NY State Senate Bill 2023-S2261

Senate Bill S2261

2023-2024 Legislative Session

Provides motor fuel tax exemption for sales of diesel motor fuel used in vessels used directly in a business providing sport fishing opportunities

download bill text pdf

Current Bill Status - In Senate Committee Budget And Revenue 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 03, 2024	referred to budget and revenue
Jan 19, 2023	referred to budget and revenue

2023-S2261 (ACTIVE) - Details

See Assembly Version of this Bill:: A3853
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §§300, 301-a, 301-c, 1115 & 1210, Tax L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S7145, A9999
2013-2014: S1766, A1218
2015-2016: S330, A151
2017-2018: S4820, A6328
2019-2020: S3719, A5512
2021-2022: S5166, A5812

2023-S2261 (ACTIVE) - Summary

Provides motor fuel tax exemption for sales of diesel motor fuel used in vessels used directly in a business providing sport fishing opportunities for hire to the general public from the tax on petroleum businesses and from sales and compensating use taxes.

2023-S2261 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S2261

SPONSOR: PALUMBO
 
TITLE OF BILL:

An act to amend the tax law, in relation to exempting fuel used in
vessels used directly and predominantly in a business providing sport
fishing opportunities for hire to the general public from the tax on
petroleum businesses and from sales and compensating use taxes

 
PURPOSE:

Provides motor fuel tax exemption for sales of diesel motor fuel used in
vessels used directly in a business providing sport fishing opportu-
nities.

 
SUMMARY OF PROVISIONS:

Amends the tax law to provide a full exemption from both the petroleum
business tax and sales and compensating use tax for charter boats used
directly and predominantly in a business providing sport fishing oppor-
tunities for hire to the general public.

 
JUSTIFICATION:

The original intent of this policy, as it relates to charter boats and
commercial fishing vessels, was to prevent tax evasion in the diesel
fuel industry. However, it was not intended to be burdensome to many of
the state's industries such charter boats and their fuel distributors.

The implementation of this law has caused a great deal of hardship for
the marine and party charter boat industry. The negative financial
consequences of this cash flow are a large burden for the charter boat
captains of this state.

The negative impacts of this law have also been carried over to the fuel
distributors of charter boats. Because of the payment requirement, many
captains are now purchasing their fuel at ports outside of New York.
This will result in the loss of thousands of dollars in revenue for the
state's fuel distributors. This legislation would no longer require
charter boats to pay any excise or state sales taxes for the purchase of
diesel motor fuel.

This legislation would provide a full exemption from both the petroleum
business tax and sales and compensating use tax for charter boats used
directly and predominantly in a business providing sport fishing oppor-
tunities for hire to the general public.

 
LEGISLATIVE HISTORY:

2022 S.5166/A.5812; 2020 S.3719/A.5512; 2017-18 S.4820/A.6328; 2015-16
S.330/A.151; 2013-14 S.1766A/A.1218A; 2012 S.7145

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided, that the amendments to the opening paragraph of
section 301-c of the tax law, made by section four of this act shall not
affect the expiration and repeal of such paragraph pursuant to section
19 of part W-1 of chapter 109 of the laws of 2006, as amended, and shall
expire and be deemed repealed therewith, when upon such date the
provisions of section five of this act shall take effect.

2023-S2261 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2261
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 19, 2023
                                ___________
 
 Introduced  by  Sen. PALUMBO -- read twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 AN ACT to amend the tax law, in  relation  to  exempting  fuel  used  in
   vessels  used directly and predominantly in a business providing sport
   fishing opportunities for hire to the general public from the  tax  on
   petroleum businesses and from sales and compensating use taxes
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  Section 300 of the tax law is  amended  by  adding  a  new
 subdivision (j-1) to read as follows:
   (J-1)  "COMMERCIAL  SPORT  FISHING  VESSEL"  MEANS A VESSEL OWNED BY A
 PERSON, WHO HAS BEEN ISSUED AND HOLDS  A  MARINE  AND  COASTAL  DISTRICT
 PARTY  AND CHARTER BOAT LICENSE PURSUANT TO SECTION 13-0336 OF THE ENVI-
 RONMENTAL CONSERVATION LAW.
   § 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
 in this state is used to operate such vessel while it is engaged in  the
 harvesting  of fish for sale OR (III) A COMMERCIAL SPORT FISHING VESSEL,
 IF SUCH VESSEL PROVIDES ITS OWNER WITH AT LEAST FIFTY PERCENT OF HIS  OR
 HER  TOTAL  ANNUAL  INCOME.    Provided, further, that tax liability for
 gallonage that a vessel consumes shall be the tax liability with respect
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03826-01-3

