Tax and Revenue Administration Tourism Levy Act Information Circular TL-2R2

TL-2R2 / May 2007

NOTE: This Information Circular is intended to explain legislation and provide specific information. Every effort has been made to ensure the contents are accurate. However, if a discrepancy should occur in interpretation between this Information Circular and governing legislation, the legislation takes precedence.

ALBERTA TOURISM LEVY ACT INFORMATION CIRCULAR:
RESPONSIBILITIES OF OPERATORS PROVIDING ACCOMMODATION

This Information Circular explains the responsibilities of operators under the Tourism Levy Act (“the Act”). Operators are those who sell, offer for sale or otherwise provide accommodation in Alberta. The topics in this circular include:

• Registration
• Changes in Operations
• Changes in Ownership
• Collecting the Tourism Levy
• Filing Returns
• Remitting the Tourism Levy
• Late Filing Penalty
• Refunds
• Maintaining Records

Registration

1. Under the Act, an operator must register with Alberta Finance, Tax and Revenue Administration (TRA), by completing and submitting the Tourism Levy Registration (form AT4827). The registration form is available on our website or by contacting TRA. Operators must register each location where lodging is provided. When registered, each establishment will be assigned a unique Tourism Levy account number. This account number should be quoted on all returns, remittances and correspondence with TRA.
   
   
2. The application for registration is subject to review. TRA may refuse to register a person if, in the opinion of the Minister, the person has contravened the Act or regulations or has a director, officer or employee who has contravened the Act or regulations. The Minister may also refuse registration if the person seeking registration is not dealing at arm's length with another person whose registration under the Act has been suspended, cancelled or refused.
   
   
3. TRA notifies the applicant in writing of its decision to refuse registration. Where a registration under the Act has been refused the applicant may file a Notice of Objection. Refer to Information Circular TL-3, Administration.
   
   
4. No one whose registration under the Act has been suspended or cancelled may sell, offer for sale, or otherwise provide accommodation in Alberta, until the suspension has ended or the registration has been reinstated.

Changes in Operations

5. An operation must immediately advise TRA, in writing, of the following:
   
   
   • new business locations;
   • changes in the nature of the business (e.g., from a seasonal operation to a year round operation);
   • temporary closures of the business (e.g., renovations);
   • changes in the legal name, operating name or business address;
   • cessation of the business (generally, or at a particular location); or
   • changes in the ownership of the business.

Changes in Ownership

6. If an operation changes ownership the new owner must apply to TRA for registration under the Act. The previous owner must ensure all Tourism Levy returns have been filed and the Tourism Levy paid. The previous owner should also submit a written request to TRA for a clearance certificate to confirm all returns have been received and no Tourism Levy liabilities are outstanding.
   

Collecting the Tourism Levy

7. Operators are required to collect and remit the Tourism Levy on accommodation subject to the levy when the purchase is made or, in the case of ongoing maintenance fees for prepaid vacation packages, when the maintenance fees are paid. An operator who fails to do so is deemed to have collected the levy. TRA will assess the operator for the unremitted levy.
   
   
8. An operator who collects, or is deemed to have collected, the Tourism Levy may be required to deposit the levy it collects into an account, or a trust account, in the name of the Minister of Finance. This action is taken when payment of the Tourism Levy to TRA may be in jeopardy.

Filing Returns

9. Operators must file a Tourism Levy return for each collection period, based on the number of sleeping rooms in each establishment. An establishment means each location where lodging is provided. Collection periods are:
   
   
   • for operators with 50 or more sleeping rooms, each calendar month; or
   • for operators with fewer than 50 sleeping rooms, the three-month periods ending: March 31, June 30, September 30 and December 31.
     
     
10. Operators with more than one establishment can group all the sleeping rooms in their establishments together to determine their collection period. Operators wanting a different collection period may request a change by writing to TRA. TRA will advise the operators of its decision regarding a change in a collection period.
    
    
11. The Tourism Levy return is available on the Alberta Finance website, Tax and Revenue Administration Client Self-service (TRACS) secure online system, or by contacting TRA.
    
    
12. The Tourism Levy return must be received by TRA on, or before, the 28th day after the end of a collection period. If the due date is a weekend or government holiday, the return is due on the next business day.
    
    
13. An operator is required to file a return even if no accommodation was offered for sale or purchased during the collection period unless notified, in writing, by TRA that no return is required.

Returns required under the Act may be filed by:

• mailing the return to TRA (provide adequate time for TRA to receive the return by the due date);
• couriering the return to TRA's office (allow adequate time for receipt by TRA);
• hand delivering the return to TRA's offices;
• faxing the return to TRA;
• filing the return with TRA using IVR (Interactive Voice Response); or
• submitting the return to TRA online, using the TRACS secure online system.

