N.Y. Tax Law § 302: Registration of petroleum businesses

§ 302. Registration of petroleum businesses. (a) Registration

required. Each petroleum business with respect to motor fuel must be

registered with the department of taxation and finance as a distributor

of motor fuel under article twelve-A of this chapter. Each petroleum

business with respect to diesel motor fuel must be registered with the

department of taxation and finance as a distributor of diesel motor fuel

under article twelve-A of this chapter or, where applicable, as a

"distributor of kero-jet fuel only" under such article. Each petroleum

business with respect to residual petroleum product must be registered

as a residual petroleum product business under subdivision (b) of this

section. No petroleum business unless so registered, shall make any

sale, transfer, use or other disposition of motor fuel, diesel motor

fuel or residual petroleum product within the state, except a sale,

transfer, use or other disposition, if any, as to which the state cannot

impose such condition by reason of the United States constitution and of

laws of the United States enacted pursuant thereto. No person, unless

registered as a residual petroleum product business under this section,

shall (i) import or cause residual petroleum product to be imported into

this state, (ii) produce, refine, manufacture or compound residual

petroleum product within the state, or (iii) make a sale or use of

residual petroleum product in the state other than a self-use of

residual petroleum product which has been the subject of a retail sale

to such person.

(b) Residual petroleum product business. The department, upon the

application of a corporation or unincorporated business, shall register

such corporation or unincorporated business as a residual petroleum

product business except that the commissioner may refuse to register an

applicant for any of the grounds specified in subdivision two or five of

section two hundred eighty-three of this chapter or in subdivision (d)

of this section. The application shall be in such form and contain such

information as the commissioner shall prescribe. All of the provisions

of subdivisions two, four, five, six, seven, eight, nine and ten of

section two hundred eighty-three of this chapter relating to

registration of distributors shall be applicable to the registration of

residual petroleum product businesses under this section with the same

force and effect as if the language of those subdivisions had been

incorporated in full in this section and had expressly referred to the

registration of residual petroleum product businesses and the tax

imposed by this article, with such modification as may be necessary in

order to adapt the language of such provisions to the provisions of this

article, provided, specifically, that the term "distributor" shall be

read as "residual petroleum product business" and the term "motor fuel"

shall be read as "residual petroleum product". Provided, however, that

if the commissioner is satisfied that the requirements of such

provisions for registration are not necessary in order to protect tax

revenues, the commissioner may limit or modify such requirements with

respect to corporations or unincorporated businesses not required to be

registered as distributors of motor fuel or diesel motor fuel.

(c) Bond or other security. The commissioner may require a petroleum

business to file with it a bond issued by a surety company approved by

the superintendent of financial services as to solvency and

responsibility and authorized to transact business in this state or

other security acceptable to the commissioner, in such amount as the

commissioner may fix in an amount determined in accordance with rules

and regulations prescribed by the commissioner, to secure the payment of

any sums due from such petroleum business pursuant to this article. The

commissioner may require that such a bond or other security be filed

before a petroleum business is registered, and the amount thereof may be

increased at any time when in the commissioner's judgment the same is

necessary as a protection to the revenues under this article. If

securities are deposited as security under this subdivision, such

securities shall be kept in the joint custody of the comptroller and the

commissioner of taxation and finance. Such securities may be sold by the

commissioner if it becomes necessary so to do in order to recover any

sums due from such petroleum business pursuant to this article, but no

such sale shall be had until after such petroleum business shall have

had opportunity to litigate the validity of any tax if it elects so to

do. Upon any such sale the surplus, if any, above the sums due under

this article shall be returned to such petroleum business. All of the

provisions of paragraph (b) of subdivision six of section two hundred

eighty-three of this chapter relating to increasing the amount of the

bond or other security required to be filed pursuant to article twelve-A

of this chapter shall be applicable to bonds or other security required

to be filed pursuant to this subdivision.

(d) Refusal to register. For the purposes of determining whether to

refuse an application for registration under article twelve-A of this

chapter as a distributor of motor fuel, diesel motor fuel or kero-jet

fuel only or under this section as a residual petroleum product

business, the references in subdivision two of section two hundred

eighty-three of this chapter to employees or shareholders under a duty

to file a return under or pursuant to the authority of article twelve-A

of this chapter or pay the taxes imposed by or pursuant to the authority

of such article on behalf of the applicant or another person shall be

deemed to also include an employee under a duty to file a return or pay

taxes under or pursuant to the authority of this article on behalf of

such applicant or other person. In addition to the grounds specified in

section two hundred eighty-three of this chapter, the commissioner may

refuse to register an applicant as a distributor of motor fuel, diesel

motor fuel or kero-jet fuel only or as a residual petroleum product

business where the commissioner ascertains that the applicant, an

officer, director or partner of the applicant, a shareholder directly or

indirectly owning more than ten percent of the number of shares of stock

of such applicant (where such applicant is a corporation) entitling the

holder thereof to vote for the election of directors or trustees, or an

employee or shareholder of such applicant under a duty to file a return

under or pursuant to the authority of this article or article twelve-A

of this chapter or to pay the taxes imposed by or pursuant to the

authority of this article or article twelve-A of this chapter on behalf

of the applicant, (1) has committed any of the acts or omissions which

are, or was convicted as, specified in subdivision (e) of this section

within the preceding five years, or (2) was an officer, director or

partner of another person, or who directly or indirectly owned more than

ten percent of the shares of stock of another person (where such other

person is a corporation) entitling the holder thereof to vote for the

election of directors or trustees, or who was an employee or shareholder

of another person under a duty to file a return under or pursuant to the

authority of this article or article twelve-A of this chapter or pay the

taxes imposed by or pursuant to the authority of this article or article

twelve-A of this chapter on behalf of such other person at the time such

other person committed any of the acts or omissions which are, or was

convicted as, specified in subdivision (e) of this section within the

preceding five years.

