NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6882
SPONSOR: Cahill TITLE OF BILL:
An act to amend the tax law, in relation to tax on sales of motor fuel
and petroleum products; to repeal paragraph 3 of subdivision (f) and
paragraph 4 of subdivision (g) of section 301-a of the tax law, relating
to manufacturing gallonage for purposes of the imposition of certain
taxes; to repeal subdivisions (i), (j), and (l) of section 301-c of the
tax law relating to reimbursement; to repeal section 301-d of the tax
law relating to a utility credit or reimbursement; to repeal subdivision
(f) of section 301-e of the tax law relating to an aviation fuel busi-
ness which services four or more cities; to repeal subparagraph (xi) of
paragraph 3 of subdivision (c) of section 1105 of the tax law relating
to services rendered with respect to certain property; to repeal para-
graph 9 of subdivision (a) of section 1115 of the tax law relating to
fuel sold to an airline for use in its airplanes; and to amend the tax
law, in relation to making conforming technical changes
PURPOSE:
The purpose of the bill is to repeal certain exemptions from sales and
use tax and petroleum business tax that encourage the use of fossil
fuels.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Conforming technical change.
Section 2: Repeals an exemption from Petroleum Business Tax for manufac-
turing using non-highway diesel fuel and residual petroleum product.
Section 3: Repeals exemptions from Petroleum Business Tax for kerosene,
kero-jet fuel, aviation gasoline, residual petroleum product (bunker
fuel), liquefied petroleum gases, and non-highway diesel motor fuel used
for nonresidential heating purposes.
Section 4: Repeals an exemption from Petroleum Business Tax for sales to
the government of New York state.
Section 5 and 5-a: Repeals a reimbursement for Petroleum Business Tax
paid for non-highway diesel motor fuel used for non-residential heating
purposes, and for motor fuel and diesel motor fuel sold to the govern-
ment of New York state.
Section 6: Repeals a reimbursement for Petroleum Business Tax paid for
commercial gallonage, manufacturing gallonage, and gallonage used in
mining and extracting.
Section 7: Conforming technical change.
Section 8: Repeals a credit or reimbursement for Petroleum Business Tax
paid for residual petroleum product and non-highway diesel motor fuel
used by an electric corporation.
Section 9: Conforming technical change.
Section 10: Repeals an exemption from Petroleum Business Tax for certain
airlines.
Section 11: Repeals an exemption from Petroleum Business Tax for commer-
cial gallonage.
Section 12: Repeals an exemption from Sales and Use Tax for oil and gas
production services.
Section 13: Unrelated cleanup.
Section 14: Repeals an exemption from Sales and Use Tax for airline
fuel.
Section 15: Repeals an exemption from Sales and Use Tax for gas used in
research and development.
Section 16: Repeals an exemption from Sales and Use Tax for fuel and gas
used in production of tangible personal property.
Section 17 and 17-a: Conforming technical changes. Section 18: Unre-
lated cleanup.
Section 19: Repeals an exemption from Sales and Use Tax for gas used to
maintain gas distribution infrastructure.
Section 20: Conforming technical changes. Section 21: Conforming Techni-
cal Change. Section 22: Effective date.
JUSTIFICATION:
New York State spends over $1.5 billion every year on fossil fuel
related tax expenditures, distorting the market and subsidizing the use
of greenhouse gas-emitting fossil fuels. Some of these tax expenditures
may serve a compelling public interest such as offering heating assist-
ance to low-income New Yorkers. However, a significant proportion of the
spending serves to prop-up outdated industries or reward energy ineffi-
ciencies leading to a double cost to taxpayers - once for the direct tax
expenditure and again for the environmental damage resulting from the
continued burning of fossil fuels. This bill begins the process of
aligning New York state tax policy by repealing some of the more egre-
gious fossil fuel related tax expenditures. Repeal of these expenditures
would save the state roughly $334 million annually, based on information
available in the Annual Report on New York State Tax Expenditures,
produced by the Division of Budget.
LEGISLATIVE HISTORY:
New Bill
FISCAL IMPACT ON THE STATE:
Potential savings of over $300 million annually.
