48

 


 

First Session, 49th General Assembly

69 Elizabeth II, 2020

BILL 48

AN ACT TO AMEND THE REVENUE ADMINISTRATION ACT NO. 4

Received and Read the First Time................................................................

Second Reading............................................................................................

Committee.....................................................................................................

Third Reading...............................................................................................

Royal Assent.................................................................................................

HONOURABLE SIOBHAN COADY

Minister of Finance

Ordered to be printed by the Honourable House of Assembly

 

EXPLANATORY NOTES

This Bill would amend the Revenue Administration Act to introduce a tax on vapour products effective January 1, 2021.


A BILL

AN ACT TO AMEND THE REVENUE ADMINISTRATION ACT NO. 4

Analysis


        1.   S.2 Amdt.
Definitions

        2.   S.5 Amdt.

              Collection of tax

        3.   S.9 Amdt.
Books and records

        4.   S.20 Amdt.

              Effect of default

        5.   S. 32 Amdt.
Offences

        6.   Part IX.1 Added

              PART IX.1
VAPOUR PRODUCT TAX

              106.1 Tax on vapour products

              106.2 When tax payable

              106.3 Refund of tax

              106.4   Issuance of licence

   106.5   Application for licence

106.6   Retailer to post licence

     106.7   Suspension or cancellation of licence

     106.8   Automatic revocation of licence

              106.9   Prohibition

              106.10 Prohibited sales

      106.11 Prohibition against rebate

        7.   S.112.1 Added

              Regulations re: vapour product tax

        8.   Commencement


Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:

SNL2009 cR-15.01
as amended

        1. (1) Paragraph 2(m) of the Revenue Administration Act is repealed and the following substituted:

           (m)  "consumer"

                      (i)  for the purpose of Part VIII, means a person who acquires tangible personal property, and applies that property, or intends to apply that property, in the province

                            (A)  to his or her own consumption or use or to the consumption and use of another person at the expense of the first mentioned person, or

                            (B)  on behalf of, or as the agent for, a principal, to the consumption or use of the principal or of another person at the expense of that principal,

                     (ii)  for the purpose of Part IX, means a person who

                            (A)  in the province, purchases or receives delivery of tobacco, or

                            (B)  brings into the province tobacco acquired outside the province,

for that person's own use or consumption or for the use or consumption by others at that person's expense, or on behalf of, or as the agent for, a principal who wishes to acquire the tobacco for use or consumption by the principal or other person at the principal's expense, and

                    (iii)  for the purpose of Part IX.1, means a person who

                            (A)  in the province, purchases or receives delivery of a vapour product, or

                            (B)  brings into the province a vapour product acquired outside the province,

for that person's own use or consumption or for the use or consumption by others at that person's expense, or on behalf of, or as the agent for, a principal who wishes to acquire the vapour product for use or consumption by the principal or other person at the principal's expense;

             (2)  Paragraph 2(ggg) of the Act is repealed and the following substituted:

         (ggg)  "purchase price"

                      (i)  for the purpose of Part VIII, includes the value in Canadian dollars of the consideration, whether money, goods, services rendered, rental or other consideration for which a used vehicle was acquired at a retail sale, and includes the interest, charges, duties and taxes, and

                     (ii)  for the purpose of Part IX.1, includes the value in Canadian dollars of the consideration, whether money, goods, services rendered or other consideration for which a vapour product was acquired at a retail sale, and includes the custom duties and excise taxes;

             (3)  Paragraph 2(kkk) of the Act is amended by adding immediately after subparagraph (i) the following:

                   (i.1)  a vapour product not for resale but as a consumer,

             (4)  Paragraph 2(mmm) of the Act is amended by deleting the word "or" at the end of subparagraph (i) and adding immediately after that subparagraph the following:

                   (i.1)  holds a licence authorizing that person to sell vapour products or keep vapour products for sale directly to retail purchasers; or

             (5)  Paragraph 2(nnn) of the Act is repealed and the following substituted:

        (nnn)  "sale" means a sale for cash or on credit or a sale where the price is payable by instalments, and includes a barter, an exchange and a contract by which at a price or for other consideration a person gives gasoline, a carbon product, tobacco, a vapour product, a vehicle or tangible personal property to another;

             (6)  The Act is amended by adding immediately after paragraph 2(vvv) the following:  