TRACS is a secure online system providing authorized individuals with an alternative to conduct business with TRA.

Remitting the Tourism Levy

14. Payments of the Tourism Levy must also be received by TRA on or before the 28th day after the end of a collection period and be accompanied by a Remittance Advice. The Remittance Advice is attached to the preprinted returns sent to registered operators by TRA. If the payment due date is a weekend or government holiday, the payment is due on the next business day.
    
    
15. The Tourism Levy may be remitted to TRA by any of the following methods:
    
    
    1. mailed, delivered by courier or hand-delivered to TRA. Remittances should be made payable to the Minister of Finance and accompanied by a Remittance Advice. The effective date of receipt of a mailed or delivered remittance is the date it is actually received by TRA. Remittances mailed or couriered to TRA should be sent with adequate lead-time to ensure receipt on, or before, the due date. If hand-delivered, they should be taken to one of the TRA offices listed on this circular, between the hours of 8:15 a.m. and 4:30 p.m., Monday to Friday, except government holidays.
       
       
    2. at most financial institutions in Canada, if accompanied by an original Remittance Advice. The effective date of receipt is the business day stamped on the Remittance Advice by the financial institution.
       
       
    3. by wire transfer. The effective date of receipt is the business date the funds are received by TRA's bank. For more information on this option, contact TRA at (780) 427-3044 or 310-0000 / (780) 427-3044 (Alberta toll-free).
       
       
    4. through internet payment services provided by major financial institutions in Canada. The effective date of receipt is the date TRA's account is credited. The earliest possible effective date is the next business day. For further details on this option, contact your financial institution or call TRA at the above number.

    If a payment is late or deficient, interest will be charged on the amount not paid.

It should be noted that a return is required to be filed with TRA even if the levy has been remitted.

Late Filing Penalty

16. Failure to file a return on or before the due date required may result in a significant filing penalty. As of January 1, 2006, the late filing penalty on late Tourism Levy returns will be:
    
    
    1. for a return up to, and including, four days late, $25 per day.
    2. for any return more than 4 days late, the lesser of $25 per day or the unpaid levy at the required filing date, with a minimum of $100 (regardless of the unpaid levy) and a $1,000 maximum.

A late filing penalty may be imposed when a return is not filed by the required filing date, whether payment has been made on time or not.

Refunds

17. A refund of paid Tourism Levy is available to operators where the accommodation was purchased on credit and all, or a portion of, the amount of the debt for the purchase has become a “bad debt”.

A “bad debt” is a debt to an operator that has become uncollectible, but was included in calculating the income of an operator for the current or a preceding year for purposes of the Income Tax Act (Canada ).

A debt is not uncollectible unless the operator:

• has exhausted all efforts to collect the debt reasonably expected to be made by a creditor if the creditor was dealing at arm's length with a debtor, and
• in the bankruptcy or receivership of a debtor, the operator has filed a claim with the trustee or receiver that includes the amount of the Tourism Levy, shown separately.

18. An application for refund must be accompanied by invoices and any other records and evidence required to prove the claim and determine the amount of the levy remitted and the amount to be refunded.
    
    
19. An application must be received by TRA within one year after the earlier of:
    
    
    • the date a notice of bankruptcy or notice of the appointment of a receiver was received by the applicant, or
    • the date the debt was written off as a bad debt in the applicant's books of account.
      
      
20. If, in the opinion of TRA, an applicant has misrepresented a material fact, the application for a refund will be disallowed and no refund made.

Maintaining Records

21. Operators are required to keep records and books of account containing information necessary to determine the amount of the Tourism Levy required to be collected and remitted. Failure to maintain records may result in penalties described in Information Circular TL-3, Administration.
    

22. Records are to be retained by the operator for a period of four full years from the end of the calendar year in which the records were created. TRA may, in some cases, require records to be kept for a specified time beyond this period. Records to be retained include:
    
    
    • a copy of the invoice for the rental of accommodation provided to the purchaser of the accommodation. The invoice must show separately the purchase price and the amount of the Tourism Levy.
    • guest registers or registration cards.
    • tour or block booking contracts or agreements.
    • revenue-reporting summaries and documents to support all revenue exempt from the levy.
    • financial statements and supporting notes or schedules.
    • long-term room rental or lease agreements.
      
      
23. If room rental charges include meals or other services, schedules detailing room charge rates, meals and other applicable service charges should also be retained.
    
    
24. Operators providing accommodation free of charge to persons performing services for the operator should retain copies of the applicable contracts and the room charge rates for similar accommodation made available to other persons on the same day(s).
    
    
25. Operators must keep their records at their place of business or a residence in Alberta unless they have received written permission from TRA to keep them at another location.