Bill Text: NY A04154 | 2023-2024 | General Assembly | Introduced

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Bill Title: Relates to tax on sales of motor fuel and petroleum products; repeals certain provisions of law relating thereto.

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Introduced) 2024-01-03 - referred to ways and means [A04154 Detail]

Download: New_York-2023-A04154-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          4154

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                    February 10, 2023
                                       ___________

        Introduced   by  M.  of  A.  KELLES,  GONZALEZ-ROJAS,  MITAYNES,  SIMON,
          WILLIAMS, L. ROSENTHAL, MAMDANI --  read  once  and  referred  to  the
          Committee on Ways and Means

        AN  ACT  to amend the tax law, in relation to tax on sales of motor fuel
          and petroleum products; to repeal paragraph 3 of subdivision  (f)  and
          paragraph 4 of subdivision (g) of section 301-a of the tax law, relat-
          ing  to  manufacturing  gallonage  for  purposes  of the imposition of
          certain taxes; to repeal subdivisions (i), (j),  and  (l)  of  section
          301-c  of  the  tax  law  relating to reimbursement; to repeal section
          301-d of the tax law relating to a utility credit or reimbursement; to
          repeal subdivision (f) of section 301-e of the tax law relating to  an
          aviation  fuel  business which services four or more cities; to repeal
          subparagraph (xi) of paragraph 3 of subdivision (c) of section 1105 of
          the tax law relating to services  rendered  with  respect  to  certain
          property;  to repeal paragraph 9 of subdivision (a) of section 1115 of
          the tax law relating to fuel  sold  to  an  airline  for  use  in  its
          airplanes;  and to amend the tax law, in relation to making conforming
          technical changes

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subdivision (m) of section 301-a of the tax law, as added
     2  by section 20 of part K of chapter 61 of the laws of 2011, is amended to
     3  read as follows:
     4    (m) Special rate adjustment for certain vessels.  Notwithstanding  any
     5  provision of this section to the contrary, the use of non-highway diesel
     6  motor  fuel  in  the  engine  of a vessel to propel such vessel shall be
     7  subject to tax at the motor fuel and  highway  diesel  motor  fuel  rate
     8  provided  for in this section, and shall be subject to the provisions of
     9  section three hundred one-j of this article,  including  the  adjustment
    10  set  forth  in paragraph [four] three of subdivision (a) of such section
    11  three hundred one-j. A credit or refund shall be available to the extent

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07826-01-3
        A. 4154                             2

