N.Y. Tax Law § 301-b: Exemptions

§ 301-b. Exemptions. The following gallonage otherwise includable in

the measure of the tax imposed by section three hundred one-a of this

article on a petroleum business shall be exempt from the measure of tax

on such petroleum business:

(a) Products. (1) Kerosene sold or used by a petroleum business which

is registered under article twelve-A of this chapter as a distributor of

diesel motor fuel so long as (i) such product has not been blended or

mixed with any other product constituting diesel motor fuel or motor

fuel or a residual petroleum product and (ii) such product is not used

by the petroleum business as fuel to operate a motor vehicle or sold by

such petroleum business to a consumer for use as fuel to operate a motor

vehicle.

(2) Kero-jet fuel (i) sold by a petroleum business which is registered

under article twelve-A of this chapter as a distributor of diesel motor

fuel to a consumer for use exclusively as jet aircraft fuel or to a

petroleum business registered under such article twelve-A 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, (ii) used by a petroleum business,

registered under article twelve-A of this chapter as a distributor of

diesel motor fuel, exclusively as jet aircraft fuel, or (iii) sold at

retail not in bulk by a petroleum business registered under article

twelve-A of this chapter as a "distributor of kero-jet fuel only" where

such fuel is delivered directly into the fuel tank of a jet airplane for

use in the operation of such airplane.

(3) Aviation gasoline, meeting the specifications set forth in

American Standard Testing Material Specification D910 or Military

Specification MIL-G-5572, which is imported or caused to be imported

into this state by a petroleum business which is registered under

article twelve-A of this chapter as a distributor of motor fuel or

produced, refined, manufactured or compounded in this state by such a

petroleum business.

(4) Residual petroleum product sold by a petroleum business registered

under this article as a residual petroleum product business if such

product is sold by such petroleum business to a consumer for use

exclusively as bunker fuel for vessels or if such product is used by

such petroleum business exclusively as bunker fuel in its own vessels.

(5) Liquefied petroleum gases, such as butane, ethane or propane.

* (6) E85 imported or caused to be imported into this state or

produced, refined, manufactured or compounded in this state by a

petroleum business registered under article twelve-A of this chapter, as

a distributor of motor fuel, and then sold by such petroleum business

and delivered to a filling station and placed in a storage tank of such

filling station for such E85 to be dispensed directly into a motor

vehicle for use in the operation of such vehicle.

* NB Repealed September 1, 2031

* (7)(i) Partial B20 exemption. B20 imported or caused to be imported

into this state or produced, refined, manufactured or compounded in this

state by a petroleum business registered under article twelve-A of this

chapter, as a distributor of diesel motor fuel, and then sold by such

petroleum business.

(ii) Calculation of partial exemption. The amount of the partial

exemption under this paragraph shall be determined by multiplying the

quantity of B20 times twenty percent of the applicable taxes otherwise

imposed by this article on such fuel.

* NB Repealed September 1, 2031

* (8) CNG or hydrogen.

* NB Repealed September 1, 2031

(b) Export. (1) Motor fuel imported or caused to be imported into this

state or produced, refined, manufactured or compounded in this state by

a petroleum business registered under article twelve-A of this chapter,

as a distributor of motor fuel, where

(A) such petroleum business or the immediate purchaser of such motor

fuel exports such motor fuel from this state for sale or use outside the

state,

(B) such petroleum business or such purchaser, as the case may be,

exporting such fuel is duly registered with or licensed by the taxing

authorities of the state to which such fuel is exported as a distributor

or a dealer in the product being so exported,

(C) in connection with the exportation, such fuel was immediately

shipped to an identified facility in the state to which such fuel is

exported, and

(D) the rules and regulations of the commissioner of taxation and

finance relating to evidentiary requirements are complied with.

(2) Highway diesel motor fuel imported or caused to be imported into

this state or produced, refined, manufactured or compounded in this

state by a petroleum business registered under article twelve-A of this

chapter, as a distributor of diesel motor fuel, which is sold by such

petroleum business to a purchaser who then exports such highway diesel

motor fuel from this state for sale or use outside the state where

(A) such purchaser exporting such fuel is duly registered with or

licensed by the taxing authorities of the state to which such fuel is

exported as a distributor or a dealer in the product being so exported,

(B) in connection with the exportation, such fuel was immediately

shipped to an identified facility in the state to which such fuel is

exported, and

(C) the rules and regulations of the commissioner relating to

evidentiary requirements are complied with.

(3) For the purpose of this article, "export" from this state shall in

no event be construed to include motor fuel or diesel motor fuel taken

out of this state in the fuel tank connected with the engine of a motor

vehicle or any conveyance and consumed in the operation thereof outside

of this state.

