About Motor Fuel Tax

Motor Fuel Tax is paid by the consumer when purchasing fuel.

When fuel is manufactured or imported, the business that first sells the fuel must be appointed a "fuel collector" under the Motor Fuel Tax Act. The fuel collector pays a security to the province equal to the tax on the subsequent retail sales. The collector passes this cost on to the retailer, who in turn is reimbursed by the tax charged to the end consumer.

In this way, the province reduces the number of businesses needing to file a return and remit tax to the government.

All provincial fuel taxes are calculated at a fixed price per litre. However, the tax rate can vary depending on:

	the type of fuel (gas, diesel, jet or alternative motor fuel)
	whether the fuel is clear or coloured
	the use of the fuel (e.g. stationary engine, industrial machine, or car)
	the location of the sale (e.g. within a transit tax area, on farmland, on a First Nation Reserve, within or outside the province)
	the person buying the fuel (e.g. fuel collector, farmer, First Nation)

Please see Motor Fuel Tax Rates for more information.

The Ministry disburses a portion of the fuel tax collected to:

	The Greater Vancouver Transportation Authority (Translink)
	BC Transit (Victoria)
	British Columbia Transportation Financing Authority (BCTFA)

In addition to the province, the federal government collects:

Fuels that are not used in internal combustion engines, such as fuels used in open flame burners for heating, are subject to Provincial Sales Tax (PST) and are not taxed under the Motor Fuel Tax Act.