     1  tax paid on gallonage used to propel any such vessel exceeds the  amount
     2  of  tax  due  based on the tax rate set forth herein. Provided, however,
     3  that the commissioner shall require such documentary  proof  to  qualify
     4  for  any  credit or reimbursement provided hereunder as the commissioner
     5  deems appropriate.
     6    § 2. Paragraph 3 of subdivision (f) and paragraph 4 of subdivision (g)
     7  of section 301-a of the tax law are REPEALED.
     8    § 3. Subdivisions (a) and (d) of section 301-b of the tax law,  subdi-
     9  vision  (a)  as added by chapter 190 of the laws of 1990, paragraph 5 of
    10  subdivision (a) as amended by section 3 of part E of chapter 59  of  the
    11  laws  of  2012,  paragraphs  6,  7  and 8 of subdivision (a) as added by
    12  section 4 of part W-1 of chapter 109 of the laws of 2006,  and  subdivi-
    13  sion (d) as amended by section 21 of part K of chapter 61 of the laws of
    14  2011, are amended to read as follows:
    15    (a) Products. (1) [Kerosene sold or used by a petroleum business which
    16  is registered under article twelve-A of this chapter as a distributor of
    17  diesel  motor  fuel  so long as (i) such product has not been blended or
    18  mixed with any other product constituting diesel  motor  fuel  or  motor
    19  fuel  or  a residual petroleum product and (ii) such product is not used
    20  by the petroleum business as fuel to operate a motor vehicle or sold  by
    21  such petroleum business to a consumer for use as fuel to operate a motor
    22  vehicle.
    23    (2) Kero-jet fuel (i) sold by a petroleum business which is registered
    24  under  article twelve-A of this chapter as a distributor of diesel motor
    25  fuel to a consumer for use exclusively as jet  aircraft  fuel  or  to  a
    26  petroleum business registered under such article twelve-A as a "distrib-
    27  utor  of  kero-jet  fuel only" where such fixed base operator is engaged
    28  solely in making or offering to make retail sales not in bulk  of  kero-
    29  jet  fuel  directly into the fuel tank of an airplane for the purpose of
    30  operating such airplane, (ii) used by a petroleum  business,  registered
    31  under  article twelve-A of this chapter as a distributor of diesel motor
    32  fuel, exclusively as jet aircraft fuel, or (iii) sold at retail  not  in
    33  bulk  by  a petroleum business registered under article twelve-A of this
    34  chapter as a "distributor of kero-jet fuel  only"  where  such  fuel  is
    35  delivered  directly  into the fuel tank of a jet airplane for use in the
    36  operation of such airplane.
    37    (3) Aviation gasoline, meeting the specifications set forth in  Ameri-
    38  can  Standard Testing Material Specification D910 or Military Specifica-
    39  tion MIL-G-5572, which is imported or caused to be  imported  into  this
    40  state by a petroleum business which is registered under article twelve-A
    41  of  this  chapter  as  a distributor of motor fuel or produced, refined,
    42  manufactured or compounded in this state by such a petroleum business.
    43    (4) Residual petroleum product sold by a petroleum business registered
    44  under this article as a residual  petroleum  product  business  if  such
    45  product  is sold by such petroleum business to a consumer for use exclu-
    46  sively as bunker fuel for vessels or if such product  is  used  by  such
    47  petroleum business exclusively as bunker fuel in its own vessels.
    48    (5) Liquefied petroleum gases, such as butane, ethane or propane.
    49    (6)]  E85  imported  or  caused  to  be  imported  into  this state or
    50  produced, refined, manufactured or compounded in this state by a  petro-
    51  leum  business  registered  under article twelve-A of this chapter, as a
    52  distributor of motor fuel, and then sold by such petroleum business  and
    53  delivered  to  a  filling  station  and placed in a storage tank of such
    54  filling station for such E85 to be dispensed directly into a motor vehi-
    55  cle for use in the operation of such vehicle.
        A. 4154                             3

     1    [(7)] (i) Partial B20 exemption. B20 imported or caused to be imported
     2  into this state or produced, refined, manufactured or compounded in this
     3  state by a petroleum business registered under article twelve-A of  this
     4  chapter,  as  a  distributor of diesel motor fuel, and then sold by such
     5  petroleum business.
     6    (ii)  Calculation  of  partial  exemption.  The  amount of the partial
     7  exemption under this paragraph shall be determined  by  multiplying  the
     8  quantity  of  B20 times twenty percent of the applicable taxes otherwise
     9  imposed by this article on such fuel.
    10    [(8)] (2) CNG or hydrogen.
    11    (d) Sales to consumers for heating purposes. [(1)]  Total  residential
    12  heating  exemption.  Non-highway  diesel  motor fuel sold by a petroleum
    13  business registered under article twelve-A of this chapter as a distrib-
    14  utor of diesel motor fuel or residual petroleum product sold by a petro-
    15  leum business registered under this  article  as  a  residual  petroleum
    16  product  business  to  the  consumer exclusively for residential heating
    17  purposes only if such non-highway diesel motor fuel is delivered into  a
    18  storage  tank  which  is  not equipped with a hose or other apparatus by
    19  which such fuel can be dispensed into the fuel tank of a  motor  vehicle
    20  and such storage tank is attached to the heating unit burning such fuel.
    21    [(2) Partial non-residential heating exemption. (A) Non-highway diesel
    22  motor  fuel  sold  by  a  petroleum  business  registered  under article
    23  twelve-A of this chapter as a distributor of diesel motor fuel or  resi-
    24  dual  petroleum  product  sold  by a petroleum business registered under
    25  this article as a residual petroleum product business  to  the  consumer
    26  exclusively for heating, other than residential heating purposes only if
    27  such  non-highway  diesel  motor  fuel  is delivered into a storage tank
    28  which is not equipped with a hose or other apparatus by which such  fuel
    29  can  be dispensed into the fuel tank of a motor vehicle and such storage
    30  tank is attached to the heating unit burning such fuel  (B)  Calculation
    31  of  partial  exemption. The partial exemption under this paragraph shall
    32  be determined by multiplying the quantity of  non-highway  diesel  motor
    33  fuel and residual petroleum product eligible for the exemption times the
    34  sum  of the then current rate of the supplemental tax imposed by section
    35  three hundred one-j of this article and forty-six percent  of  the  then
    36  current  rate  of the tax imposed by section three hundred one-a of this
    37  article, with respect to the specific non-highway diesel motor  fuel  or
    38  residual petroleum product rate, as the case may be.]
    39    §  4.  The  subdivision  heading and paragraph 1 of subdivision (c) of
    40  section 301-b of the tax law, as added by chapter 190  of  the  laws  of
    41  1990, are amended to read as follows:
    42    Sales  to  [New York state and] the federal government. (1) Motor fuel
    43  imported or caused to be imported into this state or produced,  refined,
    44  manufactured  or compounded in this state by a petroleum business regis-
    45  tered under article twelve-A of this chapter, as a distributor of  motor
    46  fuel,  and  then  sold  by  such  petroleum  business to an organization
    47  described in paragraph [one or] two of subdivision (a) of section eleven
    48  hundred sixteen of this chapter where such motor fuel is  used  by  such
    49  organization for its own use or consumption.
    50    §  5.  The  opening  paragraph and subdivisions (a) and (b) of section
    51  301-c of the tax law, the opening paragraph as amended by section  2  of
    52  part  T of chapter 59 of the laws of 2022, subdivision (a) as amended by
    53  section 23 of part K of chapter 61 of the laws of  2011, and subdivision
    54  (b) as amended by chapter 330 of the laws of 1991, are amended  to  read
    55  as follows:
        A. 4154                             4

