Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, §§ 1101(b)(4)(ii), 1111(e)(6)
(a)
Automotive fuel.
For the purpose of the prepaid sales tax on motor fuel,
automotive fuel means motor fuel as defined in section 282.2
of the Tax Law or diesel motor fuel as defined in section 282.14 of the Tax
Law.
(1)
(i)
Motor fuel means
gasoline, benzol or other product, except kerosene and crude oil, which is
suitable for use in the operation of any motor vehicle engine, but if kerosene
or crude oil is compounded or mixed with any other product or products, and the
resulting compound or mixture is suitable for use in the operation of any such
motor vehicle engine, such resulting compound or mixture in its entirety is
motor fuel. Motor fuelincludes, but is not limited to,
gasoline, benzol, benzene, naphtha, ethanol, methanol, liquefied petroleum gas,
compressed natural gas, propane gas, or any combination, or any other product,
or combination of products which is suitable for use in the operation of a
motor vehicle engine.
(ii) However,
any product that is not commonly or commercially known or sold as gasoline or a
blend thereof, will not generally be considered to be suitable for use in the
operation of a motor vehicle engine until one of the following, whichever is
the earliest, takes place.
(a) The product is
compounded or otherwise mixed with any other product or products, the result of
which is suitable for use in the operation of a motor vehicle engine.
Example 1:
A sells gasoline, as well as other petroleum products that
are used for industrial purposes. A also uses light naphtha and other
petrochemicals for blending. Those additives, when compounded or otherwise
mixed with gasoline, are motor fuel suitable for use in the operation of a
motor vehicle engine. A has produced additional motor fuel in this State.
Consequently, A must be registered under article 12-A of the Tax Law and pay
the taxes imposed on such motor fuel.
(b) The product is destined for use in the
operation of a motor vehicle engine as is reasonably concluded from facts and
circumstances concerning such product.
Example 2:
B sells gasoline, gasohol and other motor fuels
exclusively. B transports methanol to its motor fuel terminal in New York
State. It can reasonably be concluded that such product is motor fuel suitable
for use in the operation of a motor vehicle engine. B is deemed to have
produced motor fuel in this State because B established the methanol as motor
fuel. Consequently, B must be registered under article 12-A of the Tax Law and
pay the taxes imposed on such motor fuel.
(c) The product is specifically designated as
a fuel suitable for use in the operation of a motor vehicle engine.
Example 3:
C sells a variety of denatured alcohols, including
anhydrous ethyl alcohol. These products are primarily used by C's customers as
solvents and reagents. C also sells a portion of the anhydrous ethyl alcohol as
ethanol fuel. Such product is motor fuel suitable for use in the operation of a
motor vehicle engine when the specific designation is made. C is deemed to have
produced motor fuel in this State because C established the ethyl alcohol as
motor fuel on the sale thereof as motor fuel. Consequently, C must be
registered under article 12-A of the Tax Law and pay the taxes imposed on such
motor fuel.
(d) The product
is pumped into the fuel tank of a motor vehicle for use in the operation
thereof on the public highways of New York State or is pumped into the fuel
tank of a pleasure or recreational motor boat for use in the operation thereof
on the waterways of New York State, including any waterways bordering on the
State.
Example 4:
D sells compressed natural gas for heating purposes. In
addition, D sells such product to persons operating motor vehicles that have
been specially adapted to operate on compressed natural gas. Such compressed
natural gas is motor fuel suitable for use in the operation of a motor vehicle
engine when it is pumped into the fuel tank of a motor vehicle for use in the
operation of the vehicle. D is deemed to have produced motor fuel in this State
because D established the compressed natural gas as motor fuel. Consequently, D
must be registered under article 12-A of the Tax Law and pay the taxes imposed
on such motor fuel.
(iii) Motor fuel that is suitable for use in
the operation of an engine of the diesel type is diesel motor
fuel as defined in paragraph (2) of this subdivision, and as such is
subject to the prepaid tax as diesel motor fuel pursuant to section
1102(a)(2) of the Tax
Law.