 S. 2261                             2
 
 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.
   §  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) A COMMERCIAL SPORT FISHING VESSEL, IF SUCH VESSEL PROVIDES
 ITS OWNER WITH AT LEAST FIFTY PERCENT OF HIS OR HER TOTAL ANNUAL INCOME.
 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 liabil-
 ity on gallonage so consumed in this state  during  such  period,  which
 excess shall be presumed to have been used outside this state.
   § 4. The opening paragraph of section 301-c of the tax law, as amended
 by  section 2 of part T of chapter 59 of the laws of 2022, is amended to
 read as follows:
   A subsequent purchaser shall be eligible for reimbursement of tax with
 respect to the following gallonage, subsequently sold by such  purchaser
 in  accordance with subdivision (a), (b), (e), (h), (j), (k), (n) or (o)
 of this section or used by such purchaser in accordance with subdivision
 (c), (d), (f), (g), (G-1), (i), (l), (m) or (q) of this  section,  which
 gallonage  has  been  included in the measure of the tax imposed by this
 article on a petroleum business:
   § 5. The opening paragraph of section 301-c of the tax law, as amended
 by section 3 of part T of chapter 59 of the laws of 2022, is amended  to
 read as follows:
   A subsequent purchaser shall be eligible for reimbursement of tax with
 respect  to the following gallonage, subsequently sold by such purchaser
 in accordance with subdivision (a), (b), (e), (h), (j) or  (k)  of  this
 section  or  used  by such purchaser in accordance with subdivision (c),
 (d), (f), (g), (G-1), (i), (l), (m) or (q) of this section, which gallo-
 nage has been included in the measure of the tax imposed by this article
 on a petroleum business:
   § 6. Section 301-c of the tax law is amended by adding a new  subdivi-
 sion (g-1) to read as follows:
   (G-1)  DIESEL  MOTOR  FUEL  AND  MOTOR  FUEL  USED IN THE OPERATION OF
 COMMERCIAL SPORT FISHING  VESSELS.  DIESEL  MOTOR  FUEL  OR  MOTOR  FUEL
 PURCHASED  IN  THIS  STATE BY THE OPERATOR OF A COMMERCIAL SPORT FISHING
 S. 2261                             3
 
 VESSEL AT RETAIL WHEREIN SUCH DIESEL MOTOR FUEL OR SUCH  MOTOR  FUEL  IS
 DELIVERED  BY A PUMP EQUIPPED WITH A HOSE DIRECTLY INTO THE FUEL TANK OF
 A COMMERCIAL SPORT FISHING VESSEL TO BE USED AS FUEL IN THE OPERATION OF
 SUCH VESSEL FOR THE PURPOSE OF PROVIDING SPORT FISHING OPPORTUNITIES FOR
 HIRE  TO THE GENERAL PUBLIC; BUT ONLY WHERE (1) THE TAX IMPOSED PURSUANT
 TO THIS ARTICLE HAS BEEN PAID WITH RESPECT TO SUCH DIESEL MOTOR FUEL  OR
 SUCH  MOTOR  FUEL AND THE ENTIRE AMOUNT OF SUCH TAX HAS BEEN ABSORBED BY
 SUCH PURCHASER, (2) SUCH PURCHASER POSSESSES DOCUMENTARY PROOF SATISFAC-
 TORY TO THE COMMISSIONER EVIDENCING THE ABSORPTION BY IT OF  THE  ENTIRE
 AMOUNT  OF  THE TAX IMPOSED PURSUANT TO THIS ARTICLE, AND (3) THE VESSEL
 PROVIDES ITS OWNER WITH AT LEAST FIFTY PERCENT OF HIS OR HER TOTAL ANNU-
 AL INCOME. PROVIDED, HOWEVER, THAT THE COMMISSIONER SHALL  REQUIRE  SUCH
 DOCUMENTARY  PROOF  TO  QUALIFY FOR ANY REIMBURSEMENT OF TAX PROVIDED BY
 THIS SECTION AS THE COMMISSIONER DEEMS APPROPRIATE.
   § 7. Subdivision (a) of section 1115 of the  tax  law  is  amended  by
 adding a new paragraph 24-a to read as follows:
   (24-A) FUEL USED IN VESSELS USED DIRECTLY AND PREDOMINANTLY IN A BUSI-
 NESS  PROVIDING  SPORT  FISHING  OPPORTUNITIES  FOR  HIRE TO THE GENERAL
 PUBLIC; PROVIDED THAT SUCH VESSEL PROVIDES ITS OWNER WITH AT LEAST FIFTY
 PERCENT OF HIS OR HER TOTAL ANNUAL INCOME.
   § 8. Subparagraph (i) of paragraph 1 of  subdivision  (a)  of  section
 1210  of the tax law, as amended by section 5 of part J of chapter 59 of
 the laws of 2021, is amended to read as follows:
   (i) Any local law, ordinance or resolution enacted by any city of less
 than one million or by any county or school district, imposing the taxes
 authorized by this subdivision, shall, notwithstanding any provision  of
 law  to the contrary, exclude from the operation of such local taxes all
 sales of tangible personal property for use or consumption directly  and
 predominantly  in  the  production  of  tangible personal property, gas,
 electricity, refrigeration or steam, for sale, by  manufacturing,  proc-
 essing,  generating,  assembly,  refining, mining or extracting; and all
 sales of tangible personal property for use or consumption predominantly
 either in the production of tangible personal  property,  for  sale,  by
 farming or in a commercial horse boarding operation, or in both; and all
 sales  of  fuel sold for use in commercial aircraft and general aviation
 aircraft; AND  THE  FUEL  USED  IN  COMMERCIAL  SPORT   FISHING  VESSELS
 EXEMPTION  PROVIDED FOR IN PARAGRAPH TWENTY-FOUR-A OF SUBDIVISION (A) OF
 SECTION ELEVEN HUNDRED FIFTEEN OF THIS CHAPTER; and, unless  such  city,
 county or school district elects otherwise, shall omit the provision for
 credit  or refund contained in clause six of subdivision (a) or subdivi-
 sion (d) of section eleven hundred nineteen of this chapter.
   § 9. Section 1210 of the tax law is amended by adding a  new  subdivi-
 sion (n) to read as follows:
   (N)  NOTWITHSTANDING  ANY OTHER PROVISION OF STATE OR LOCAL LAW, ORDI-
 NANCE OR RESOLUTION TO THE CONTRARY:
   (1) ANY CITY HAVING A POPULATION OF ONE MILLION OR MORE IN  WHICH  THE
 TAXES  IMPOSED  BY  SECTION  ELEVEN HUNDRED SEVEN OF THIS CHAPTER ARE IN
 EFFECT, ACTING THROUGH ITS LOCAL LEGISLATIVE BODY, IS HEREBY  AUTHORIZED
 AND EMPOWERED TO ELECT TO PROVIDE THE SAME EXEMPTIONS FROM SUCH TAXES AS
 THE  FUEL  USED IN COMMERCIAL SPORT FISHING VESSELS EXEMPTION FROM STATE
 SALES AND COMPENSATING USE TAXES DESCRIBED IN PARAGRAPH TWENTY-FOUR-A OF
 SUBDIVISION (A) OF SECTION ELEVEN HUNDRED FIFTEEN  OF  THIS  CHAPTER  BY
 ENACTING  A  RESOLUTION  IN  THE FORM SET FORTH IN PARAGRAPH TWO OF THIS
 SUBDIVISION; WHEREUPON, UPON COMPLIANCE WITH THE PROVISIONS OF  SUBDIVI-
 SIONS  (D)  AND  (E)  OF THIS SECTION, SUCH ENACTMENT OF SUCH RESOLUTION
 SHALL BE DEEMED TO BE AN AMENDMENT TO SUCH SECTION ELEVEN HUNDRED  SEVEN
 S. 2261                             4
 
