Fuel Tax Program – What you Need to Know

Tax refund and marked fuel permits

What you need to know about making a claim for a fuel tax refund and possibly improving cash flow by applying for a marked fuel permit…

With the ever-increasing fuel prices, farms are looking to reduce expenses and improve cash flow.  The Province of Nova Scotia has a fuel tax exemption program that allows qualifying businesses to apply for a refund.  Farms with a gross farm income over $10,000 qualify for this refund which can either be accessed upfront if the farm has a permit or by remitted by submitting a claim form. 

The Fuel Tax Program is to provide a refund on the Provincial Motive Fuel Tax.  This tax is 15.5 cents per litre of gasoline and 15.4 cents per litre of diesel.  The Provincial Motive Fuel Tax goes towards maintaining roads and highways. 

Refund Form

Eligible farms are able to submit the Fuel Tax – Gasoline, Diesel Oil or Propane Refund Application.  A completed form can be submitted along with invoices/receipts for the fuel purchased.  The claim must be for a minimum of $100 or for a twelve-month period.  For example, a claim with a total of $50 and that covers from April 1 2021-March 31 2022, would be eligible.  Another example is if you purchase enough litres of fuel, you can make a claim multiple times throughout a single year. 

Marked fuel permit

Farms purchasing and using high volumes of fuel and looking to improve their cash flow can spend $93.40 for a Fuel Tax Application: Consumer’s Exemption Permit.  The permit is for three years and is available to registered farms with a gross farm income over $10,000.  The permit will allow you to purchase dyed/marked fuel which has the Motive Fuel Tax removed.

Additional Information

If you are trying to decide whether the refund or the marked fuel permit is best for your farm, here are some things to consider:

The refund method must be used by farms that:

  1. purchase gasoline, diesel oil and propane tax only at the retail level such as service stations;
  2. do not have storage tanks capable of holding 200 litres of gasoline or diesel oil from an oil company;
  3. do not have enough storage tanks to store both clear (taxable) and marked (tax exempt) gasoline and/or diesel oil; (examples: a. if you are going to have dyed diesel, you’ll need two tanks – a tank for clear diesel and the dyed diesel, b. if you are going to have both dyed diesel and dyed gasoline, you will need four tanks.)
  4. operate multi-use equipment for both taxable and tax-exempt usage. (Example of this is if you are using a farm tractor for commercial snow removal)

Like most permits, permit holders are subject to audits and farms are required to maintain records.  In saying this, farms that have tanks of bulk clear fuel and submit for refund will also need to keep records to demonstrate how much of that bulk fuel tractors used. 

Forms you need:

If you do not have a permit and want to submit for a refund fill out the Fuel Tax Refund Application.

If you are interested in applying for a permit to purchase dyed fuel, complete the Consumers Exemption Permit.

More information:

More information on the Fuel Tax Program can be found at Fuel Tax Program – Government of Nova Scotia