S T A T E O F N E W Y O R K
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5751
2011-2012 Regular Sessions
I N A S S E M B L Y
February 28, 2011
___________
Introduced by M. of A. MAGEE -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to exempting dyed Diesel motor
fuel used in farming or manufacturing
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph (c) of subdivision 3 of section 282-a of the tax
law, as added by chapter 302 of the laws of 2006, is amended to read as
follows:
(c) Limited exemptions for dyed Diesel motor fuel. (i) The tax imposed
by this section shall not apply to: (A) the sale of dyed Diesel motor
fuel by the importer to a purchaser under the circumstances and subject
to the terms and conditions as follows: (1) the importer and purchaser
are each registered under this article as a full Diesel motor fuel
distributor; (2) such importer has imported the enhanced Diesel motor
fuel, which is the subject of the sale, into the state and has dyed such
fuel to comply with the provisions of 26 USC S 4082(a) and the regu-
lations thereunder, as may be amended from time to time; (3) the
purchaser is a holder of a currently valid direct payment permit issued
pursuant to section two hundred eighty-three-d of this article; and
(4)(I) such purchaser is primarily engaged in the retail heating oil
business and such dyed Diesel motor fuel will be sold by such purchaser
in a retail sale to a consumer for use [solely as] BY THAT CONSUMER
DIRECTLY AND EXCLUSIVELY FOR residential or commercial heating [oil], OR
(II) SUCH DYED DIESEL MOTOR FUEL WILL BE SOLD BY SUCH PURCHASER IN A
RETAIL SALE TO A CONSUMER FOR USE BY THAT CONSUMER DIRECTLY AND EXCLU-
SIVELY IN THE PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR SALE BY FARM-
ING, BUT ONLY IF ALL OF THAT FUEL IS DELIVERED ON THE FARMING SITE AND
IS CONSUMED OTHER THAN ON THE HIGHWAYS OF THIS STATE (EXCEPT FOR USE OF
THE HIGHWAY TO REACH ADJACENT FARMLANDS); PROVIDED, HOWEVER, THAT A
FARMER MAY PURCHASE NO MORE THAN FOUR THOUSAND FIVE HUNDRED GALLONS OF
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08917-01-1
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DIESEL MOTOR FUEL AND DYED DIESEL MOTOR FUEL COMBINED IN A THIRTY-DAY
PERIOD FOR SUCH USE OR CONSUMPTION EXEMPT FROM THE MEASURE OF THE TAX
IMPOSED BY THIS SECTION, EXCEPT IN ACCORDANCE WITH PRIOR CLEARANCE GIVEN
BY THE COMMISSIONER, OR (III) SUCH DYED DIESEL MOTOR FUEL WILL BE SOLD
BY SUCH PURCHASER IN A RETAIL SALE TO A CONSUMER FOR USE BY THAT CONSUM-
ER DIRECTLY AND EXCLUSIVELY IN THE PRODUCTION OF TANGIBLE PERSONAL PROP-
ERTY FOR SALE BY MANUFACTURING, PROCESSING, OR ASSEMBLY, BUT ONLY IF ALL
OF THAT FUEL IS DELIVERED ON THE MANUFACTURING SITE AND IS CONSUMED
OTHER THAN ON THE HIGHWAYS OF THIS STATE; (B) a first sale of the dyed
Diesel motor fuel, which [as] WAS the subject of an exempt sale
described in clause (A) of this subparagraph, by the purchaser described
therein to a purchaser likewise holding a currently valid direct pay
permit under the circumstances and subject to the terms and conditions
as follows: (1) the sale [of] TO such second purchaser by such first
purchaser is the first and only sale of such dyed Diesel motor fuel by
such first purchaser; (2) (I) such second purchaser is primarily engaged
in the retail heating oil business and such dyed Diesel motor fuel will
be sold by such second purchaser in a retail sale to a consumer for use
[solely as] BY THAT CONSUMER DIRECTLY AND EXCLUSIVELY FOR residential or
commercial heating [oil], OR (II) SUCH DYED DIESEL MOTOR FUEL WILL BE
SOLD BY SUCH SECOND PURCHASER IN A RETAIL SALE TO A CONSUMER FOR USE BY