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all tax years
commencing on or after the first of January next succeeding the date on
which it shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
6882
2021-2022 Regular Sessions
IN ASSEMBLY
April 13, 2021
___________
Introduced by M. of A. CAHILL -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to tax on sales of motor fuel
and petroleum products; to repeal paragraph 3 of subdivision (f) and
paragraph 4 of subdivision (g) of section 301-a of the tax law, relat-
ing to manufacturing gallonage for purposes of the imposition of
certain taxes; to repeal subdivisions (i), (j), and (l) of section
301-c of the tax law relating to reimbursement; to repeal section
301-d of the tax law relating to a utility credit or reimbursement; to
repeal subdivision (f) of section 301-e of the tax law relating to an
aviation fuel business which services four or more cities; to repeal
subparagraph (xi) of paragraph 3 of subdivision (c) of section 1105 of
the tax law relating to services rendered with respect to certain
property; to repeal paragraph 9 of subdivision (a) of section 1115 of
the tax law relating to fuel sold to an airline for use in its
airplanes; and to amend the tax law, in relation to making conforming
technical changes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision (m) of section 301-a of the tax law, as added
2 by section 20 of part K of chapter 61 of the laws of 2011, is amended to
3 read as follows:
4 (m) Special rate adjustment for certain vessels. Notwithstanding any
5 provision of this section to the contrary, the use of non-highway diesel
6 motor fuel in the engine of a vessel to propel such vessel shall be
7 subject to tax at the motor fuel and highway diesel motor fuel rate
8 provided for in this section, and shall be subject to the provisions of
9 section three hundred one-j of this article, including the adjustment
10 set forth in paragraph [four] three of subdivision (a) of such section
11 three hundred one-j. A credit or refund shall be available to the extent
12 tax paid on gallonage used to propel any such vessel exceeds the amount
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09108-04-1
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1 of tax due based on the tax rate set forth herein. Provided, however,
2 that the commissioner shall require such documentary proof to qualify
3 for any credit or reimbursement provided hereunder as the commissioner
4 deems appropriate.
5 § 2. Paragraph 3 of subdivision (f) and paragraph 4 of subdivision (g)
6 of section 301-a of the tax law are REPEALED.
7 § 3. Subdivisions (a) and (d) of section 301-b of the tax law, subdi-
8 vision (a) as added by chapter 190 of the laws of 1990, paragraph 5 of
9 subdivision (a) as amended by section 3 of part E of chapter 59 of the
10 laws of 2012, paragraphs 6, 7 and 8 of subdivision (a) as added by
11 section 4 of part W-1 of chapter 109 of the laws of 2006, and subdivi-
12 sion (d) as amended by section 21 of part K of chapter 61 of the laws of
13 2011, are amended to read as follows:
14 (a) Products. (1) [Kerosene sold or used by a petroleum business which
15 is registered under article twelve-A of this chapter as a distributor of
16 diesel motor fuel so long as (i) such product has not been blended or
17 mixed with any other product constituting diesel motor fuel or motor
18 fuel or a residual petroleum product and (ii) such product is not used
19 by the petroleum business as fuel to operate a motor vehicle or sold by
20 such petroleum business to a consumer for use as fuel to operate a motor
21 vehicle.
22 (2) Kero-jet fuel (i) sold by a petroleum business which is registered
23 under article twelve-A of this chapter as a distributor of diesel motor
24 fuel to a consumer for use exclusively as jet aircraft fuel or to a
25 petroleum business registered under such article twelve-A as a "distrib-
26 utor of kero-jet fuel only" where such fixed base operator is engaged
27 solely in making or offering to make retail sales not in bulk of kero-
28 jet fuel directly into the fuel tank of an airplane for the purpose of
29 operating such airplane, (ii) used by a petroleum business, registered
30 under article twelve-A of this chapter as a distributor of diesel motor
31 fuel, exclusively as jet aircraft fuel, or (iii) sold at retail not in
32 bulk by a petroleum business registered under article twelve-A of this
33 chapter as a "distributor of kero-jet fuel only" where such fuel is
34 delivered directly into the fuel tank of a jet airplane for use in the
35 operation of such airplane.
36 (3) Aviation gasoline, meeting the specifications set forth in Ameri-
37 can Standard Testing Material Specification D910 or Military Specifica-
38 tion MIL-G-5572, which is imported or caused to be imported into this
39 state by a petroleum business which is registered under article twelve-A
40 of this chapter as a distributor of motor fuel or produced, refined,
41 manufactured or compounded in this state by such a petroleum business.
