wholesaler licences expire on May 31 of each year and must be renewed annually.
Wholesalers (collectors) may be required to provide security before a wholesaler licence is issued. This security may be in the form of a bond, cash or other security satisfactory to the Commissioner.
The amount of the security is based on three (3) to six (6) months tax remittances (minimum of $500,000.00) that would normally be collected by the wholesaler (collector) each month.
Licence Rules
The Minister may refuse to issue any licence if the Minister has reasonable or probable grounds to believe that the applicant has:
The Minister may suspend a licence for a period of time established by regulation if the Minister has reasonable and probable grounds to believe that the licence holder has violated or is failing to comply with the Act or Regulations or with any term or condition of the licence.
Suspensions will be for one calendar month for the first offense. For each subsequent suspension, the suspension will be double the number of months for which that licence was suspended in the previous suspension.
The Minister may revoke any licence if the Minister has reasonable and probable grounds to believe that the licence holder has violated or is failing to comply with the Act or Regulations or with any term or condition of the licence. This is an involuntary cancellation of a licence. Once a licence is revoked, the applicant must reapply and meet all licensing conditions in order to be eligible to sell tobacco products again.
Cancellation of a licence occurs as a result of a business closure and is voluntary on the part of a licence holder. All requests for cancellation must be in writing.
The licence holder must also notify Finance and Treasury Board when they sell their business because a licence cannot be issued to the new proprietor until the previous owner’s tobacco licence has been cancelled.
The Minister may reinstate any licence and may impose any combination of conditions and terms established in accordance with the regulations. For example, the Minister may request that an audit be conducted prior to reinstatement. (A new application must be submitted and the fee paid.)
Purchase Rules:
Sales Rules:
Note: New tobacco wholesalers receive a listing of New Brunswick licensed tobacco retailers and wholesalers. The validity of a wholesaler or retailer licence can also be verified with the Revenue Administration Division at 1-800-669-7070.
All packages, cartons, and cases of cigarettes and tobacco sticks and all packages and cases of loose tobacco purchased for sale in New Brunswick are required to have NB specific markings (indicia).
Effective August 1, 2011, New Brunswick Regulation 84-250 under the Tobacco Tax Act was amended to reflect the changes to tobacco marking requirements resulting from the province’s participation in the federal excise stamping regime.
The regulations provide for a 12-month transition period ending July 31, 2012. During this transition period, tobacco products may be marked with either the new excise stamp or the current provincial tear-tape or paper stamps. This 12-month transition period will allow sufficient time for tobacco product inventories bearing tear-tape or paper stamp markings to be depleted and for the production and distribution of products bearing only the new stamp. After the transition period, all packages of cigarettes, tobacco sticks and loose tobacco sold in New Brunswick must bear the new stamp.
Cigarettes, tobacco sticks or loose tobacco that are marked with only the federal marking of “Canada Duty Paid” on peach colored stamps or tobacco marked for other jurisdictions cannot be sold in the Province of New Brunswick.
Note: Permits to mark tobacco products are restricted to manufacturers.
The Commissioner may issue a permit to a wholesaler who is a manufacturer to mark packages, cartons or cases of cigarettes or tobacco sticks, or packages or cases of loose tobacco where the wholesaler:
Applications for the authorization to mark permit may be submitted with an application for a wholesaler licence, or separately by a previously registered wholesaler. Part V of the tobacco wholesaler application form must be completed and include the following:
Responsibility for Tobacco Marking Materials
Any wholesaler authorized to mark tobacco is responsible for ordering all tobacco indicia and stamps and is responsible to ensure that all tobacco products are marked in accordance with the Regulations (see Marking Regulations).
Possession of Unmarked Tobacco
The Tobacco Tax Act provides for the holder of a wholesaler's licence to purchase, possess, store or sell unmarked cigarettes, tobacco sticks or loose tobacco in New Brunswick if:
Every wholesale (collector) who sells tobacco shall keep and maintain records showing:
Records must be maintained in easily readable paper or electronic format for six years or until such time that authorization is received in writing from the Provincial Tax Commissioner.