     (vvv.1)  "vaping device" includes a device

                      (i)  containing an electronic or battery powered heating element capable of vapourizing a vaping substance for inhalation or release into the air, including a component or part that can be used to build the product or device, or

                     (ii)  another device prescribed in the regulations,

but does not include a device exempted by the regulatons;

     (vvv.2)  "vaping package" means a vaping device and a vaping substance sold together to a consumer for a single price;

     (vvv.3)  "vaping substance" means

                      (i)  a solid, liquid or gas that

                            (A)  is designed for use in a vaping device,

                            (B)  on being heated produces a vapour,

                            (C)  may or may not contain nicotine, and

                            (D)  does not contain cannabis, or

                     (ii)  a substance prescribed in the regulations,

but does not include a substance exempted by the regulations;

     (vvv.4)  "vapour product" means

                      (i)  a vaping device,

                     (ii)  a vaping substance, or

                    (iii)  a vaping package;

             (7)  Paragraph 2(yyy) of the Act is repealed and the following substituted:     

        (yyy)  "wholesaler"

                      (i)  for the purpose of Parts III, III.1 and III.2, means a person who holds a licence issued under this Act authorizing that person to sell or keep gasoline or a carbon product for sale otherwise than to retail purchasers, 

                     (ii)  for the purpose of Part IX, means a person who sells tobacco in the province for the purpose of resale, and   

                    (iii)  for the purpose of Part IX.1, means a person who holds a licence issued under the Act authorizing that person to sell or keep vapour products in the province for the purpose of resale.

 

        2. Subsection 5(1) of the Act is repealed and the following substituted:

Collection of tax

        5. (1) The minister may designate a person as an agent of the minister for the collection of the tax imposed under Parts III, III.1, VIII, IX and IX.1 of this Act.

 

        3. (1) Section 9 of the Act is amended by adding immediately after subsection (3) the following:

         (3.1)  In addition to the requirements imposed under subsection (1), a wholesaler shall, at the time of making a sale of a vapour product, issue an invoice containing the information that the minister may require.

         (3.2)  In addition to the requirements imposed under subsection (1), a retailer shall, at the time of making a sale of a vapour product, issue a receipt that clearly states the amount of tax payable under Part IX.1 on the vapour product.

             (2)  Section 9 of the Act is amended by adding immediately after subsection (5) the following:

             (6)  Subsections (1), (4) and (5) apply to a wholesaler who holds a licence issued under Part IX.1.

 

        4. Subsection 20(1) of the Act is repealed and the following substituted:

Effect of default

      20. (1) Where a collector fails to make returns as required by the regulations or to pay over to the minister a tax collected by the collector at the time prescribed by the regulations, the minister may revoke the person's collector designation and cancel the person's wholesaler licence or where the return relates to a tax on vapour products, the person's retailer licence.

 

        5. (1) Section 32 of the Act is amended by adding immediately after subsection (7) the following:

         (7.1)  A person is guilty of an offence who

             (a)  not having a valid retailer's licence, sells a vapour product to a retail purchaser;

             (b)  not having a valid wholesaler's licence, sells a vapour product for resale by a retail sale to a person who is not a retailer; or

             (c)  not having a valid wholesaler's licence, sells a vapour product to a retailer.

             (2)  Subsection 32(8) of the Act is repealed and the following substituted:

             (8)  Every contravention, failure or false statement described in subsection (7) or (7.1) that relates to a separate sale or transaction constitutes a separate offence.

 

        6. The Act is amended by adding immediately after Part IX the following:

PART IX.1
VAPOUR PRODUCT TAX

Tax on vapour products

106.1 (1) A person who acquires a vapour product at a retail sale in the province shall, in respect of the consumption or use of the vapour product, pay to the Crown at the time of the sale a tax at the rate of 20% of the purchase price of the vapour product.

             (2)  A person who, as a consumer, brings a vapour product into the province or receives delivery of a vapour product in the province shall, except where exempted under the regulations, immediately report and pay to the Crown the tax that would have been payable had the vapour product been acquired at a retail sale in the province.

             (3)  Notwithstanding subsections (1) and (2), a vapour product may, by regulation, be exempted from tax under this Part where the vapour product is sold by a person or class of persons prescribed in the regulations.