42 (4) Residual petroleum product sold by a petroleum business registered
43 under this article as a residual petroleum product business if such
44 product is sold by such petroleum business to a consumer for use exclu-
45 sively as bunker fuel for vessels or if such product is used by such
46 petroleum business exclusively as bunker fuel in its own vessels.
47 (5) Liquefied petroleum gases, such as butane, ethane or propane.
48 (6)] E85 imported or caused to be imported into this state or
49 produced, refined, manufactured or compounded in this state by a petro-
50 leum business registered under article twelve-A of this chapter, as a
51 distributor of motor fuel, and then sold by such petroleum business and
52 delivered to a filling station and placed in a storage tank of such
53 filling station for such E85 to be dispensed directly into a motor vehi-
54 cle for use in the operation of such vehicle.
55 [(7)] (i) Partial B20 exemption. B20 imported or caused to be imported
56 into this state or produced, refined, manufactured or compounded in this
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1 state by a petroleum business registered under article twelve-A of this
2 chapter, as a distributor of diesel motor fuel, and then sold by such
3 petroleum business.
4 (ii) Calculation of partial exemption. The amount of the partial
5 exemption under this paragraph shall be determined by multiplying the
6 quantity of B20 times twenty percent of the applicable taxes otherwise
7 imposed by this article on such fuel.
8 [(8)] (2) CNG or hydrogen.
9 (d) Sales to consumers for heating purposes. [(1)] Total residential
10 heating exemption. Non-highway diesel motor fuel sold by a petroleum
11 business registered under article twelve-A of this chapter as a distrib-
12 utor of diesel motor fuel or residual petroleum product sold by a petro-
13 leum business registered under this article as a residual petroleum
14 product business to the consumer exclusively for residential heating
15 purposes only if such non-highway diesel motor fuel is delivered into a
16 storage tank which is not equipped with a hose or other apparatus by
17 which such fuel can be dispensed into the fuel tank of a motor vehicle
18 and such storage tank is attached to the heating unit burning such fuel.
19 [(2) Partial non-residential heating exemption. (A) Non-highway diesel
20 motor fuel sold by a petroleum business registered under article
21 twelve-A of this chapter as a distributor of diesel motor fuel or resi-
22 dual petroleum product sold by a petroleum business registered under
23 this article as a residual petroleum product business to the consumer
24 exclusively for heating, other than residential heating purposes only if
25 such non-highway diesel motor fuel is delivered into a storage tank
26 which is not equipped with a hose or other apparatus by which such fuel
27 can be dispensed into the fuel tank of a motor vehicle and such storage
28 tank is attached to the heating unit burning such fuel (B) Calculation
29 of partial exemption. The partial exemption under this paragraph shall
30 be determined by multiplying the quantity of non-highway diesel motor
31 fuel and residual petroleum product eligible for the exemption times the
32 sum of the then current rate of the supplemental tax imposed by section
33 three hundred one-j of this article and forty-six percent of the then
34 current rate of the tax imposed by section three hundred one-a of this
35 article, with respect to the specific non-highway diesel motor fuel or
36 residual petroleum product rate, as the case may be.]
37 § 4. The opening paragraph and paragraph 1 of subdivision (c) of
38 section 301-b of the tax law, as added by chapter 190 of the laws of
39 1990, are amended to read as follows:
40 Sales to [New York state and] the federal government. (1) Motor fuel
41 imported or caused to be imported into this state or produced, refined,
42 manufactured or compounded in this state by a petroleum business regis-
43 tered under article twelve-A of this chapter, as a distributor of motor
44 fuel, and then sold by such petroleum business to an organization
45 described in paragraph [one or] two of subdivision (a) of section eleven
46 hundred sixteen of this chapter where such motor fuel is used by such
47 organization for its own use or consumption.