Records shall be made available for inspection and audit by an inspector, an auditor or any person designated by the Commissioner upon request at any reasonable time.
Wholesalers (collectors) are required to complete monthly tax returns, including schedules relative to sales and purchases of tobacco.
Due Date:
The returns and payments must be filed with the Province by the twenty-fifth day of the month following the month being reported. If the twenty-fifth day falls on a Saturday, the due date is the previous working day. If the twenty-fifth day falls on a holiday or on a Sunday, the due date is the next working day.
Tobacco wholesalers must select only one of the following methods of tax payment:
Purchase Method
Wholesalers on the purchase method must complete the TTA_11 tax return. For details on tax calculation, see guide TTG_407 - Instructions for the Completion of Tobacco Wholesaler / Collector TTA_11 Tax Return
Sales Method
Tobacco products are purchased exempt of New Brunswick tobacco tax. Tax is remitted monthly on all sales made during the month.
Wholesalers on the sales method must complete the TTA_12 tax return. For details on tax calculation, see guide TTG_408 - Instructions for the Completion of Tobacco Wholesaler / Collector TTA_12 Return.
Note: Changes from one reporting method to another must be pre-approved by the Revenue Administration Division. Approval to change the method of tax payment may require an audit of the wholesaler’s records.
Returns and Instructional Guide
Copies of Tobacco Wholesaler/Collector Tax Returns (TTA_11 or TTA_12) and Instructions for the Completion of Tobacco Wholesaler/Collector Returns (TTG_407 or TTG_408) are available at:
Finance and Treasury Board
Revenue Administration Division
P. O. Box 3000
Fredericton, New Brunswick
E3B 5G5
Telephone: (800) 669-7070
Fax: (506) 457-7335
To claim a refund of tobacco tax in these situations, an application for refund of tobacco tax may be made by completing form TTA_06. The following information must be included with your claim:
Refund claims shall be made within six (6) months after the day on which the substantiated loss occurred.
Overpayment of Tax by Collectors
Licensed wholesalers as collectors receive tax from the taxpayer or collect an amount equal to the tax at the wholesale level. There are instances when errors are made in the calculation of the tax to be remitted. This could result from clerical errors, using the wrong tax rate, applying tax to an exempt item etc.
To claim a refund of an overpayment of tobacco tax, an application for refund may be made by completing form TTA_06. The following information must be included with your claim:
Refund claims must be made within three (3) years from the day on which the overpayment was made.
Tobacco tax is collected and remitted at the wholesale level to simplify the tax collection process. Since the sale to the retailer and subsequently to the consumer is on a tax-included price basis, the Tobacco Tax Act allows for a rebate of the tax when the wholesaler (collector) is unable to collect the tax from a retailer because the retailer is bankrupt or has discontinued the business of selling tobacco.
In such instances, wholesalers may request a refund of the tobacco tax that they have already remitted by submitting an application for Refund of Tobacco Tax (form TTA_06). The following information must be included with the application:
Refund claims must be made within (6) six months after the day on which the tobacco tax was remitted.
If a wholesaler receives payment from a retailer after receiving a refund, the wholesaler must remit the tax or account to the Minister for the tax on the next monthly tobacco tax return to be filed with the Minister.
Under subsections 28 and 29 of the Revenue Administration Act, any appointed officer, auditor, inspector or any other person with the written authority of the Commissioner may enter upon the premises of any person in which any business involving the sale of tobacco is carried on in order to:
The owner, occupier or person in possession or in charge of the premises so entered shall answer all questions relating to any of the matters stated above, and shall produce for inspection such books, records, documents and tobacco products as required.
Administrative Penalties
The following schedule provides information on the administrative penalties that are applicable to wholesalers for violations under the Tobacco Tax Act:
Violation
|
Administrative Penalty
|
Wholesaling without a valid license
|
1st Offence $240 2nd offence $480 3rd & subsequent $5,200
|
Wholesaling to a vendor that does not possess a valid license
|
1st Offence $240 2nd Offence $480 3rd & Subsequent $5,200 |
Failure to keep a record of tobacco sales.
|
1st Offence $140 2nd Offence $280 3rd & Subsequent $1,100 |
Failure to make returns when required.
|
1st Offence $140 2nd Offence $280 3rd & Subsequent $1,100 |
Please note that continued failure to comply with the provisions of the Tobacco Tax Act and regulations is cause for a wholesaler’s licence to be revoked.
