This bill has been amended

Bill S782-2013

Provides motor fuel tax exemption for sales of diesel motor fuel made to commercial fishermen

Eliminates provisions of law that require the payment and subsequent refund of the ten cent diesel excise tax and sales tax on diesel motor fuel when sold to operators of commercial fishing vessels for use in the operation of such vessels.

Details

Actions

  • Apr 30, 2013: REPORTED AND COMMITTED TO FINANCE
  • Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Votes

VOTE: COMMITTEE VOTE: - Investigations and Government Operations - Apr 30, 2013
Ayes (9): Marcellino, Carlucci, Golden, Nozzolio, O'Mara, Zeldin, Hoylman, Diaz, Squadron

Memo

BILL NUMBER:S782

TITLE OF BILL: An act to amend the tax law, in relation to providing an exemption from the payment of the motor fuels tax and the sales tax on motor fuels used in the operation of commercial fishing vessels

PURPOSE: Provides a motor fuel tax exemption for sales of diesel motor fuel made to commercial fishermen.

SUMMARY OF PROVISIONS: This bill amends the tax law in order to eliminate the statute that requires the payment and subsequent refund of the eight cent diesel excise tax and the sales tax on diesel fuel when sold to operators of commercial fishing vessels. Under the current law, both taxes must be paid by commercial fishermen, notwithstanding their exempt status from these taxes. The commercial fishermen are then allowed to file for a refund of these taxes from the Department of Taxation and Finance.

JUSTIFICATION: The original intent of this policy, as it relates to commercial fishing vessels, was to prevent tax evasion in the diesel fuel industry. However, it was not intended to be burdensome to many of the state's industries such as commercial fishermen and their fuel distributors.

The implementation of this law has caused a great deal of hardship for commercial fishermen. A fisherman, operating a trawler vessel burning 85,000 gallons per year, must advance approximately $13,600 annually in taxes to the State. The negative financial consequences of this cash flow are a large burden for the commercial fishermen of this state.

The negative impacts of this law have also been carried over to the fuel distributors of the commercial fishermen. Because of the payment requirement, many fishermen are now purchasing their fuel at ports outside of New York. This will result in the loss of thousands of dollars in revenue for the state's fuel distributors. This legislation would no longer require commercial fishermen to pay any excise or state sales taxes for the purchase of diesel motor fuel.

LEGISLATIVE HISTORY: 2012 S.6879; 2009-10 A.1903A; 2007-08 A.989; 2005-06 A.3854; 2003-04 A.1416; 2001-02 A.2289; 1999-00 A.2840A.

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: This act shall take effect on the first day of a sales tax quarterly period, as described in subdivision (b) of Section 1136 of the tax law, next commencing at least ninety days after this act shall have become law, sections four and five of this act shall apply to sales

made under and uses occurring on or after the dates such sections four and five shall have taken effect, respectively, although made or occurring under a prior contract; and provided further that the amendments made by section four of this act shall be subject to the expiration and reversion of such subdivision pursuant to Section 19 of part W-1 of Chapter 109 of the laws of 2006, as amended, when upon such date the provisions of section five of this act shall take effect.