(c) Sales to New York state and the federal government. (1) Motor fuel

imported or caused to be imported into this state or produced, refined,

manufactured or compounded in this state by a petroleum business

registered under article twelve-A of this chapter, as a distributor of

motor fuel, and then sold by such petroleum business to an organization

described in paragraph one or two of subdivision (a) of section eleven

hundred sixteen of this chapter where such motor fuel is used by such

organization for its own use or consumption.

(2) Highway diesel motor fuel imported or caused to be imported into

this state or produced, refined, manufactured or compounded by a

petroleum business registered under article twelve-A of this chapter, as

a distributor of diesel motor fuel, and then sold by such petroleum

business to an organization described in paragraph one or two of

subdivision (a) of section eleven hundred sixteen of this chapter where

such highway diesel motor fuel is used by such organization for its own

use or consumption.

(3) Non-highway Diesel motor fuel sold by a petroleum business

registered under article twelve-A of this chapter as a distributor of

diesel motor fuel to an organization described in paragraph one or two

of subdivision (a) of section eleven hundred sixteen of this chapter

where such non-highway diesel motor fuel is used by such organization

for its own use or consumption.

(4) Residual petroleum product sold by a petroleum business registered

under this article as a residual petroleum product business to an

organization described in paragraph one or two of subdivision (a) of

section eleven hundred sixteen of this chapter where such product is

used by such organization for its own use or consumption.

(d) Sales to consumers for heating purposes. (1) Total residential

heating exemption. Non-highway diesel motor fuel sold by a petroleum

business registered under article twelve-A of this chapter as a

distributor of diesel motor fuel or residual petroleum product sold by a

petroleum business registered under this article as a residual petroleum

product business to the consumer exclusively for residential heating

purposes only if such non-highway diesel motor fuel is delivered into a

storage tank which is not equipped with a hose or other apparatus by

which such fuel can be dispensed into the fuel tank of a motor vehicle

and such storage tank is attached to the heating unit burning such fuel.

(2) Partial non-residential heating exemption. (A) Non-highway diesel

motor fuel sold by a petroleum business registered under article

twelve-A of this chapter as a distributor of diesel motor fuel or

residual petroleum product sold by a petroleum business registered under

this article as a residual petroleum product business to the consumer

exclusively for heating, other than residential heating purposes only if

such non-highway diesel motor fuel is delivered into a storage tank

which is not equipped with a hose or other apparatus by which such fuel

can be dispensed into the fuel tank of a motor vehicle and such storage

tank is attached to the heating unit burning such fuel

(B) Calculation of partial exemption. The partial exemption under this

paragraph shall be determined by multiplying the quantity of non-highway

diesel motor fuel and residual petroleum product eligible for the

exemption times the sum of the then current rate of the supplemental tax

imposed by section three hundred one-j of this article and forty-six

percent of the then current rate of the tax imposed by section three

hundred one-a of this article, with respect to the specific non-highway

diesel motor fuel or residual petroleum product rate, as the case may

be.

(e) Sales of highway diesel motor fuel, qualified biodiesel,

non-highway diesel motor fuel and residual petroleum product to

registered distributors of diesel motor fuel and registered residual

petroleum product businesses.

(1) The sale of previously untaxed highway diesel motor fuel by a

person registered under article twelve-A of this chapter as a

distributor of diesel motor fuel to a person registered under such

article twelve-A as a distributor of diesel motor fuel where the highway

diesel motor fuel is either: (A) being delivered by pipeline, railcar,

barge, tanker or other vessel to a terminal, the operator of which

terminal is registered under section two hundred eighty-three-b of this

chapter, or (B) within such a terminal where it has been so delivered.

Provided, however, that the exemption set forth in this paragraph shall

not apply to any highway diesel motor fuel if it is removed from a

terminal, other than by pipeline, barge, tanker or other vessel.

(2) Qualified biodiesel and non-highway diesel motor fuel sold by a

person registered under article twelve-A of this chapter as a

distributor of diesel motor fuel to a person registered under such

article twelve-A as a distributor of diesel motor fuel where such sale

is not a retail sale or a sale that involves a delivery at a filling

station or into a repository equipped with a hose or other apparatus by

which such qualified biodiesel or non-highway diesel motor fuel can be

dispensed into the fuel tank of a motor vehicle.

(3) Residual petroleum product sold by a person registered under this

article as a residual petroleum product business to a person registered

under this article as a residual petroleum product business where such

sale is not a retail sale. Provided, however, that the commissioner may

require such documentary proof to qualify for any exemption provided in

this section as the commissioner deems appropriate, including the

expansion of any certifications required pursuant to section two hundred

eighty-five-a or two hundred eighty-five-b of this chapter to cover the

taxes imposed by this article.

