NY State Senate Bill 2021-S7875

Senate Bill S7875

2021-2022 Legislative Session

Provides that commercial tugboats, barges and other commercial towboats are exempt from payment of the petroleum business tax

download bill text pdf

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 18, 2022	referred to investigations and government operations

2021-S7875 (ACTIVE) - Details

See Assembly Version of this Bill:: A8626
Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §§301-a & 301-b, Tax L

2021-S7875 (ACTIVE) - Summary

Provides that commercial tugboats, barges and other commercial towboats are exempt from payment of the petroleum business tax.

2021-S7875 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S7875

SPONSOR: SAVINO
 
TITLE OF BILL:

An act to amend the tax law, in relation to providing an exemption from
the payments of the petroleum business tax on the operation of commer-
cial tugboats, barges and other commercial towboats

 
PURPOSE OR GENERAL IDEA OF BILL:

To provide commercial tugboats; barges and other commercial towboats an
exemption from the petroleum business tax (PBT)

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one is the legislative findings and declarations.

Section two amends paragraph 2 of subdivision (b) of section 301-a of
the tax law, as added by section 154 of part A of chapter 389 of the
laws of 1997 relating to commercial tugboats, barge or other commercial
tugboat operators.

Section three amends subparagraph (B) of paragraph 1 of subdivision (c)
of section 301-a of the tax law, as added by section 154 of part A of
chapter 389 of the laws of 1997 relating to commercial tugboats, barge
or other commercial tugboat operators.

Section four amends section 301-b of the tax law by adding a new subdi-
vision (j).

Section five is the effective date.

 
JUSTIFICATION:

This measure would exempt the towing and barge industry from New York's
onerous Petroleum Business Tax (PBT). More than 30 towing companies do
business in New York, with a variety of operations that employ thousands
of people in the state. Towing companies are a vital part of New York's
supply chain. They conduct essential maritime activities, including ship
assist, construction, dredging, and transportation services. Ship assist
tugboats safely escort and maneuver large container, tanker and freight
ships in New York harbor. Tug and tow boats safely and efficiently
deliver gasoline and home heating oil throughout the state, removing
thousands of trucks from our congested highways. Towing vessels are also
poised to help support the installation of offshore wind turbines to
help New York reach its wind energy goals.

Tug and tow boats are Jones Act vessels, manned by American Crews,
making them valuable Maritime Security assets. Additionally, towing
vessels are the most efficient, environmentally-friendly mode of trans-
portation, and towing companies have made - and continue to make -
significant investments in more efficient engine technologies.

The towing industry has worked for years with the New York State Depart-
ment of Taxation & Finance and has demonstrated that the variables of
location and consumption make it impossible for towing companies to
measure their tax liability. Exemption from the petroleum business tax
will not incentivize vessels to burn more fuel. Instead, it will remove
a significant administrative burden off the shoulders of an important
part of New York's supply chain.

There is no other state on the Atlantic coast that imposes a marine fuel
consumption tax, a fact that places New York tugboat, barge and towing
companies at a severe competitive disadvantage. Currently, passenger
commuter ferries, recreational boaters, commercial fishing vessels,
manufacturers and farmers are exempt from paying the PBT.  Specifically,
tugboat, barge towing operators located in New York operate on federally
dredged and managed channels, protected and regulated by the Coast Guard
- all paid for by federal tax dollars and NOT New York tax dollars.
Therefore, towing vessels should be exempt from paying New York fuel
taxes that do not support the industry.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

$2,000,000 annually.

 
EFFECTIVE DATE:
This act shall take effect August 31, 2022.

2021-S7875 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7875
 
                             I N  S E N A T E
 
                             January 18, 2022
                                ___________
 
 Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment Operations
 
 AN ACT to amend the tax law, in relation to providing an exemption  from
   the payments of the petroleum business tax on the operation of commer-
   cial tugboats, barges and other commercial towboats

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative  findings  and  declarations.  The  legislature
 hereby finds that commercial tugboat, barge and other commercial towboat
 operators  are  subject to the petroleum business tax when their vessels
 are used in commercial tugboat, barge and other commercial towboat oper-
 ations. The legislature further  finds  that  such  commercial  tugboat,
 barge  and  other  commercial towboat operators endure an administrative
 and unexpected financial burden as a result of  such  law  that  is  not
 warranted  by  the  minimal  amounts to be collected from the commercial
 tugboat, barge and other commercial towboat operators under such law, as
 determined by the state of New York.
   The legislature, therefore, declares that it is in the  best  interest
 of  the  commercial tugboat, barge and other commercial towboat industry
 of the state of New York to exempt the  commercial  tugboat,  barge  and
 other commercial towboat industry from this tax.
   §  2.  Paragraph 2 of subdivision (b) of section 301-a of the tax law,
 as added by section 154 of part A of chapter 389 of the laws of 1997, is
 amended to read as follows:
   (2) Motor fuel brought into this state in  the  fuel  tank  connecting
 with  the  engine  of  a  vessel propelled by the use of such motor fuel
 shall be deemed to constitute a  taxable  use  of  motor  fuel  for  the
 purposes  of this subdivision to the extent that the fuel is consumed in
 the operation of the vessel in this state. Provided, however, that  this
 paragraph  shall  not  apply  to  (i)  a recreational motor boat or (ii)
 subsequent to  August  thirty-first,  nineteen  hundred  ninety-four,  a
 commercial  fishing  vessel  (as  defined  in subdivision (j) of section
 three hundred of this article) if the motor fuel imported  and  consumed
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD13954-03-1
 S. 7875                             2
 