48 § 5. The opening paragraph and subdivisions (a) and (b) of section
49 301-c of the tax law, the opening paragraph as amended by section 5 of
50 part W-1 of chapter 109 of the laws of 2006, subdivision (a) as amended
51 by section 23 of part K of chapter 61 of the laws of 2011, and subdivi-
52 sion (b) as amended by chapter 330 of the laws of 1991, are amended to
53 read as follows:
54 A subsequent purchaser shall be eligible for reimbursement of tax with
55 respect to the following gallonage, subsequently sold by such purchaser
56 in accordance with subdivision (a), (b), (e), (h), [(j), (k), (n) or
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1 (o)] (i), (k) or (l) of this section or used by such purchaser in
2 accordance with subdivision (c), (d), (f), (g)[, (i), (l)] or [(m)] (j)
3 of this section, which gallonage has been included in the measure of the
4 tax imposed by this article on a petroleum business:
5 (a) [Non-highway Diesel motor fuel used for heating purposes. (1)]
6 Total residential heating reimbursement. Non-highway Diesel motor fuel
7 purchased in this state and sold by such purchaser to a consumer for use
8 exclusively for residential heating purposes but only where (i) such
9 non-highway diesel motor fuel is delivered into a storage tank which is
10 not equipped with a hose or other apparatus by which such non-highway
11 Diesel motor fuel can be dispensed into the fuel tank of a motor vehicle
12 and such storage tank is attached to the heating unit burning such non-
13 highway Diesel motor fuel, (ii) the tax imposed pursuant to this article
14 has been paid with respect to such non-highway diesel motor fuel and the
15 entire amount of such tax has been absorbed by such purchaser, and (iii)
16 such purchaser possesses documentary proof satisfactory to the commis-
17 sioner evidencing the absorption by it of the entire amount of the tax
18 imposed pursuant to this article. Provided, however, that the commis-
19 sioner is authorized, in the event that the commissioner determines that
20 it would not threaten the integrity of the administration and enforce-
21 ment of the tax imposed by this article, to provide a reimbursement with
22 respect to a retail sale to a consumer for residential heating purposes
23 of less than ten gallons of non-highway diesel motor fuel provided such
24 fuel is not dispensed into the tank of a motor vehicle.
25 [(2) Partial non-residential heating reimbursement. (A) Non-highway
26 Diesel motor fuel purchased in this state and sold by such purchaser to
27 a consumer for use exclusively for heating, other than for residential
28 heating purposes, but only where (i) such non-highway diesel motor fuel
29 is delivered into a storage tank which is not equipped with a hose or
30 other apparatus by which such non-highway Diesel motor fuel can be
31 dispensed into the fuel tank of a motor vehicle and such storage tank is
32 attached to the heating unit burning such non-highway Diesel motor fuel,
33 (ii) the tax imposed pursuant to this article has been paid with respect
34 to such non-highway diesel motor fuel and the entire amount of such tax
35 has been absorbed by such purchaser, and (iii) such purchaser possesses
36 documentary proof satisfactory to the commissioner evidencing the
37 absorption by it of the entire amount of the tax imposed pursuant to
38 this article.
39 (B) Calculation of partial reimbursement. Notwithstanding any other
40 provision of this article, the amount of the reimbursement under this
41 paragraph shall be determined by multiplying the quantity of non-highway
42 diesel motor fuel eligible for the reimbursement times the sum of the
43 then current rate of the supplemental tax imposed by section three
44 hundred one-j of this article and forty-six percent of the then current
45 rate of the tax imposed by section three hundred one-a of this article,
46 with respect to the non-highway diesel motor fuel rate, as the case may
47 be.]
48 (b) Sales to [New York state and] the federal government. Motor fuel
49 and diesel motor fuel purchased in this state and sold by such purchaser
50 in this state to an organization described in paragraph [one or] two of
51 subdivision (a) of section eleven hundred sixteen of this chapter where
52 (i) such motor fuel or diesel motor fuel is for such organization's own
53 use or consumption, (ii) the tax imposed pursuant to this article has
54 been paid with respect to such motor fuel or diesel motor fuel and the
55 entire amount of such tax has been absorbed by such purchaser and, (iii)
56 such purchaser possesses documentary proof satisfactory to the commis-
A. 6882 5
1 sioner of taxation and finance evidencing the absorption by it of the
2 entire amount of the tax imposed pursuant to this article. Provided,
3 however, that the commissioner [of taxation and finance] shall require
4 such documentary proof to qualify for any reimbursement of tax provided
5 by this section as the commissioner deems appropriate, including the
6 expansion of any certification required pursuant to section two hundred
7 eighty-five-a or two hundred eighty-five-b of this chapter to cover the
8 taxes imposed pursuant to this article.
