N.Y. Tax Law § 182: Additional franchise tax on certain oil companies

§ 182. Additional franchise tax on certain oil companies. 1.

Notwithstanding any other provision of this chapter, or of any other

law, for taxable years ending on or after June eighteenth, nineteen

hundred eighty but before December thirty-first, nineteen hundred

eighty-three, an annual tax is hereby imposed upon every oil company

equal to two per centum of its gross receipts from all sources, or the

portion thereof allocated within the state as hereinafter provided, for

the privilege of exercising its corporate franchise, or of doing

business, or of employing capital, or of owning or leasing property in

this state in a corporate or organized capacity, or of maintaining an

office in this state, for all or any part of each of its taxable years.

In no event shall the tax imposed by this section be less than two

hundred fifty dollars.

2. As used in this section: (a) The term "oil company" means every

vertically integrated petroleum corporation or affiliate thereof formed

for or engaged in the business of importing or causing to be imported

into this state for sale in this state, extracting, producing, refining,

manufacturing, compounding or selling petroleum. For purposes of this

section, petroleum shall include, but shall not be limited to, gasoline,

aviation fuel, kerosene, diesel motor fuel, benzol, distillate fuels,

residual oil, crude oil or any similar product; a vertically integrated

petroleum corporation or affiliate thereof means any domestic or foreign

corporation, which, either for its own account or with affiliates: (i)

extract or produces in excess of one hundred thousand average barrels of

crude oil per day, (ii) has a refining capacity in excess of one hundred

seventy-five thousand average barrels of crude oil per day, and (iii)

market or distributors for marketing gasoline, motor fuels, fuel oils,

and similar products derived from the refining or manufacture of crude

oil, whether such activities are carried on directly or indirectly in

conjunction with or by means of an affiliate or affiliates; and

affiliate means a corporation in which more than fifty per centum of the

number of shares of stock entitling the holders thereof to vote for the

election of directors or trustees is owned, directly or indirectly, by

the vertically integrated petroleum corporation or affiliate thereof.

(b) The term "gross receipts" means all receipts, whether from within

or without the United States, whether in cash, credits or property of

any kind or nature, without any deduction therefrom on account of the

cost of the property sold, the cost of materials used, labor or

services, or other costs, interest or discount paid, or any other

expense whatsoever but excluding such receipts which constitute

consideration received by the oil company for the issuance or sale of

shares of its capital stock or money lent to such company. Receipts

received by reason of any sale of fuel oil (excluding diesel motor fuel)

used for residential purposes shall not be included in gross receipts.

Provided, however, gross receipts shall not include the receipts from

any sale for resale to a purchaser which is an oil company subject to

tax under this section. It shall be presumed that no receipts are

receipts from a sale for resale to such purchaser unless such purchaser

furnishes the oil company with a resale certificate in such form and

under such terms and conditions as the tax commission may prescribe and

such certificate is accepted in good faith by such oil company.

(c) The term "corporation" includes a corporation, joint stock company

or association and any business conducted by a trustee or trustees

wherein interest or ownership is evidenced by certificate or other

written instrument.

(d) The term "taxable year" means the oil company's taxable year for

federal income tax purposes, or the part thereof during which such oil

company is subject to tax under this section.

3. (a) The portion of the gross receipts of an oil company to be

allocated within the state shall be determined as follows: multiply its

gross receipts by an allocation percentage to be determined by

ascertaining the percentage which the receipts of such oil company,

computed on the cash or accrual basis according to the method of

accounting used in the computation of its gross receipts, arising during

the period covered by its report from (1) sales of its tangible personal

property where shipments are made to points within this state, (2)

services performed within the state, (3) rentals from property situated,

and royalties from the use of patents or copyrights, within the state,

and (4) all other business receipts earned within the state, bear to the

total amount of the oil company's receipts, similarly computed, arising

during such period from all sales of its tangible personal property,

services, rentals, royalties and all other business transactions,

whether within or without the state. Receipts received by reason of any

sale of fuel oil used for residential purposes and receipts from any

sale for resale to a purchaser which is an oil company subject to tax

under this section shall be included as a receipt in the computation of

the allocation percentage.

(b) Where the tax commission decides that with respect to a certain

oil company the method prescribed above does not fairly and equitably

reflect its gross receipts from all sources within the state, the tax

commission shall prescribe methods of allocation which fairly and

equitably reflect gross receipts from all sources within the state.

4. Every oil company subject to tax under this section shall keep such

records of its business in such form as the tax commission may require,

and such records shall be preserved for a period of three years, except

that the tax commission may consent to their destruction within that

period or may require that they be kept longer.