THAT CONSUMER DIRECTLY AND EXCLUSIVELY IN THE PRODUCTION OF TANGIBLE
PERSONAL PROPERTY FOR SALE BY FARMING, BUT ONLY IF ALL OF THAT FUEL IS
DELIVERED ON THE FARMING SITE AND IS CONSUMED OTHER THAN ON THE HIGHWAYS
OF THIS STATE (EXCEPT FOR USE OF THE HIGHWAY TO REACH ADJACENT FARM-
LANDS); PROVIDED, HOWEVER, THAT A FARMER MAY PURCHASE NO MORE THAN FOUR
THOUSAND FIVE HUNDRED GALLONS OF DIESEL MOTOR FUEL AND DYED DIESEL MOTOR
FUEL COMBINED IN A THIRTY-DAY PERIOD FOR SUCH USE OR CONSUMPTION EXEMPT
FROM THE MEASURE OF THE TAX IMPOSED BY THIS SECTION, EXCEPT IN ACCORD-
ANCE WITH PRIOR CLEARANCE GIVEN BY THE COMMISSIONER, OR (III) SUCH DYED
DIESEL MOTOR FUEL WILL BE SOLD BY SUCH SECOND PURCHASER IN A RETAIL SALE
TO A CONSUMER FOR USE BY THAT CONSUMER DIRECTLY AND EXCLUSIVELY IN THE
PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR SALE BY MANUFACTURING,
PROCESSING, OR ASSEMBLY, BUT ONLY IF ALL OF THAT FUEL IS DELIVERED ON
THE MANUFACTURING SITE AND IS CONSUMED OTHER THAN ON THE HIGHWAYS OF
THIS STATE; (3) on the sale to the second purchaser, such first purchas-
er described in such clause (A) attaches to the invoice a copy of the
invoice given by the importer on the exempt sale described in such
clause (A), so as to identify the origin of the dyed Diesel fuel [which]
THAT is the subject of the sale to such second purchaser; and (4) such
second purchaser certifies that such dyed Diesel motor fuel is to be
sold by it only to a consumer for use [solely as] BY THAT CONSUMER
DIRECTLY AND EXCLUSIVELY (I) FOR residential or commercial heating
[oil], (II) IN THE PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR SALE BY
FARMING, BUT ONLY IF ALL OF THAT FUEL IS DELIVERED ON THE FARMING SITE
AND IS CONSUMED OTHER THAN ON THE HIGHWAYS OF THIS STATE (EXCEPT FOR USE
OF THE HIGHWAY TO REACH ADJACENT FARMLANDS); PROVIDED, HOWEVER, THAT A
FARMER MAY PURCHASE NO MORE THAN FOUR THOUSAND FIVE HUNDRED GALLONS OF
DIESEL MOTOR FUEL AND DYED DIESEL MOTOR FUEL COMBINED IN A THIRTY-DAY
PERIOD FOR SUCH USE OR CONSUMPTION EXEMPT FROM THE MEASURE OF THE TAX
IMPOSED BY THIS SECTION, EXCEPT IN ACCORDANCE WITH PRIOR CLEARANCE GIVEN
BY THE COMMISSIONER, OR (III) IN THE PRODUCTION OF TANGIBLE PERSONAL
PROPERTY FOR SALE BY MANUFACTURING, PROCESSING, OR ASSEMBLY, BUT ONLY IF
ALL OF THAT FUEL IS DELIVERED ON THE MANUFACTURING SITE AND IS CONSUMED
OTHER THAN ON THE HIGHWAYS OF THIS STATE. (ii) Prior to, or at the time
of, such sale of such dyed Diesel motor fuel described in clause (A) or
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(B) of subparagraph (i) of this paragraph, the purchaser shall give a
certificate to the seller setting forth the intended use of the dyed
Diesel motor fuel [which] THAT is sought to be qualified for exemption
under this paragraph, that the purchaser has been issued a direct
payment permit which is currently valid, that such permit has not been
suspended or revoked and that the purchaser otherwise meets the quali-
fications of this paragraph. (iii) The limited exemptions allowed under
this paragraph, EXCEPT THE EXEMPTIONS FOR SALES OF DYED DIESEL MOTOR
FUEL TO CONSUMERS FOR USE BY THOSE CONSUMERS IN THE PRODUCTION OF TANGI-
BLE PERSONAL PROPERTY FOR SALE BY FARMING, shall in no event apply to
any dyed Diesel motor fuel [which] THAT is delivered into a repository
equipped with hose or other apparatus capable of being used to dispense
fuel into the fuel tank of a motor vehicle, or where the purchaser's
direct payment permit has been suspended or revoked and the commissioner
has made generally available the identity of those persons whose direct
payment permits have been suspended or revoked.