(4) "Qualified biodiesel" means such term as defined in subdivision

twenty-three of section two hundred eighty-two of this chapter.

(f) Utilities. (1) Residual petroleum product and non-highway diesel

motor fuel sold to an electric corporation, as described in subdivision

(a) of section three hundred one-d of this article, which is registered

with the department as a petroleum business tax direct pay permittee,

and used by such electric corporation to fuel generators for the purpose

of manufacturing or producing electricity where such electric

corporation provides a copy of a direct pay permit authorized and issued

by the commissioner, to the petroleum business making such sale. If so

registered, such corporation shall be a taxpayer under this article and

(i) such electric corporation shall file a return monthly and pay the

applicable tax under this article, after the application of allowable

credits, on all such purchases directly to the commissioner, (ii) such

electric corporation shall be subject to all of the provisions of this

article relating to the responsibilities and liabilities of taxpayers

under this article with respect to such residual petroleum product and

non-highway diesel motor fuel.

(2) If a direct payment permit is granted, its use shall be subject to

conditions specified by the commissioner and the payment of tax on all

product purchased pursuant to the permit shall be made directly to the

commissioner by the permit holder. The commissioner may suspend or

cancel a direct payment permit for any of the grounds for suspending or

cancelling a registration pursuant to section three hundred two of this

article and the notice and hearing provisions applicable under such

section three hundred two of this article shall apply to the suspension

and cancellation of direct payment permits.

(3) A sale to an electric corporation authorized to issue direct

payment permits which furnishes a direct payment permit in proper form

shall, with respect to the seller, not be subject to tax under this

article unless such electric corporation's direct payment permit has

been suspended or cancelled by the commissioner and the commissioner has

provided petroleum businesses with information identifying persons whose

direct payment permits have been suspended or cancelled or such seller

has been provided information that the purchaser's direct payment permit

has been cancelled or suspended. Where a seller accepts a direct payment

permit from a person whose direct payment permit has been suspended or

cancelled, and the commissioner has provided petroleum businesses with

information identifying those persons whose direct payment permits have

been suspended or cancelled or where the seller has been provided

information that the purchaser's direct payment permit has been

suspended or cancelled, such sale shall be subject to tax at the full

applicable rate.

(g) Sales or uses of non-highway diesel motor fuel and residual

petroleum product for farm production. Non-highway Diesel motor fuel or

residual petroleum product sold to or used by a consumer who purchases

or uses such non-highway Diesel motor fuel or product for use or

consumption directly and exclusively in the production for sale of

tangible personal property by farming, but only if all such non-highway

Diesel motor fuel or product is delivered on the farm site and is

consumed other than on the public highways of this state (except for the

use of the public highway to reach adjacent farmlands).

(h) Exemption for certain not-for-profit organizations. There shall be

exempt from the measure of the petroleum business tax imposed by section

three hundred one-a of this article a sale or use of residual petroleum

product, or non-highway diesel motor fuel to or by an organization which

has qualified under paragraph four or five of subdivision (a) of section

eleven hundred sixteen of this chapter where such non-highway diesel

motor fuel or residual petroleum product is exclusively for use and

consumption by such organization, but only if all of such non-highway

diesel motor fuel or product is consumed other than on the public

highways of this state. 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 non-highway Diesel motor

fuel can be dispensed into the fuel tank of a motor vehicle and all

deliveries hereunder shall be made to the premises occupied by the

qualifying organization and used by such organization in furtherance of

the exempt purposes of such organization. Provided, however, that the

commissioner shall require such documentary proof to qualify for any

exemption provided herein as the commissioner deems appropriate.

Provided, further, the distributor selling such non-highway Diesel motor

fuel and product shall separately report on its return the gallonage

sold during the reporting period exempt from tax under the provisions of

this subdivision and provide such other information with respect to such

sales as the commissioner deems appropriate to prevent evasion.

(i) Exemption for passenger commuter ferries. A use by a passenger

commuter ferry of non-highway diesel motor fuel or residual petroleum

product where such non-highway diesel motor fuel or residual petroleum

product was used and consumed by a passenger commuter ferry exclusively

in providing mass transportation service. Provided, that the

commissioner shall require such documentary proof to qualify for any

exemption provided hereunder as the commissioner deems appropriate.

(j) Exemption for tugboats and towboats. The use by a tugboat or

towboat of motor fuel, diesel motor fuel, or residual petroleum product.

Provided, that the commissioner shall require such documentary proof to

qualify for any exemption provided hereunder as the commissioner deems

appropriate.