5. Every oil company subject to tax hereunder shall annually file on

or before the fifteenth day of the third month following the close of

its taxable year a return which shall state the gross receipts for the

period covered by such return. Returns shall be filed with the tax

commission in a form prescribed by it setting forth such information as

the tax commission may prescribe. Every oil company subject to tax

hereunder which ceases to exercise its franchise or to be subject to the

tax imposed by this section shall transmit to the tax commission a

return on the date of such cessation or at such other time as the tax

commission may require covering each year or period for which no return

was theretofore filed. Notwithstanding the foregoing provisions of this

subdivision, the tax commission may require any oil company to file an

annual return, which shall contain any data specified by it, regardless

of whether the oil company is subject to tax under this section.

6. If any provision of this section conflicts with any other provision

contained in this article, the provisions of this section shall control,

but the provisions of this article which do not conflict with the

provisions of this section shall apply with respect to the taxes under

this section, insofar as they are, or may be made, applicable.

7. Any corporation which is subject to tax under section one hundred

eighty-three, one hundred eighty-four, one hundred eighty-five or one

hundred eighty-six of this chapter shall not be subject to tax under

this section.

8. An oil company which is not incorporated or organized under the

laws of this state shall not be deemed to be doing business, employing

capital, owning or leasing property, or maintaining an office in this

state, for the purposes of this section, by reason of (a) the

maintenance of cash balances with banks or trust companies in this

state, or (b) the ownership of shares of stock or securities kept in

this state, if kept in a safe deposit box, safe, vault or other

receptacle rented for the purpose, or if pledged as collateral security,

or if deposited with one or more banks or trust companies, or brokers

who are members of a recognized security exchange, in safekeeping or

custody accounts, or (c) the taking of any action by any such bank or

trust company or broker, which is incidental to the rendering of

safekeeping or custodian service to such oil company, or (d) the

maintenance of an office in this state by one or more officers or

directors of the oil company who are not employees of the oil company if

the company otherwise is not doing business in this state, and does not

employ capital or own or lease property in this state, or (e) the

keeping of books or records of an oil company in this state if such

books or records are not kept by employees of such oil company and such

oil company does not otherwise do business, employ capital, own or lease

property or maintain an office in this state, or (f) any combination of

the foregoing activities.

9. Any receiver, referee, trustee, assignee or other fiduciary, or any

officer or agent appointed by any court, who conducts the business of

any oil company shall be subject to the tax imposed by this section in

the same manner and to the same extent as if the business were conducted

by the agents or officers of such oil company. A dissolved oil company

which continues to conduct business shall also be subject to the tax

imposed by this section.

10. Where a false or fraudulent resale certificate has been furnished

to an oil company, the corporation furnishing such certificate shall be

subject to a penalty equal to three per centum of the gross receipts

which would have otherwise been taxable to such oil company if such

certificate had not been furnished to such company. Such penalty shall

be assessed, collected and paid in the same manner as the addition to

tax with respect to a deficiency due to fraud provided for in subsection

(e) of section one thousand eighty-five of this chapter is assessed,

collected and paid.

11. If any amount of tax imposed by this section is not paid prior to

September first, nineteen hundred eighty-three, interest on such amount

at double the underpayment rate set by the commissioner of taxation and

finance pursuant to section one thousand ninety-six of this chapter, or

if no rate is set, at the rate of twelve percent per annum shall be paid

for the period from such date to the date paid, whether or not any

extension of time for payment was granted; provided, however, that the

rate charged shall not exceed the maximum rate allowed pursuant to

section 190.42 of the penal law. This subdivision shall apply with

respect to taxes, or any portion thereof, which are overdue on or after

September first, nineteen hundred eighty-three and shall apply only with

respect to interest computed or computable for periods or portions of

periods occurring on or after such date.

12. All taxes, interest and penalties collected or received by the tax

commission under the taxes and penalties imposed by this section shall

be deposited daily in one account with such responsible banks, banking

houses or trust companies as may be designated by the comptroller, to

the credit of the comptroller. Such an account may be established in one

or more of such depositories. Such deposits shall be kept separate and

apart from all other money in the possession of the comptroller. The

comptroller shall require adequate security from all such depositories.

Of the total revenue collected or received under this section, the

comptroller shall retain in his hands such amount as the commissioner of

taxation and finance may determine to be necessary for refunds under

this section, out of which amount the comptroller shall pay any refunds

to which oil companies shall be entitled under the provisions of this

section. After reserving the amount required to pay such refunds, the

comptroller shall deposit all remaining revenue pursuant to the

provisions of subdivision one of section one hundred seventy-one-a of

this chapter.