(2)
Diesel
motor fuel means kerosene, crude oil, fuel oil or other middle
distillate and also motor fuel suitable for use in the operation of an engine
of the diesel type, excluding, however, any product specifically designated
"No. 4 Diesel fuel" and not suitable as a fuel used in the operation of a motor
vehicle engine. (See section
430.1[b]
of this Title for specifications as to what constitutes No. 4 Diesel fuel not
suitable as a fuel in such operation.)
(3) For the purposes of this Part,
motor vehicle, as used in defining motor fuel, means any
vehicle propelled by any power other than muscular, except boats (not including
pleasure craft), road-building machinery, power shovels, tractor cranes,
tractors used exclusively for agricultural purposes, and such vehicles as are
run only on rails or tracks.
(4)
Kero-jet fuel means a quality, highly refined kerosene product
or derivative thereof, which meets kerosene-type jet fuel specifications and
which is primarily used for commercial turbojet and turboprop aircraft
engines.
(b)
Use.
For the purpose of the imposition of the section 1102
prepaid sales tax, the term use shall mean the exercise of any
right or power over motor fuel by any person, whether or not a purchaser,
including but not limited to the receiving, storage or any keeping or retention
for any length of time, withdrawal from storage or any consumption of such
motor fuel.
(c)
Imports or causes to be imported.
(1) A
person imports motor fuel or causes it to be imported into this State:
(i) if such person has ownership of motor
fuel at the time the fuel enters New York State's jurisdiction or at any time
thereafter up to and including the off-loading of such fuel;
(ii) if such person directs or controls the
importation of motor fuel into New York State; or
(iii) if such person purchases motor fuel
located outside New York State for delivery into New York State from a seller
who is not a registered distributor in New York State under article 12-A of the
Tax Law.
Thus, more than one party in any particular importation
transaction may have imported motor fuel or caused it to be imported. The act
of importation encompasses the acts of all the parties to any New York sales
commencing with the bringing of motor fuel into New York State and continuing
to the off-loading of such fuel at or into any terminal, facility or land-sited
repository for use, distribution, storage or sale in this State. Accordingly,
all persons who have ownership of motor fuel from the time it enters New York
State's jurisdiction to the time it is off-loaded into a terminal, facility or
land-sited repository for use, distribution, storage or sale in the State have
caused such motor fuel to be imported into this State. Ownership of motor fuel
is evidenced by such factors as title, possession, control and/or risk of loss.
The absence of title will not necessarily preclude ownership of motor fuel, and
possession, control and risk of loss are given great significance in
determining ownership. Unless the circumstances of the transaction clearly
indicate otherwise, ownership vests in the buyer when the seller completes his
performance under the sales contract with respect to the physical delivery of
the motor fuel.
(2) Regardless of the indications of
ownership discussed above, if the circumstances of an importation transaction
indicate that a person or persons, other than the person indicated as the
owner, is directing or controlling the importation of motor fuel, such person
or persons directing or controlling the importation is importing motor fuel or
causing it to be imported into New York State. Factors indicating that a person
directs and controls an importation transaction include:
(i) placement of the order with the
out-of-state supplier for the motor fuel which is the subject of the
importation transaction;
(ii)
arranging for the transportation of the motor fuel;
(iii) financing or paying for the purchase
and/or the transportation of the motor fuel;
(iv) financing the direct parties to the
transaction and/or conducting their business activities; and
(v) that transactions between the parties are
not conducted at arm's length.
Example 1:
Ownership. A contracts with B, a New York registered
distributor under article 12-A, for the purchase of motor fuel located outside
the State. A and B agree that B will deliver the motor fuel to A's terminal in
New York. B ships the motor fuel by common carrier C to A's terminal. B has
imported motor fuel or caused motor fuel to be imported into this State.
Although C transports the motor fuel into New York, it does so only as a common
carrier.
Example 2:
Ownership. D contracts with E, a New York registered
distributor under article 12-A, for the purchase of motor fuel located outside
the State. D and E agree that D will take delivery of the motor fuel at E's
terminal outside the State. D arranges for the transportation from E's premises
to its New York terminal. D has imported motor fuel or caused motor fuel to be
imported into New York State.