Text

STATE OF NEW YORK ________________________________________________________________________ S. 782 A. 138 2013-2014 Regular Sessions S E N A T E - A S S E M B L Y (PREFILED) January 9, 2013 ___________
IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print- ed, and when printed to be committed to the Committee on Investi- gations and Government Operations IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to providing an exemption from the payment of the motor fuels tax and the sales tax on motor fuels used in the operation of commercial fishing vessels THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph (b) of subdivision 3 of section 282-a of the tax law, as amended by section 2 of part E of chapter 59 of the laws of 2012, is amended to read as follows: (b) The tax on the incidence of sale or use imposed by subdivision one of this section shall not apply to: (i) the sale or use of non-highway Diesel motor fuel, but only if all of such fuel is consumed other than on the public highways of this state (except for the use of the public highway by farmers to reach adjacent farmlands); provided, however, this exemption shall in no event apply to a sale of non-highway Diesel motor fuel which involves a delivery at a filling station or into a repository which is equipped with a hose or other apparatus by which such fuel can be dispensed into the fuel tank of a motor vehicle (except for delivery at a farm site which qualifies for the exemption under subdivision (g) of section three hundred one-b of this chapter); or (ii) a sale to the consumer consisting of not more than twenty gallons of water-white kero- sene to be used and consumed exclusively for heating purposes; or (iii) the sale to or delivery at a filling station or other retail vendor of water-white kerosene provided such filling station or other retail vendor only sells such water-white kerosene exclusively for heating
purposes in containers of no more than twenty gallons; or (iv) a sale of kero-jet fuel to an airline for use in its airplanes or a use of kero- jet fuel by an airline in its airplanes; or (v) a sale of kero-jet fuel by a registered distributor of Diesel motor fuel to a fixed base opera- tor registered under this article as a distributor of kero-jet fuel only where such fixed base operator is engaged solely in making or offering to make retail sales not in bulk of kero-jet fuel directly into the fuel tank of an airplane for the purpose of operating such airplane; (vi) a retail sale not in bulk of kero-jet fuel by a fixed base operator regis- tered under this article as a distributor of kero-jet fuel only where such fuel is delivered directly into the fuel tank of an airplane for use in the operation of such airplane; or (vii) the sale of previously untaxed qualified biodiesel to a person registered under this article as a distributor of Diesel motor fuel other than (A) a retail sale to such person or (B) a sale to such person which involves a delivery at a fill- ing station or into a repository which is equipped with a hose or other apparatus by which such qualified biodiesel can be dispensed into the fuel tank of a motor vehicle; OR (VIII) A SALE OF DIESEL MOTOR FUEL TO A "COMMERCIAL FISHERMAN", AS SUCH TERM IS DEFINED IN SUBDIVISION (I) OF SECTION THREE HUNDRED OF THIS CHAPTER, AT RETAIL UNDER THE CIRCUMSTANCES SET FORTH IN PARAGRAPH ONE OF SUBDIVISION (G) OF SECTION THREE HUNDRED ONE-C OF THIS CHAPTER, AND WHERE SUCH COMMERCIAL FISHING VESSEL IS OPER- ATED BY A COMMERCIAL FISHERMAN. S 2. Subdivision 4 of section 282-a of the tax law, as amended by section 5 of part K of chapter 61 of the laws of 2011, is amended to read as follows: 4. The tax imposed by this section on Diesel motor fuel shall be passed through by the seller and included as part of the selling price to each purchaser of such fuel. Provided, however, the amount of the tax imposed by this section may be excluded from the selling price of Diesel motor fuel where (i) a sale of Diesel motor fuel is made to an organiza- tion described in paragraph (a) of subdivision three of this section solely for the purpose stated therein; (ii) a sale of non-highway Diesel motor fuel is made to a consumer but only if such non-highway Diesel motor fuel is not delivered to a filling station, nor delivered into a storage tank which is equipped with a hose or other apparatus by which such fuel can be dispensed into the fuel tank of a motor vehicle; or (iii) the sale to or delivery at a filling station or other retail vendor of water-white kerosene provided such filling station or other retail vendor only sells such water-white kerosene exclusively for heat- ing purposes in containers of no more than twenty gallons; or (iv) a sale of kero-jet fuel is made to an airline for use in its airplanes; OR (V) A SALE OF DIESEL MOTOR FUEL IS MADE TO A "COMMERCIAL FISHERMAN", AS SUCH TERM IS DEFINED IN SUBDIVISION (I) OF SECTION THREE HUNDRED OF THIS CHAPTER, AT RETAIL UNDER THE CIRCUMSTANCES SET FORTH IN PARAGRAPH ONE OF SUBDIVISION (G) OF SECTION THREE HUNDRED ONE-C OF THIS CHAPTER, AND WHERE SUCH COMMERCIAL FISHING VESSEL IS OPERATED BY A COMMERCIAL FISHER- MAN. S 3. Section 301-b of the tax law is amended by adding a new subdivi- sion (j) to read as follows: (J) SALES OR USES OF DIESEL MOTOR FUEL AND RESIDUAL PETROLEUM PRODUCT FOR COMMERCIAL FISHING. DIESEL MOTOR FUEL OR RESIDUAL PETROLEUM PRODUCT SOLD TO OR USED BY A "COMMERCIAL FISHERMAN", AS SUCH TERM IS DEFINED IN SUBDIVISION (I) OF SECTION THREE HUNDRED OF THIS ARTICLE, AT RETAIL UNDER THE CIRCUMSTANCES SET FORTH IN PARAGRAPH ONE OF SUBDIVISION (G) OF