(e) Cancellation or suspension of registration. The grounds for a

cancellation or suspension of a registration under article twelve-A of

this chapter as a distributor of motor fuel, diesel motor fuel or

kero-jet fuel only or under this section as a residual petroleum product

business are those grounds specified in section two hundred eighty-three

of this chapter and, in addition to such grounds, the following grounds

relating to this article shall apply:

(1) A registration as a distributor of motor fuel, diesel motor fuel

or kero-jet fuel only or as a residual petroleum product business may be

cancelled or suspended if the commissioner determines that a registrant

or an officer, director or partner of the registrant, a shareholder

directly or indirectly owning more than ten percent of the number of

shares of stock of such registrant (where such registrant is a

corporation) entitling the holder thereof to vote for the election of

directors or trustees, or an employee or shareholder of such registrant

under a duty to file a return under or pursuant to the authority of this

article or article twelve-A of this chapter or to pay the taxes imposed

by or pursuant to the authority of this article or article twelve-A of

this chapter on behalf of the registrant (A) fails to file or maintain

in full force and effect a bond or other security when required pursuant

to subdivision (c) of this section or when the amount thereof is

increased,

(B) fails to comply with any of the provisions of this article or any

rule or regulation adopted pursuant to this article by the commissioner,

(C) knowingly aids and abets another person in violating any of the

provisions of this article or any rule or regulation adopted pursuant to

this article by the commissioner,

(D) transfers its registration as a petroleum business without the

prior written approval of the commissioner,

(E) with respect to a petroleum business which is a corporation, has

been dissolved pursuant to section two hundred three-a of this chapter

and subdivision (d) of section three hundred ten of this article,

(F) commits fraud or deceit in his or its operations as a petroleum

business or has committed fraud or deceit in procuring his or its

registration,

(G) has impersonated any person represented to be a petroleum business

under this article but not in fact registered as a distributor of motor

fuel, diesel motor fuel or kero-jet fuel only or a residual petroleum

product business, or

(H) has knowingly aided and abetted the distribution of motor fuel,

diesel motor fuel or residual petroleum product by corporation or

unincorporated business which such registrant or such other person knows

(i) has not been registered by the commissioner as a distributor of

motor fuel, diesel motor fuel or kero-jet fuel only or as a residual

petroleum product business and (ii) is a petroleum business pursuant to

the terms of subdivision (b) of section three hundred of this article.

(2) A registration as a distributor of motor fuel, diesel motor fuel

or kero-jet fuel only or as a residual petroleum product business may be

cancelled or suspended if the commissioner determines that a registrant

or an officer, director or partner of the registrant, a shareholder

directly or indirectly owning more than ten percent of the number of

shares of stock of such registrant (where such registrant is a

corporation) entitling the holder thereof to vote for the election of

directors or trustees, or an employee or shareholder of such registrant

under a duty to file a return under or pursuant to the authority of this

article or article twelve-A of this chapter on behalf of the registrant,

was an officer, director or partner of another person or was a

shareholder directly or indirectly owning more than ten percent of the

number of shares of stock of another person (where such other person is

a corporation) entitling the holder thereof to vote for the election of

directors or trustees, or was an employee or shareholder of another

person under a duty to file a return under or pursuant to the authority

of this article or article twelve-A of this chapter or to pay the taxes

imposed by or pursuant to the authority of this article or article

twelve-A of this chapter on behalf of such other person at the time such

other person committed any of the acts specified in paragraph one of

this subdivision within the preceding five years.

(f) Cancellation or suspension of registration prior to a hearing. The

grounds for cancelling or suspending a registration under article

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

fuel or kero-jet fuel only or under this section as a residual petroleum

product business prior to a hearing are those specified in subdivision

five of section two hundred eighty-three of this chapter and, in

addition to such grounds, the following grounds relating to this article

shall apply:

(1) the failure to file a return within ten days of the date

prescribed for filing a return under this article or nonpayment of any

tax due pursuant to this article if the registrant shall have failed to

file such return or pay such taxes within ten days after the date the

demand therefor is sent by registered or certified mail to the address

of the distributor or residual petroleum business given in its

application, or an address substituted therefor as provided in

subdivision five of section two hundred eighty-three of this chapter,

(2) the failure to continue to maintain in full force and effect at

all times the bond or other security required to be filed pursuant to

subdivision (c) of this section, provided, however, that if a surety

bond is cancelled prior to expiration, the commissioner may after

considering all the relevant circumstances make such other arrangements,

and may require the filing of such other bond or other security as it

deems appropriate,

(3) the transfer of a registration as a residual petroleum business

without the prior written approval of the commissioner, or

(4) with respect to a petroleum business which is a corporation, the

dissolution or annulment of such corporation pursuant to section three

hundred ten of this article.