     1    A subsequent purchaser shall be eligible for reimbursement of tax with
     2  respect  to the following gallonage, subsequently sold by such purchaser
     3  in accordance with subdivision (a), (b), (e), (h),  [(j),  (k),  (n)  or
     4  (o)]  (i),  (k)  or  (l)  of  this  section or used by such purchaser in
     5  accordance  with  subdivision (c), (d), (f), (g), [(i), (l), (m)] (j) or
     6  (q) of this section, which gallonage has been included in the measure of
     7  the tax imposed by this article on a petroleum business:
     8    (a) [Non-highway Diesel motor fuel used  for  heating  purposes.  (1)]
     9  Total  residential  heating reimbursement. Non-highway Diesel motor fuel
    10  purchased in this state and sold by such purchaser to a consumer for use
    11  exclusively for residential heating purposes but  only  where  (i)  such
    12  non-highway  diesel motor fuel is delivered into a storage tank which is
    13  not equipped with a hose or other apparatus by  which  such  non-highway
    14  Diesel motor fuel can be dispensed into the fuel tank of a motor vehicle
    15  and  such storage tank is attached to the heating unit burning such non-
    16  highway Diesel motor fuel, (ii) the tax imposed pursuant to this article
    17  has been paid with respect to such non-highway diesel motor fuel and the
    18  entire amount of such tax has been absorbed by such purchaser, and (iii)
    19  such purchaser possesses documentary proof satisfactory to  the  commis-
    20  sioner  evidencing  the absorption by it of the entire amount of the tax
    21  imposed pursuant to this article. Provided, however,  that  the  commis-
    22  sioner is authorized, in the event that the commissioner determines that
    23  it  would  not threaten the integrity of the administration and enforce-
    24  ment of the tax imposed by this article, to provide a reimbursement with
    25  respect to a retail sale to a consumer for residential heating  purposes
    26  of  less than ten gallons of non-highway diesel motor fuel provided such
    27  fuel is not dispensed into the tank of a motor vehicle.
    28    [(2) Partial non-residential heating  reimbursement.  (A)  Non-highway
    29  Diesel  motor fuel purchased in this state and sold by such purchaser to
    30  a consumer for use exclusively for heating, other than  for  residential
    31  heating  purposes, but only where (i) such non-highway diesel motor fuel
    32  is delivered into a storage tank which is not equipped with  a  hose  or
    33  other  apparatus  by  which  such  non-highway  Diesel motor fuel can be
    34  dispensed into the fuel tank of a motor vehicle and such storage tank is
    35  attached to the heating unit burning such non-highway Diesel motor fuel,
    36  (ii) the tax imposed pursuant to this article has been paid with respect
    37  to such non-highway diesel motor fuel and the entire amount of such  tax
    38  has  been absorbed by such purchaser, and (iii) such purchaser possesses
    39  documentary  proof  satisfactory  to  the  commissioner  evidencing  the
    40  absorption  by  it  of  the entire amount of the tax imposed pursuant to
    41  this article.
    42    (B) Calculation of partial reimbursement.  Notwithstanding  any  other
    43  provision  of  this  article, the amount of the reimbursement under this
    44  paragraph shall be determined by multiplying the quantity of non-highway
    45  diesel motor fuel eligible for the reimbursement times the  sum  of  the
    46  then  current  rate  of  the  supplemental  tax imposed by section three
    47  hundred one-j of this article and forty-six percent of the then  current
    48  rate  of the tax imposed by section three hundred one-a of this article,
    49  with respect to the non-highway diesel motor fuel rate, as the case  may
    50  be.]
    51    (b)  Sales  to [New York state and] the federal government. Motor fuel
    52  and diesel motor fuel purchased in this state and sold by such purchaser
    53  in this state to an organization described in paragraph [one or] two  of
    54  subdivision  (a) of section eleven hundred sixteen of this chapter where
    55  (i) such motor fuel or diesel motor fuel is for such organization's  own
    56  use  or  consumption,  (ii) the tax imposed pursuant to this article has
        A. 4154                             5