Example 3:
Directing and controlling the importation. F incorporates a
wholly owned subsidiary, G. G has only nominal assets and no employees; its
activities are conducted by the officers and employees of F. G purchases motor
fuel from an out-of-state supplier and takes delivery of the fuel at the
supplier's out-of-state terminal. G delivers the fuel to F's terminal in New
York. F, as well as G, has imported motor fuel or caused it to be imported New
York, whether or not F has directly issued payment for the fuel and/or
transportation.
Example 4:
Unregistered out-of-state supplier. H contracts with J, who
is not a New York registered distributor under article 12-A, for the purchase
of motor fuel located outside the State. H and J agree that J will deliver the
motor fuel to H's terminal in New York. J ships the motor fuel by common
carrier to H's terminal. H, as well as J, has imported motor fuel or caused
motor fuel to be imported because H has purchased motor fuel located outside
the State for delivery into the State from a seller who is not a New York
registered distributor.
(3) For the purposes of the prepaid sales tax
imposed by section
1102 of the Tax Law and the excise taxes on
motor fuel imposed by article 12-A of such law, New York State's jurisdiction
includes New York's territorial waters. When sales or transfers of motor fuel
occur when such motor fuel is on New York territorial waters prior to its being
off-loaded into a New York land-sited facility, all the parties to all such
sales or transfers have caused the motor fuel to be imported into New York for
use, distribution, storage or sale in this State. Additionally, if the party
owning the motor fuel at the time off-loading into a New York land-sited
facility commences is not registered as a distributor under article 12-A of the
Tax Law, the party owning the motor fuel immediately after its off-loading
shall also have caused the motor fuel to be imported into New York. The owner
of motor fuel at the time that off-loading is commenced at or into any
terminal, facility or any other land-sited repository is responsible for
payment of the taxes with respect to such motor fuel, and, in determining the
amount of the tax, the motor fuel is to be measured by the amount of motor fuel
which is off-loaded into the terminal, facility or other land-sited repository.
Persons owning motor fuel prior to the person owning it at the time off-loading
is commenced are not liable for the tax. If, however, the owner of the motor
fuel at the time that off-loading is commenced is not registered as a
distributor under article 12-A of the Tax Law, then the owner of the motor fuel
immediately after it is off-loaded is jointly and severally liable for payment
of the tax (see section
561.3 of
this Part). In no event shall the tax be collected more than once with respect
to the particular importation of motor fuel.
(4) Motor fuel brought into the State in the
ordinary fuel tank connected with the engine of a motor vehicle, airplane,
motorboat or other conveyance propelled by the use of motor fuel, and to be
used only in the operation thereof, shall not be deemed imported within the
meaning of this definition, if not removed from such tank except as used in the
propulsion of such engine.
(d)
Distributor.
For the purposes of this Part, in general, the term
distributor as the same meaning as it has for purposes of the
motor fuel taxes imposed by and pursuant to the authority of article 12-A of
the Tax Law. Where the tangible personal property being sold is motor fuel, a
distributor means:
(1)
(i) Any person importing or causing to be
imported motor fuel from without the State for use, distribution, storage or
sale within the State, or who produces, refines, manufactures or compounds any
motor fuel within the State.
(ii)
Any person who or which imports or causes to be imported from without the State
any motor fuel for use, distribution, storage or sale, even though such person
is a retailer selling to customers for their consumption only.
(iii) Any person who or which imports or
causes to be imported motor fuel from without the State for use, distribution,
storage or sale within the State, even though such person is a consumer as
distinguished from a dealer in motor fuel.
(2) Any person registered as a distributor of
motor fuel under article 12-A of the Tax Law for the purposes of the taxes
imposed upon motor fuel by or pursuant to the authority of article 12-A is also
a distributor for purposes of the prepaid tax imposed by section 1102 of
article 28 of the Tax Law.
(3) A
person shall not be a distributor for the purposes of the prepaid tax imposed
by section
1102 of the Tax Law because such person is
a distributor solely of diesel motor fuel.
(e)
Filling station.
The term filling station means any place,
location or station where automotive fuel is stored primarily for sale by
delivery directly into the ordinary fuel tank connected with the engine of a
motor vehicle to be consumed in the operation of such motor
vehicle.
(f)
Owner of
a filling station.
The term owner of a filling station means
the owner, lessee or operator of a filling station.