9 § 5-a. The opening paragraph of section 301-c of the tax law, as
10 amended by chapter 468 of the laws of 2000, is amended to read as
11 follows:
12 A subsequent purchaser shall be eligible for reimbursement of tax with
13 respect to the following gallonage, subsequently sold by such purchaser
14 in accordance with subdivision (a), (b), (e), (h) [,(j)] or [(k)] (i) of
15 this section or used by such purchaser in accordance with subdivision
16 (c), (d), (f), (g)[, (i), (l)] or [(m)] (j) of this section, which
17 gallonage has been included in the measure of the tax imposed by this
18 article on a petroleum business:
19 § 6. Subdivisions (i), (j) and (l) of section 301-c of the tax law are
20 REPEALED.
21 § 7. Subdivisions (k), (m), (n), (o) and (p) of section 301-c of the
22 tax law are redesignated subdivisions (i), (j), (k), (l) and (m).
23 § 8. Section 301-d of the tax law is REPEALED.
24 § 9. Paragraph 4 of subdivision (e) of section 301-e of the tax law,
25 as added by chapter 190 of the laws of 1990, is amended to read as
26 follows:
27 (4) "aviation fuel" means kero-jet fuel and aviation gasoline [(as
28 described in paragraph three of subdivision (a) of section three hundred
29 one-b of this article)] meeting the specifications set forth in American
30 Standard Testing Material Specification D910 or Military Specification
31 MIL-G-5572. Provided, further the term kero-jet shall not include naph-
32 tha based aviation fuel refined and used solely for propelling military
33 jet airplanes of the United States Armed Forces.
34 § 10. Subdivision (f) of section 301-e is REPEALED.
35 § 11. Subdivision (a) of section 301-j of the tax law, as amended by
36 chapter 309 of the laws of 1996, paragraphs 1, 2, 3 and 4 as amended by
37 section 29 of part K of chapter 61 of the laws of 2011, is amended to
38 read as follows:
39 (a) Imposition of tax. (1) In addition to the taxes imposed by
40 sections three hundred one-a and three hundred one-e of this article,
41 there is hereby imposed upon every petroleum business subject to tax
42 imposed under section three hundred one-a of this article and every
43 aviation fuel business subject to the aviation gasoline component of the
44 tax imposed under section three hundred one-e of this article, a supple-
45 mental monthly tax for each or any part of a taxable month at a rate of
46 six and eight-tenths cents per gallon with respect to the products
47 included in each component of the taxes imposed by such section three
48 hundred one-a and the aviation gasoline component of the tax imposed by
49 such section three hundred one-e of this article.
50 (2) [Provided, however, "commercial gallonage," as such term is
51 defined in subdivision (k) of section three hundred of this article,
52 shall be exempt from the measure of the tax imposed under this section.
53 (3)] Provided, further, "railroad diesel," as such term is defined in
54 subdivision (l) of section three hundred of this article, shall be
55 exempt from the measure of the tax imposed under this section.
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1 [(4)] (3) Provided, further, a separate per gallon rate shall apply
2 with respect to highway diesel motor fuel. Such rate shall be determined
3 by taking the adjusted rate per gallon of tax imposed under paragraph
4 one of this subdivision as adjusted in accordance with paragraph [five]
5 four of this subdivision and subtracting therefrom one and three-quar-
6 ters cents. Commencing January first, two thousand twelve, and each
7 January thereafter, the per gallon rate applicable to highway diesel
8 motor fuel shall be the adjusted rate under paragraph one of this subdi-
9 vision as adjusted in accordance with paragraph [five] four of this
10 subdivision which commences on such date minus one and three-quarters
11 cents. The resulting rate under this paragraph shall be expressed in
12 hundredths of a cent.
13 [(5)] (4) Except as herein provided, the tax imposed under this
14 section shall be calculated in the same respective manner as the taxes
15 imposed by section three hundred one-a and section three hundred one-e
16 of this article. Except [for section three hundred one-d and except] as
17 otherwise provided in this section, all the provisions of this article
18 applicable to the taxes imposed by sections three hundred one-a and
19 three hundred one-e of this article, shall apply with respect to the
20 supplemental tax imposed by this section to the same extent as if it
21 were respectively imposed by such sections.