The Department will not renew a licence where a wholesaler has any of the following:
In addition, the Department may revoke or suspend licences where the conditions of the licence have not been met. Re-instatement of a licence following a revocation will include additional fees, terms and conditions.
Wholesalers wishing to dispute the liability for the amount assessed against them, may file a Notice of Objection with the Commissioner setting out the reasons for the objection and all relevant facts.
The notice must be filed within 30 days after paying the tax or the date of the service or mailing of a Notice of Assessment, whichever is sooner.
Upon receipt of a Notice of Objection, the Commissioner shall within 60 days reconsider the assessment and vacate, confirm or vary the assessment or reassess, and the Commissioner shall thereupon notify the wholesaler of the action by personal service or by ordinary or registered mail.
Wholesalers who are dissatisfied with the decision of the Commissioner may, within 30 days after being notified of such decision, file a Notice of Appeal with the Minister of Finance and Treasury Board. The Minister shall within 30 days after the receipt of a Notice of Appeal, fix a date to consider the appeal and shall give a notice of such hearing to the appellant and the Commissioner. Upon any such appeal, the Minister may affirm, vary or reverse the decision of the Commissioner and shall give a written notice of the decision to the appellant by personal service or by ordinary or registered mail.
Appeal to The Court of Queen’s Bench
Appellants who are dissatisfied with the decision of the Minister may, within 30 days after the date of service or mailing of the notice explaining the Minister’s decision, appeal from such decision to a judge of The Court of Queen’s Bench of New Brunswick
Carton
|
A paperboard box or wrapper containing less than sixteen (16) packages of cigarettes or less than two hundred (200) tobacco sticks.
|
Case
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a) with reference to cigarettes or tobacco sticks, a package containing at least twenty-five (25) cartons, and b) with reference to loose tobacco, a package containing at least ten packages of loose tobacco.
|
Commissioner
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The Provincial Tax Commissioner provided for under the Revenue Administration Act and includes those persons designated by the Minister of Finance and Treasury Board to act on behalf of the Provincial Tax Commissioner.
|
Consignment
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Delivery to a merchant for sale but remaining the property of the sendor until sold.
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Consumer
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A person who, within the Province, purchases tobacco from a vendor at a retail sale in the Province for his own consumption or for the consumption of other persons at his expense.
|
Loose Tobacco
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Fine-cut manufactured tobacco for use in making cigarettes.
|
Manufacturer
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A person who manufactures, fabricates or produces tobacco for distribution, sale or storage in New Brunswick.
|
Marked Tobacco
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A package, carton or case of cigarettes or tobacco sticks or a package or case of loose tobacco that is marked for sale in New Brunswick in accordance with the Regulations under the Tobacco Tax Act (see Marking of Tobacco). Tobacco marked for other jurisdictions is considered unmarked tobacco for purposes of this guide.
|
Package
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Package, box, tin or other container in which tobacco is contained or sold.
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Retailer
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Any person who, within the Province, sells tobacco to a consumer.
|
Tobacco
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Tobacco in any form in which tobacco is consumed, and includes snuff.
|
Tobacco Stick
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Any roll or tubular construction of tobacco intended for smoking, other than a cigar, that requires further preparation to be consumed.
|
Unmarked Tobacco
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A package, carton or case of cigarettes or tobacco sticks or a package or case of loose tobacco that is not marked for sale in New Brunswick.
|
Wholesaler
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Any person who, within the Province, sells tobacco for the purpose of resale.
|
All inquiries should be directed to:
Finance and Treasury Board
Revenue Administration Division
P.O. Box 3000
Fredericton, New Brunswick
E3B 5G5
Telephone: (800) 669-7070
Fax: (506) 457-7335
E-mail: wwwfin@gnb.ca
Web Site: www.gnb.ca/finance
Legislation:
New Brunswick Acts and Regulations may be accessed online or copies can be purchased from the Queen’s Printer.