     1  been paid with respect to such motor fuel or diesel motor fuel  and  the
     2  entire amount of such tax has been absorbed by such purchaser and, (iii)
     3  such  purchaser  possesses documentary proof satisfactory to the commis-
     4  sioner  of  taxation  and finance evidencing the absorption by it of the
     5  entire amount of the tax imposed pursuant  to  this  article.  Provided,
     6  however,  that  the commissioner [of taxation and finance] shall require
     7  such documentary proof to qualify for any reimbursement of tax  provided
     8  by  this  section  as  the commissioner deems appropriate, including the
     9  expansion of any certification required pursuant to section two  hundred
    10  eighty-five-a  or two hundred eighty-five-b of this chapter to cover the
    11  taxes imposed pursuant to this article.
    12    § 5-a. The opening paragraph of section  301-c  of  the  tax  law,  as
    13  amended  by  section  3  of part T of chapter 59 of the laws of 2022, is
    14  amended to read as follows:
    15    A subsequent purchaser shall be eligible for reimbursement of tax with
    16  respect to the following gallonage, subsequently sold by such  purchaser
    17  in accordance with subdivision (a), (b), (e), (h)[, (j)] or [(k)] (i) of
    18  this  section  or  used by such purchaser in accordance with subdivision
    19  (c), (d), (f), (g), [(i), (l), (m)] (j) or (q) of  this  section,  which
    20  gallonage  has  been  included in the measure of the tax imposed by this
    21  article on a petroleum business:
    22    § 6. Subdivisions (i), (j) and (l) of section 301-c of the tax law are
    23  REPEALED.
    24    § 7. Subdivisions (k), (m), (n), (o), (p) and (q) of section 301-c  of
    25  the  tax  law  are  redesignated subdivisions (i), (j), (k), (l), (m)and
    26  (n).
    27    § 8. Section 301-d of the tax law is REPEALED.
    28    § 9. Paragraph 4 of subdivision (e) of section 301-e of the  tax  law,
    29  as  added  by  chapter  190  of  the laws of 1990, is amended to read as
    30  follows:
    31    (4) "aviation fuel" means kero-jet fuel  and  aviation  gasoline  [(as
    32  described in paragraph three of subdivision (a) of section three hundred
    33  one-b of this article)] meeting the specifications set forth in American
    34  Standard  Testing  Material Specification D910 or Military Specification
    35  MIL-G-5572. Provided, further the term kero-jet shall not include  naph-
    36  tha  based aviation fuel refined and used solely for propelling military
    37  jet airplanes of the United States Armed Forces.
    38    § 10. Subdivision (f) of section 301-e of the tax law is REPEALED.
    39    § 11. Subdivision (a) of section 301-j of the tax law, as  amended  by
    40  chapter  309 of the laws of 1996, paragraphs 1, 2, 3 and 4 as amended by
    41  section 29 of part K of chapter 61 of the laws of 2011,  is  amended  to
    42  read as follows:
    43    (a)  Imposition  of  tax.    (1)  In  addition to the taxes imposed by
    44  sections three hundred one-a and three hundred one-e  of  this  article,
    45  there  is  hereby  imposed  upon every petroleum business subject to tax
    46  imposed under section three hundred one-a  of  this  article  and  every
    47  aviation fuel business subject to the aviation gasoline component of the
    48  tax imposed under section three hundred one-e of this article, a supple-
    49  mental  monthly tax for each or any part of a taxable month at a rate of
    50  six and eight-tenths cents per  gallon  with  respect  to  the  products
    51  included  in  each  component of the taxes imposed by such section three
    52  hundred one-a and the aviation gasoline component of the tax imposed  by
    53  such section three hundred one-e of this article.
    54    (2)  [Provided,  however,  "commercial  gallonage,"  as  such  term is
    55  defined in subdivision (k) of section three  hundred  of  this  article,
    56  shall be exempt from the measure of the tax imposed under this section.
        A. 4154                             6

