First

Session, 49th General Assembly

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

S.2 Amdt.

Definitions

S.5 Amdt.

Collection

of tax

S.9 Amdt.

Books and records

S.20 Amdt.

Effect

of default

S. 32 Amdt.

Offences

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

S.112.1 Added

Regulations

re: vapour product tax

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) 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m) of the Revenue Administration Act is repealed and the following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

(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.

(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

(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.

(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;

(

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

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;

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.

Queen's Printer