22 § 12. Subparagraphs (ix) and (x) of paragraph 3 and paragraph 5 of
23 subdivision (c) of section 1105 of the tax law, subparagraph (ix) of
24 paragraph 3 as added by chapter 395 of the laws of 1998, subparagraph
25 (x) of paragraph 3 as added by section 1 of part FF of chapter 407 of
26 the laws of 1999, and paragraph 5 as amended by chapter 321 of the laws
27 of 2005, are amended to read as follows:
28 (ix) [such services rendered with respect to tangible property used or
29 consumed directly and predominantly in the production for sale of gas or
30 oil by manufacturing, processing, generating, assembling, refining,
31 mining, or extracting.
32 (x)] such services rendered with respect to property described in
33 paragraph twelve-a of subdivision (a) of section eleven hundred fifteen
34 of this article.
35 (5) Maintaining, servicing or repairing real property, property or
36 land, as such terms are defined in the real property tax law, whether
37 the services are performed in or outside of a building, as distinguished
38 from adding to or improving such real property, property or land, by a
39 capital improvement as such term capital improvement is defined in para-
40 graph nine of subdivision (b) of section eleven hundred one of this
41 article, but excluding (i) services rendered by an individual who is not
42 in a regular trade or business offering his services to the public, (ii)
43 [services rendered directly with respect to real property, property or
44 land used or consumed directly and predominantly in the production for
45 sale of gas or oil by manufacturing, processing, generating, assembling,
46 refining, mining, or extracting, (iii)] services rendered with respect
47 to real property, property or land used or consumed predominantly either
48 in the production of tangible personal property, for sale, by farming or
49 in a commercial horse boarding operation, or in both and [(iv)] (iii)
50 services of removal of waste material from a facility regulated as a
51 transfer station or construction and demolition debris processing facil-
52 ity by the department of environmental conservation, provided that the
53 waste material to be removed was not generated by the facility.
54 § 13. Subparagraph (xi) of paragraph 3 of subdivision (c) of section
55 1105 of the tax law is REPEALED.
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1 § 14. Paragraph 9 of subdivision (a) of section 1115 of the tax law is
2 REPEALED.
3 § 15. Paragraph (ii) of subdivision (b) of section 1115 of the tax
4 law, as amended by section 30 of part Y of chapter 63 of the laws of
5 2000, is amended to read as follows:
6 (ii) [Gas, electricity] Electricity, refrigeration and steam, and
7 [gas,] electric, refrigeration and steam service of whatever nature for
8 use or consumption directly and exclusively in research and development
9 in the experimental or laboratory sense shall be exempt from the tax
10 imposed under subdivision (b) of section eleven hundred five and the
11 compensating use tax imposed under section eleven hundred ten of this
12 article. Such research and development shall not be deemed to include
13 the ordinary testing or inspection of materials or products for quality
14 control, efficiency surveys, management studies, consumer surveys,
15 advertising, promotions or research in connection with literary, histor-
16 ical or similar projects.
17 § 16. Paragraph 1 of subdivision (c) of section 1115 of the tax law,
18 as amended by section 7 of part B of chapter 63 of the laws of 2000, is
19 amended to read as follows:
20 (1) [Fuel, gas, electricity] Electricity, refrigeration and steam, and
21 [gas,] electric, refrigeration and steam service of whatever nature for
22 use or consumption directly and exclusively in the production of tangi-
23 ble personal property, [gas,] electricity, refrigeration or steam, for
24 sale, by manufacturing, processing, assembling, generating, refining,
25 mining or extracting shall be exempt from the taxes imposed under subdi-
26 visions (a) and (b) of section eleven hundred five and the compensating
27 use tax imposed under section eleven hundred ten of this article.
28 § 17. Subdivision (j) of section 1115 of the tax law, as amended by
29 section 41 of part K of chapter 61 of the laws of 2011, is amended to
30 read as follows:
31 (j) The exemptions provided in this section shall not apply to the tax
32 required to be prepaid pursuant to the provisions of section eleven
33 hundred two of this article nor to the taxes imposed by sections eleven
34 hundred five and eleven hundred ten of this article with respect to
35 receipts from sales and uses of motor fuel or diesel motor fuel, [except
36 that the exemptions provided in paragraphs nine and forty-two of subdi-
37 vision (a) of this section shall apply to the tax required to be prepaid
38 pursuant to the provisions of section eleven hundred two of this article
39 and to the taxes imposed by sections eleven hundred five and eleven
40 hundred ten of this article with respect to sales and uses of kero-jet
41 fuel,] CNG, hydrogen and E85, provided, however, the exemption allowed
42 for E85 shall be subject to the additional requirements provided in
43 section eleven hundred two of this article with respect to E85. The
44 exemption provided in subdivision (c) of this section shall apply to
45 sales and uses of non-highway diesel motor fuel but only if all of such
46 fuel is consumed other than on the public highways of this state. The
47 exemption provided in subdivision (c) of this section shall apply to
48 sales and uses of non-highway diesel motor fuel for use or consumption
49 either in the production for sale of tangible personal property by farm-
50 ing or in a commercial horse boarding operation, or in both but only if
51 all of such fuel is consumed other than on the public highways of this
52 state (except for the use of the public highways to reach adjacent farm-
53 lands or adjacent lands used in a commercial horse boarding operation,
54 or both).