     1    (3)]  Provided, further, "railroad diesel," as such term is defined in
     2  subdivision (l) of section three  hundred  of  this  article,  shall  be
     3  exempt from the measure of the tax imposed under this section.
     4    [(4)]  (3)  Provided,  further, a separate per gallon rate shall apply
     5  with respect to highway diesel motor fuel. Such rate shall be determined
     6  by taking the adjusted rate per gallon of tax  imposed  under  paragraph
     7  one  of this subdivision as adjusted in accordance with paragraph [five]
     8  four of this subdivision and subtracting therefrom one  and  three-quar-
     9  ters  cents.    Commencing  January first, two thousand twelve, and each
    10  January thereafter, the per gallon rate  applicable  to  highway  diesel
    11  motor fuel shall be the adjusted rate under paragraph one of this subdi-
    12  vision  as  adjusted  in  accordance  with paragraph [five] four of this
    13  subdivision which commences on such date minus  one  and  three-quarters
    14  cents.  The  resulting  rate  under this paragraph shall be expressed in
    15  hundredths of a cent.
    16    [(5)] (4) Except as  herein  provided,  the  tax  imposed  under  this
    17  section  shall  be calculated in the same respective manner as the taxes
    18  imposed by section three hundred one-a and section three  hundred  one-e
    19  of  this article. Except [for section three hundred one-d and except] as
    20  otherwise provided in this section, all the provisions of  this  article
    21  applicable  to  the  taxes  imposed  by sections three hundred one-a and
    22  three hundred one-e of this article, shall apply  with  respect  to  the
    23  supplemental  tax  imposed  by  this section to the same extent as if it
    24  were respectively imposed by such sections.
    25    § 12. Subparagraphs (ix) and (x) of paragraph 3  and  paragraph  5  of
    26  subdivision  (c)  of  section  1105 of the tax law, subparagraph (ix) of
    27  paragraph 3 as added by chapter 395 of the laws  of  1998,  subparagraph
    28  (x)  of  paragraph  3 as added by section 1 of part FF of chapter 407 of
    29  the laws of 1999, and paragraph 5 as amended by chapter 321 of the  laws
    30  of 2005, are amended to read as follows:
    31    (ix) [such services rendered with respect to tangible property used or
    32  consumed directly and predominantly in the production for sale of gas or
    33  oil  by  manufacturing,  processing,  generating,  assembling, refining,
    34  mining, or extracting.
    35    (x)] such services rendered with  respect  to  property  described  in
    36  paragraph  twelve-a of subdivision (a) of section eleven hundred fifteen
    37  of this article.
    38    (5) Maintaining, servicing or repairing  real  property,  property  or
    39  land,  as  such  terms are defined in the real property tax law, whether
    40  the services are performed in or outside of a building, as distinguished
    41  from adding to or improving such real property, property or land,  by  a
    42  capital improvement as such term capital improvement is defined in para-
    43  graph  nine  of  subdivision  (b)  of section eleven hundred one of this
    44  article, but excluding (i) services rendered by an individual who is not
    45  in a regular trade or business offering his services to the public, (ii)
    46  [services rendered directly with respect to real property,  property  or
    47  land  used  or consumed directly and predominantly in the production for
    48  sale of gas or oil by manufacturing, processing, generating, assembling,
    49  refining, mining, or extracting, (iii)] services rendered  with  respect
    50  to real property, property or land used or consumed predominantly either
    51  in the production of tangible personal property, for sale, by farming or
    52  in  a  commercial  horse boarding operation, or in both and [(iv)] (iii)
    53  services of removal of waste material from a  facility  regulated  as  a
    54  transfer station or construction and demolition debris processing facil-
    55  ity  by  the department of environmental conservation, provided that the
    56  waste material to be removed was not generated by the facility.
        A. 4154                             7

