2023 New York Laws › TAX - Tax › Article 13-A - Tax on Petroleum Businesses › 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, 2026
* (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, 2026
* (8) CNG or hydrogen.
* NB Repealed September 1, 2026
(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.