SECTION THREE HUNDRED ONE-C OF THIS ARTICLE, AND WHERE SUCH COMMERCIAL FISHING VESSEL IS OPERATED BY A COMMERCIAL FISHERMAN. S 4. Subdivision (j) of section 1115 of the tax law, as amended by section 41 of part K of chapter 61 of the laws of 2011, is amended to read as follows: (j) The exemptions provided in this section shall not apply to the tax required to be prepaid pursuant to the provisions of section eleven hundred two of this article nor to the taxes imposed by sections eleven hundred five and eleven hundred ten of this article with respect to receipts from sales and uses of motor fuel or diesel motor fuel, except that the exemptions provided in paragraphs nine and forty-two of subdi- vision (a) of this section shall apply to the tax required to be prepaid pursuant to the provisions of section eleven hundred two of this article and to the taxes imposed by sections eleven hundred five and eleven hundred ten of this article with respect to sales and uses of kero-jet fuel, CNG, hydrogen and E85, provided, however, the exemption allowed for E85 shall be subject to the additional requirements provided in section eleven hundred two of this article with respect to E85 AND EXCEPT THAT THE EXEMPTION PROVIDED IN PARAGRAPH TWENTY-FOUR OF SUBDIVI- SION (A) OF THIS SECTION SHALL APPLY TO THE TAXES IMPOSED BY SECTIONS ELEVEN HUNDRED FIVE AND ELEVEN HUNDRED TEN OF THIS ARTICLE WITH RESPECT TO SALES AND USES OF DIESEL MOTOR FUEL USED IN THE OPERATION OF A FISH- ING VESSEL AS DESCRIBED IN PARAGRAPH TWENTY-FOUR OF SUBDIVISION (A) OF THIS SECTION. The exemption provided in subdivision (c) of this section shall apply to sales and uses of non-highway diesel motor fuel but only if all of such fuel is consumed other than on the public highways of this state. The exemption provided in subdivision (c) of this section shall apply to sales and uses of non-highway diesel motor fuel for use or consumption either in the production for sale of tangible personal property by farming or in a commercial horse boarding operation, or in both but only if all of such fuel is consumed other than on the public highways of this state (except for the use of the public highways to reach adjacent farmlands or adjacent lands used in a commercial horse boarding operation, or both). S 5. Subdivision (j) of section 1115 of the tax law, as amended by section 41-a of part K of chapter 61 of the laws of 2011, is amended to read as follows: (j) The exemptions provided in this section shall not apply to the tax required to be prepaid pursuant to the provisions of section eleven hundred two of this article nor to the taxes imposed by sections eleven hundred five and eleven hundred ten of this article with respect to receipts from sales and uses of motor fuel or diesel motor fuel, except that the exemption provided in paragraph nine of subdivision (a) of this section shall apply to the tax required to be prepaid pursuant to the provisions of section eleven hundred two of this article and to the taxes imposed by sections eleven hundred five and eleven hundred ten of this article with respect to sales and uses of kero-jet fuel AND EXCEPT THAT THE EXEMPTION PROVIDED IN PARAGRAPH TWENTY-FOUR OF SUBDIVISION (A) OF THIS SECTION SHALL APPLY TO THE TAXES IMPOSED BY SECTIONS ELEVEN HUNDRED FIVE AND ELEVEN HUNDRED TEN OF THIS ARTICLE WITH RESPECT TO SALES AND USES OF DIESEL MOTOR FUEL USED IN THE OPERATION OF A FISHING VESSEL AS DESCRIBED IN PARAGRAPH TWENTY-FOUR OF SUBDIVISION (A) OF THIS SECTION. The exemption provided in subdivision (c) of this section shall apply to sales and uses of non-highway diesel motor fuel but only if all of such fuel is consumed other than on the public highways of this state. The exemption provided in subdivision (c) of this section
shall apply to sales and uses of non-highway diesel motor fuel for use or consumption either in the production for sale of tangible personal property by farming or in a commercial horse boarding operation, or in both but only if all of such fuel is consumed other than on the public highways of this state (except for the use of the public highways to reach adjacent farmlands or adjacent lands used in a commercial horse boarding operation, or both). S 6. This act shall take effect on the first day of a sales tax quar- terly period, as described in subdivision (b) of section 1136 of the tax law, next commencing at least ninety days after this act shall have become a law; sections four and five of this act shall apply to sales made under and uses occurring on or after the dates such sections four and five shall have taken effect, respectively, although made or occur- ring under a prior contract; and provided further that such amendments made by section four of this act shall be subject to the expiration and reversion of such subdivision pursuant to section 19 of part W-1 of chapter 109 of the laws of 2006, as amended, when upon such date the provisions of section five of this act shall take effect.

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