S 2. The section heading and subdivision 1 of section 283-d of the tax
law, as added by chapter 302 of the laws of 2006, is amended to read as
follows:
Direct payment permit with respect to dyed Diesel motor fuel [used as
residential or commercial heating oil]. 1. The commissioner, upon the
application of a person registered under this article as a distributor
of Diesel motor fuel, may issue a direct payment permit to such person
for the payment of tax liability under this article with respect to dyed
Diesel motor fuel [which] THAT is certified to be used [solely] DIRECTLY
AND EXCLUSIVELY for ONE OF THE FOLLOWING PURPOSES: residential or
commercial heating [oil], PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR
SALE BY FARMING, OR PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR SALE BY
MANUFACTURING, PROCESSING, OR ASSEMBLY if: (a) such person, at the time
of application, meets all the requirements described in section two
hundred eighty-two-a of this article and any other requirements under
this article relating to Diesel motor fuel distributors, (b) there has
been timely filing and payment of tax liability with respect to taxes
under this chapter (excluding those taxes timely protested), by such
person, any officer, director or partner of such person, shareholder
directly or indirectly owning more than ten percent of the number of
shares of stock of such person entitling the holder thereof to vote for
the election of directors or trustees, or any shareholder or employee of
such person under a duty to file a return under or pursuant to the
authority of this article or pay the taxes imposed by or pursuant to the
authority of this article on behalf of such person (the provisions of
subdivision ten of section two hundred eighty-three of this article
shall apply to the provisions of this paragraph), AND (c) [such person
is engaged primarily in the retail sale of residential or commercial
heating oil and does not make wholesale sales of Diesel motor fuel other
than in the circumstances described in clause (B) of subparagraph (i) of
paragraph (c) of subdivision three of section two hundred eighty-two-a
of this article, and (d)] such person files a bond or other security
covering potential tax liability under this chapter with respect to such
dyed Diesel motor fuel.
S 3. Clause (i) of subparagraph (C) of paragraph 1 of subdivision (c)
of section 300 of the tax law, as added by chapter 190 of the laws of
1990, is amended to read as follows:
(i) ["nonautomotive type diesel] "NONAUTOMOTIVE-TYPE DIESEL motor
fuel" as used in relation to the rates of the tax imposed by section
three hundred one-a of this article means any diesel motor fuel, as
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described in subparagraph (A) of this paragraph, which would be excluded
from the diesel motor fuel excise tax imposed by section two hundred
eighty-two-a of this chapter solely by reason of the enumerated exclu-
sions based on ultimate use of the product set forth in paragraph (b) of
subdivision three of such section, AND ANY DYED DIESEL MOTOR FUEL, AS
DESCRIBED IN SUBDIVISION EIGHTEEN OF SECTION TWO HUNDRED EIGHTY-TWO OF
THIS CHAPTER, WHICH WOULD BE EXCLUDED FROM THE DIESEL MOTOR FUEL EXCISE
TAX IMPOSED BY SECTION TWO HUNDRED EIGHTY-TWO-A OF THIS CHAPTER SOLELY
BY REASON OF THE ENUMERATED EXCLUSIONS BASED ON ULTIMATE USE OF THE
PRODUCT SET FORTH IN PARAGRAPH (C) OF SUBDIVISION THREE OF THAT SECTION,
and (ii) "automotive-type diesel motor fuel" as used in relation to the
rates of tax imposed by such section three hundred one-a means diesel
motor fuel [which] THAT is not nonautomotive-type diesel motor fuel.
S 4. Subdivision (m) of section 300 of the tax law, as added by chap-
ter 309 of the laws of 1996, is amended to read as follows:
(m) "Manufacturing gallonage" means residual petroleum product, DYED
DIESEL MOTOR FUEL, or diesel motor fuel (which is not enhanced diesel
motor fuel) THAT IS used and consumed directly and exclusively in the
production of tangible personal property for sale by manufacturing,
processing or assembly, but only if all of such fuel or product is
delivered on the manufacturing site and is consumed other than on the
highways of this state. "Manufacturing gallonage" shall in no event
include diesel motor fuel OR DYED DIESEL MOTOR FUEL delivered at a fill-
ing station or into a repository [which] THAT is equipped with a hose or
other apparatus by which such fuel can be dispensed into the fuel tank
of a motor vehicle. The commissioner shall require such documentary
proof to substantiate the classification of product as "manufacturing
gallonage" as the commissioner deems appropriate.
S 5. Subdivision (j) of section 301-c of the tax law, as added by
chapter 309 of the laws of 1996, is amended to read as follows:
(j) Reimbursement for manufacturing gallonage. Commencing January
first, nineteen hundred ninety-eight, a subsequent purchaser shall be
eligible for reimbursement of any taxes imposed under this article with
respect to gallonage of residual petroleum product, DYED DIESEL MOTOR
FUEL, and diesel motor fuel (which is not enhanced diesel motor fuel),
subsequently sold by such purchaser to a consumer as "manufacturing
gallonage." This reimbursement may be claimed only where (1) any tax
imposed pursuant to this article has been paid with respect to such
gallonage and the entire amount of such tax has been absorbed by such
purchaser, and (2) such purchaser possesses documentary proof satisfac-
tory to the commissioner evidencing the absorption by it of the entire
amount of such tax. Provided, however, that the commissioner shall
require such documentary proof to qualify for any reimbursement of tax
provided by this subdivision as the commissioner deems appropriate
including a certificate by the consumer that such product is to be used
and consumed exclusively as "manufacturing gallonage".
S 6. This act shall take effect on the first day of the sales tax
quarterly period, as described in subdivision (b) of section 1136 of the
tax law, next commencing at least ninety days after this act becomes a
law; provided, however, that registered distributors of Diesel motor
fuel may apply for direct payment permits thirty days after this act
becomes a law.