 AND  SUCH  SECTION  ELEVEN  HUNDRED SEVEN SHALL BE DEEMED TO INCORPORATE
 SUCH EXEMPTIONS AS IF THEY HAD BEEN DULY ENACTED BY THE  STATE  LEGISLA-
 TURE AND APPROVED BY THE GOVERNOR.
   (2)  FORM  OF RESOLUTION: BE IT ENACTED BY THE (INSERT PROPER TITLE OF
 LOCAL LEGISLATIVE BODY) AS FOLLOWS:
   SECTION ONE.  RECEIPTS  FROM  SALES  OF  AND  CONSIDERATION  GIVEN  OR
 CONTRACTED  TO  BE  GIVEN  FOR, OR FOR THE USE OF, PROPERTY AND SERVICES
 EXEMPT FROM STATE SALES AND COMPENSATING USE TAXES PURSUANT TO PARAGRAPH
 TWENTY-FOUR-A OF SUBDIVISION (A) OF SECTION 1115 OF THE  TAX  LAW  SHALL
 ALSO  BE  EXEMPT  FROM  SALES AND COMPENSATING USE TAXES IMPOSED IN THIS
 JURISDICTION.
   SECTION TWO. THIS RESOLUTION SHALL TAKE EFFECT  JUNE  1,  (INSERT  THE
 YEAR, BUT NOT EARLIER THAN THE YEAR 2023) AND SHALL APPLY TO SALES MADE,
 SERVICES  RENDERED  AND USES OCCURRING ON AND AFTER THAT DATE IN ACCORD-
 ANCE WITH THE APPLICABLE TRANSITIONAL PROVISIONS IN SECTIONS 1106,  1216
 AND 1217 OF THE NEW YORK TAX LAW.
   §  10.  This act shall take effect on the ninetieth day after it shall
 have become a law; provided, that the amendments to  the  opening  para-
 graph  of section 301-c of the tax law, made by section four of this act
 shall not affect the repeal of such paragraph pursuant to section 19  of
 part  W-1  of  chapter 109 of the laws of 2006, as amended, and shall be
 deemed repealed therewith, when upon such date the provisions of section
 five of this act shall take effect.

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