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1 § 17-a. Subdivision (j) of section 1115 of the tax law, as amended by
2 section 41-a of part K of chapter 61 of the laws of 2011, is amended to
3 read as follows:
4 (j) The exemptions provided in this section shall not apply to the tax
5 required to be prepaid pursuant to the provisions of section eleven
6 hundred two of this article nor to the taxes imposed by sections eleven
7 hundred five and eleven hundred ten of this article with respect to
8 receipts from sales and uses of motor fuel or diesel motor fuel[, except
9 that the exemption provided in paragraph nine of subdivision (a) of this
10 section shall apply to the tax required to be prepaid pursuant to the
11 provisions of section eleven hundred two of this article and to the
12 taxes imposed by sections eleven hundred five and eleven hundred ten of
13 this article with respect to sales and uses of kero-jet fuel]. The
14 exemption provided in subdivision (c) of this section shall apply to
15 sales and uses of non-highway diesel motor fuel but only if all of such
16 fuel is consumed other than on the public highways of this state. The
17 exemption provided in subdivision (c) of this section shall apply to
18 sales and uses of non-highway diesel motor fuel for use or consumption
19 either in the production for sale of tangible personal property by farm-
20 ing or in a commercial horse boarding operation, or in both but only if
21 all of such fuel is consumed other than on the public highways of this
22 state (except for the use of the public highways to reach adjacent farm-
23 lands or adjacent lands used in a commercial horse boarding operation,
24 or both).
25 § 18. Subdivision (s) of section 1115 of the tax law, as added by
26 chapter 201 of the laws of 1995, is redesignated subdivision (p).
27 § 19. Subdivision (w) of section 1115 of the tax law, as added by
28 section 32 of part Y of chapter 63 of the laws of 2000, is amended to
29 read as follows:
30 (w) Receipts from the sale of [gas or] electricity or [gas or] elec-
31 tric service of whatever nature and consideration given or contracted to
32 be given for, or for the use of, [gas or] electricity or [gas or] elec-
33 tric service of whatever nature purchased for use or consumption direct-
34 ly and exclusively to provide [gas or] electric service of whatever
35 nature consisting of operating [a gas pipeline or gas distribution line
36 or] an electric transmission or distribution line [and ensuring the
37 necessary working pressure in an underground gas storage facility] shall
38 be exempt from sales and compensating use taxes imposed by this article.
39 Such exempt [gas or] electricity or [gas or] electric service of whatev-
40 er nature shall include, but shall not be limited to, such [gas or]
41 electricity or [gas or] electric service of whatever nature used or
42 consumed directly and exclusively to (1) [ensure necessary working pres-
43 sure in a gas pipeline used to transport, transmit or distribute gas,
44 (2) operate compressors used to transport, transmit or distribute gas
45 through such a gas pipeline or distribution line or used to ensure
46 necessary working pressure in such a storage facility, (3) operate heat-
47 ers to prevent gas in such a pipeline or distribution line from freez-
48 ing, (4) operate equipment which removes impurities and moisture from
49 gas in such a pipeline or distribution line, (5)] operate substations
50 and equipment related to electric transmission and distribution lines
51 such as transformers, capacitors, meters, switches, communication
52 devices and heating and cooling equipment, and [(6)] (2) ensure the
53 reliability of electricity or electric service transmitted or distrib-
54 uted through such lines, for example, by operating reserve capacity
55 machinery and equipment.