When tax payable

106.2 (1) Where a retail purchaser acquires a vapour product from a retailer, the purchaser shall pay the tax to the retailer at the time of the sale of the vapour product.

             (2)  Where a vapour product is sold on credit at a retail sale, the retail purchaser is assessable for the full amount of the tax as imposed by this Act and the tax shall be imposed when the retail sale is made.

Refund of tax

106.3 (1) Where tax has been paid in respect of the consumption or use of a vapour product purchased at a retail sale and the vapour product is returned to the retailer, a refund of the tax shall be paid to the retail purchaser proportionate to the amount of the purchase price that the retail purchaser is entitled to have refunded to him or her by the retailer when the vapour product is returned.

             (2)  The retailer, when reporting the total amount of the tax collected by him or her, may deduct from the tax to be remitted to the minister the amount of tax he or she has refunded in respect of returned vapour products.

Issuance of licence

106.4 (1) The minister may issue to a person

             (a)  a retailer licence authorizing that person to sell or keep vapour products for sale directly to retail purchasers; or

             (b)  a wholesaler licence authorizing that person to sell or keep vapour products for sale otherwise than directly to retail purchasers.

             (2)  Different classes of retailer licences and different classes of wholesaler licences may be prescribed by regulation.

             (3)  The minister may issue both a retailer licence and a wholesaler licence to a person.

             (4)  A licence issued under this Part shall be subject to the terms and conditions prescribed in the regulations.

Application for licence

106.5 An application for a licence shall be

             (a)  submitted to the minister in the form and manner set by the minister; and

             (b)  accompanied by the fee as may be set by the minister.

 

Retailer to post licence

106.6 A retailer shall post the retailer's licence and keep it posted in a conspicuous place at the retailer's premises or in other places that may be prescribed by the regulations.

Suspension or cancellation of licence

106.7 The minister may suspend or cancel a licence issued under this Part where

             (a)  the licensee contravenes a term or condition of the licence; or

             (b)  the minister has reason to believe that the licensee has failed to comply with this Act or the regulations.

Automatic revocation of licence

106.8 Where a wholesaler or retailer stops carrying on a business of selling vapour products in respect of which a licence was issued to the licensee under this Part, the licence is automatically revoked and shall be returned, by the licensee or the licensee's personal representative, to the minister within 15 days of the date that business stops being carried on.

Prohibition

106.9 (1) A person shall not sell or offer to sell vapour products at a retail sale or keep vapour products for sale at a retail sale in the province unless that person is a retailer.

             (2)  A person shall not sell vapour products at a sale that is not a retail sale unless that person is a wholesaler.

             (3)  This section applies to a person who offers vapour products for retail sale in the province regardless of whether the person has an establishment in the province.

Prohibited sales

106.10 (1) A wholesaler shall not sell vapour products to a person for resale at a retail sale unless that person is a retailer.

             (2)  A retailer who is not a licensed wholesaler, shall not sell vapour products for resale to another retailer.

             (3)  A retailer shall not purchase vapour products for resale from a person who is not a licensed wholesaler.

Prohibition against rebate

106.11 A retailer shall not advertise or hold out or state to the public or to a retail purchaser, directly or indirectly, that the tax or a part of the tax shall be assumed or absorbed by the retailer.

 

        7. The Act is amended by adding immediately after section 112 the following:

Regulations re: vapour product tax

112.1 The Lieutenant-Governor in Council may make regulations

             (a)  prescribing a device for the purposes of subparagraph 2(vvv.1)(ii);

             (b)  exempting a device from the definition of vaping device;

             (c)  prescribing a substance for the purposes of subparagraph 2(vvv.3)(ii);

             (d)  exempting a substance from the definition of vaping substance;

             (e)  exempting the persons, class of persons or quantity of vapour product for the purposes of subsection 106.1(2) and the conditions under which the exemption shall apply;

             (f)  prescribing persons or classes of persons for the purposes of subsection 106.1(3);

             (g)  exempting a vapour product from tax under Part IX.1 for the purposes of subsection 106.1(3);              

             (h)  prescribing different classes of retailer licences and different classes of wholesaler licences;

              (i)  prescribing the terms and conditions of a licence issued under Part IX.1; and

              (j)  prescribing the places at which retailers are to post and keep licences posted.

Commencement

        8. This Act comes into force on January 1, 2021.