Tax exemptions and ITE: How do these exemptions work?

Providing ITE solutions since 1998​

What is ITE?

Under section 87 of the Indian Act, status Indians receive tax benefits and exemptions. This is if they present the proper documents when making purchases on a reserve. ITE is the abbreviation for Indian Tax Exemption. This is a program consisting of multiple provincial plans for fuel and tobacco taxation in registered reserves. This allows any eligible person to purchase tobacco and fuel without paying the taxes associated. Each province has a different method for verifying status and so they require a different filing system to submit claims.

How does a tax exemption work?

Stores participating in ITE programs have the responsibility of keeping clear and accurate records of these transactions. They must do this to file them with their provincial government for rebates. Since retailers purchase all fuel and tobacco inventory with taxes included, the retailer must file claims to receive a refund for those tax exemptions. To receive the rebate, the vendor has to keep a detailed record of the purchase and send it to their provincial government. This process usually includes providing record of inventory purchases, the sale total, the person’s status number, a signature, and other information about to the sale.

What are my options for filing ITE rebates?

To file for a rebate, the store has to use either an electronic service or a paper claim. Electronic programs are able to submit the form through the point of sale itself. The government then reviews the claim, approves or rejects it and issues the appropriate rebate. An issue that comes up often when vendors file paper claims is the likelihood of rejections due to inaccurate or incomplete information. Electronic submissions via POS systems or other services have a higher approval rate. This is because there is an automatic record of the transaction and this can be easily verified. The software simplifies and optimizes the process of filing claims and could lead to an increase in claim approvals. Investing in a POS system with ITE capabilities or into an electronic submission program is a consideration all retailers participating in these programs must make.

Take a look at Wiz-Tec’s ITE ready point of sale to improve your filing experience.

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