Federal Sales Tax Inventory Rebate Regulations (SOR/91-52)

Short Title

1 These Regulations may be cited as the Federal Sales Tax Inventory Rebate Regulations.

Interpretation

2 In these Regulations,

Act

Act means the Excise Tax Act; (Loi)

computer carrier media

computer carrier media means media on which is stored instructions or data to be processed by data processing equipment; (support de transmission de données)

software products

software products means computer carrier media including the instructions or data stored thereon, but not including sound or image recordings, integrated circuits, semi-conductors and similar devices or articles incorporating such recordings, circuits, semi-conductors or devices. (produit logiciel)

Prescribed Tax Factors

3 For the purposes of subsection 120(5) of the Act, the prescribed tax factors in respect of the following classes of goods are:

• (a) in the case of goods included in Schedule IV to the Act, 5.6%;

• (b) in the case of gasoline, the rate of tax under Part VI of the Act applicable on December 31, 1990 in respect of unleaded gasoline;

• (c) in the case of diesel fuel, the rate of tax under Part VI of the Act applicable on December 31, 1990 in respect of diesel fuel;

• (d) in the case of propane, 1.4%;

• (e) in the case of mobile homes and modular building units, 2.8%;

• (f) in the case of motor vehicles designed for highway use, 11.1%;

• (g) in the case of software products, 8.1%; and

• (h) in any other case, 8.1%.

Prescribed Method of Determining Rebate

4 For the purposes of subsection 120(5) of the Act, the rebate in respect of a person’s inventory is

• (a) the total of all amounts each of which is determined, for a class of goods, by the formula

  A × B

  where

  A

  is the prescribed tax factor in respect of the class of goods; and

  B

  is

  • (i) where the class of goods is gasoline or diesel fuel, the number of litres of gasoline or diesel fuel, as the case may be, that form part of the inventory,

  • (ii) where the class of goods is software products, the total value of the computer carrier media, excluding the value of instructions or data stored thereon, that form part of the inventory or the product obtained when $5 is multiplied by the number of those computer carrier media, and

  • (iii) in any other case, the total value of goods in the class (other than used goods) that form part of that inventory, as that total value would be required to be determined at the beginning of January 1, 1991 for the purpose of computing the person’s income from a business for the purposes of the Income Tax Act; or

• (b) where the person elects to use the following formula and where

  • (i) goods included in Part V of Schedule III to the Act are held at the beginning of January 1, 1991 by the person for taxable supply (within the meaning assigned by subsection 123(1) of the Act) by way of sale to others in the ordinary course of the person’s business, and

  • (ii) the aggregate of

    • (A) the total value of the person’s inventory (other than gasoline, diesel fuel and used goods) at that time, and

    • (B) the total value of goods (other than gasoline, diesel fuel and used goods) that would be inventory of the person at that time if the goods were tax-paid goods,

    each of which is determined as of that time in accordance with the method that the person would be required to use for purposes of computing the person’s income from a business for purposes of the Income Tax Act, does not exceed $70,000,

  the amount determined by the formula

  A + B + C

  where

  A

  is the product obtained by multiplying the number of litres of gasoline that form part of the person’s inventory at that time by the prescribed tax factor in respect of gasoline;

  B

  is the product obtained by multiplying the number of litres of diesel fuel that form part of the person’s inventory at that time by the prescribed tax factor in respect of diesel fuel; and

  C

  is 2.5% of the aggregate determined under subparagraph (ii).