 in  this state is used to operate such vessel while it is engaged in the
 harvesting of fish for sale  OR (III) SUBSEQUENT TO AUGUST THIRTY-FIRST,
 TWO THOUSAND TWENTY-TWO, A COMMERCIAL TUGBOAT, BARGE OR OTHER COMMERCIAL
 TOWBOAT  OPERATOR  IF THE MOTOR FUEL IMPORTED AND CONSUMED IN THIS STATE
 IS USED TO OPERATE VESSELS OF SUCH  OPERATORS  WHILE  SUCH  OPERATOR  IS
 ENGAGED  IN  COMMERCIAL TUGBOAT, BARGE OR OTHER COMMERCIAL TOWBOAT OPER-
 ATIONS IN THE STATE. Provided, further, that tax liability for gallonage
 that a vessel consumes shall be the tax liability with  respect  to  the
 positive  difference between the gallonage consumed in this state during
 the reporting period and the gallonage purchased  in  this  state  (upon
 which the tax imposed by this section has been paid) during such period.
 A  credit  or  refund shall be available for any excess of tax liability
 for gallonage purchased in this state during the period over tax liabil-
 ity on gallonage so consumed in this state  during  such  period,  which
 excess shall be presumed to have been used outside this state.
   §  3.  Subparagraph  (B)  of paragraph 1 of subdivision (c) of section
 301-a of the tax law, as amended by section 19 of part K of  chapter  61
 of the laws of 2011, is amended to read as follows:
   (B) Highway diesel motor fuel brought into this state in the fuel tank
 connecting  with  the  engine  of  a vessel propelled by the use of such
 diesel motor fuel shall be deemed to constitute a taxable use of  diesel
 motor  fuel  for the purpose of this paragraph to the extent of the fuel
 that is consumed in the operation of the vessel in this state. Provided,
 however, this paragraph shall not apply to (i) a recreational motor boat
 or (ii) a commercial fishing vessel (as defined in  subdivision  (j)  of
 section  three hundred of this article) if the highway diesel motor fuel
 imported into and consumed in this state is used to operate such commer-
 cial fishing vessel while it is engaged in the harvesting  of  fish  for
 sale  OR  (III)  SUBSEQUENT TO AUGUST THIRTY-FIRST, TWO THOUSAND TWENTY-
 TWO, A COMMERCIAL TUGBOAT, BARGE OR OTHER COMMERCIAL TOWBOAT OPERATOR IF
 THE HIGHWAY DIESEL MOTOR FUEL IMPORTED AND CONSUMED  IN  THIS  STATE  IS
 USED  TO OPERATE VESSELS OF SUCH OPERATOR WHILE SUCH OPERATOR IS ENGAGED
 IN COMMERCIAL TUGBOAT, BARGE OR OTHER COMMERCIAL TOWBOAT  OPERATIONS  IN
 THIS  STATE.  Provided, further, that tax liability for gallonage that a
 vessel consumes in this state shall be the tax liability with respect to
 the positive difference between the gallonage  consumed  in  this  state
 during  the  reporting  period and the gallonage purchased in this state
 (upon which the tax imposed by this section has been paid)  during  such
 period.  A  credit  or  refund  shall be available for any excess of tax
 liability for gallonage purchased in this state during the  period  over
 tax liability on gallonage so consumed in this state during such period,
 which excess shall be presumed to have been used outside this state.
   §  4. Section 301-b of the tax law is amended by adding a new subdivi-
 sion (j) to read as follows:
   (J) EXEMPTION FOR  COMMERCIAL  TUGBOAT,  BARGE,  OR  OTHER  COMMERCIAL
 TOWBOAT  OPERATORS.  A  USE  BY  A  COMMERCIAL  TUGBOAT, BARGE, OR OTHER
 COMMERCIAL TOWBOAT OPERATOR 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 COMMERCIAL TUGBOAT, BARGE,
 OR OTHER COMMERCIAL TOWBOAT OPERATOR IN COMMERCIAL  TUGBOAT,  BARGE,  OR
 OTHER COMMERCIAL TOWBOAT OPERATIONS IN THE STATE.
   § 5. This act shall take effect August 31, 2022.

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