A. 6882 9
1 § 20. Subdivision (k) of section 300 of the tax law, as amended by
2 section 17 of part K of chapter 61 of the laws of 2011, is amended to
3 read as follows:
4 (k) "Commercial gallonage" means gallonage (1) which is non-highway
5 diesel motor fuel or residual petroleum product, (2) [which is included
6 in the full measure of the non-highway diesel motor fuel component or
7 the residual petroleum product component of the tax imposed under
8 section three hundred one-a of this article, (3)] which does not (and
9 will not) qualify [(A) for the utility credit or reimbursement provided
10 for in section three hundred one-d of this article, (B)] (A) as "manu-
11 facturing gallonage", as such term is defined in subdivision (m) of this
12 section, [(C)] or (B) for the not-for-profit organization exemption
13 provided for in subdivision (h) of section three hundred one-b of this
14 article, [or (D) for the heating exemption provided for in paragraph two
15 of subdivision (d) of section three hundred one-b of this article or the
16 heating reimbursement provided for in paragraph two of subdivision (a)
17 of section three hundred one-c of this article,] and [(4)] (3) which
18 will not be used nor has been used in the fuel tank connecting with the
19 engine of a vessel. No gallonage shall qualify as "commercial gallonage"
20 where such gallonage is eligible for the [(i) utility credit or
21 reimbursement under such section three hundred one-d of this article,
22 (ii) "manufacturing exemption" under paragraph three of subdivision (f)
23 of section three hundred one-a of this article, (iii)] not-for-profit
24 organization exemption under subdivision (h) of section three hundred
25 one-b of this article[, or (iv) heating exemption provided for in para-
26 graph two of subdivision (d) of section three hundred one-b of this
27 article or the heating reimbursement provided for in paragraph two of
28 subdivision (a) of section three hundred one-c of this article]. The
29 commissioner shall require such documentary proof to substantiate the
30 classification of product as "commercial gallonage" as the commissioner
31 deems appropriate.
32 § 21. Paragraph 1 of subdivision (f) of section 301-b of the tax law,
33 as amended by section 21 of part K of chapter 61 of the laws of 2011, is
34 amended to read as follows:
35 (1) Residual petroleum product and non-highway diesel motor fuel sold
36 to an electric corporation, [as described in subdivision (a) of section
37 three hundred one-d of this article,] as defined in subdivision thirteen
38 of section two of the public service law, subject to the supervision of
39 the department of public service, which is registered with the depart-
40 ment as a petroleum business tax direct pay permittee, and used by such
41 electric corporation to fuel generators for the purpose of manufacturing
42 or producing electricity where such electric corporation provides a copy
43 of a direct pay permit authorized and issued by the commissioner, to the
44 petroleum business making such sale. If so registered, such corporation
45 shall be a taxpayer under this article and (i) such electric corporation
46 shall file a return monthly and pay the applicable tax under this arti-
47 cle, after the application of allowable credits, on all such purchases
48 directly to the commissioner, (ii) such electric corporation shall be
49 subject to all of the provisions of this article relating to the respon-
50 sibilities and liabilities of taxpayers under this article with respect
51 to such residual petroleum product and non-highway diesel motor fuel.
52 § 22. This act shall take effect immediately and shall apply to all
53 tax years commencing on or after the first of January next succeeding
54 the date on which it shall have become a law; provided, however, that:
55 (a) the amendments to paragraphs 6, 7 and 8 of subdivision (a) of
56 section 301-b made by section three of this act shall not affect the
A. 6882 10
1 expiration and repeal of such paragraphs and shall expire and be deemed
2 repealed therewith;
3 (b) the amendments to the opening paragraph of section 301-c of the
4 tax law as made by section five of this act shall be subject to the
5 expiration and reversion of such paragraph pursuant to section 19 of
6 part W-1 of chapter 109 of the laws of 2006, as amended, when upon such
7 date the provisions of section five-a of this act shall take effect;
8 (c) the amendments to subdivisions (n) and (o) of section 301-c made
9 by section seven of this act shall not affect the expiration and repeal
10 of such subdivisions and shall expire and be deemed repealed therewith;
11 and
12 (d) the amendments to subdivision (j) of section 1115 of the tax law
13 made by section seventeen of this act shall be subject to the expiration
14 and reversion of such subdivision pursuant to section 19 of part W-1 of
15 chapter 109 of the laws of 2006, as amended, when upon such date the
16 provisions of section seventeen-a of this act shall take effect.