     1    § 13. Subparagraph (xi) of paragraph 3 of subdivision (c)  of  section
     2  1105 of the tax law is REPEALED.
     3    § 14. Paragraph 9 of subdivision (a) of section 1115 of the tax law is
     4  REPEALED.
     5    §  15.  Paragraph  (ii)  of subdivision (b) of section 1115 of the tax
     6  law, as amended by section 30 of part Y of chapter 63  of  the  laws  of
     7  2000, is amended to read as follows:
     8    (ii)  [Gas,  electricity]  Electricity,  refrigeration  and steam, and
     9  [gas,] electric, refrigeration and steam service of whatever nature  for
    10  use  or consumption directly and exclusively in research and development
    11  in the experimental or laboratory sense shall be  exempt  from  the  tax
    12  imposed  under  subdivision  (b)  of section eleven hundred five and the
    13  compensating use tax imposed under section eleven hundred  ten  of  this
    14  article.  Such  research  and development shall not be deemed to include
    15  the ordinary testing or inspection of materials or products for  quality
    16  control,  efficiency  surveys,  management  studies,  consumer  surveys,
    17  advertising, promotions or research in connection with literary, histor-
    18  ical or similar projects.
    19    § 16. Paragraph 1 of subdivision (c) of section 1115 of the  tax  law,
    20  as  amended by section 7 of part B of chapter 63 of the laws of 2000, is
    21  amended to read as follows:
    22    (1) [Fuel, gas, electricity] Electricity, refrigeration and steam, and
    23  [gas,] electric, refrigeration and steam service of whatever nature  for
    24  use  or consumption directly and exclusively in the production of tangi-
    25  ble personal property, [gas,] electricity, refrigeration or  steam,  for
    26  sale,  by  manufacturing,  processing, assembling, generating, refining,
    27  mining or extracting shall be exempt from the taxes imposed under subdi-
    28  visions (a) and (b) of section eleven hundred five and the  compensating
    29  use tax imposed under section eleven hundred ten of this article.
    30    §  17.  Subdivision  (j) of section 1115 of the tax law, as amended by
    31  section 41 of part K of chapter 61 of the laws of 2011,  is  amended  to
    32  read as follows:
    33    (j) The exemptions provided in this section shall not apply to the tax
    34  required  to  be  prepaid  pursuant  to the provisions of section eleven
    35  hundred two of this article nor to the taxes imposed by sections  eleven
    36  hundred  five  and  eleven  hundred  ten of this article with respect to
    37  receipts from sales and uses of motor fuel or diesel motor fuel, [except
    38  that the exemptions provided in paragraphs nine and forty-two of  subdi-
    39  vision (a) of this section shall apply to the tax required to be prepaid
    40  pursuant to the provisions of section eleven hundred two of this article
    41  and  to  the  taxes  imposed  by sections eleven hundred five and eleven
    42  hundred ten of this article with respect to sales and uses  of  kero-jet
    43  fuel,]  CNG,  hydrogen and E85, provided, however, the exemption allowed
    44  for E85 shall be subject to  the  additional  requirements  provided  in
    45  section  eleven  hundred  two  of  this article with respect to E85. The
    46  exemption provided in subdivision (c) of this  section  shall  apply  to
    47  sales  and uses of non-highway diesel motor fuel but only if all of such
    48  fuel is consumed other than on the public highways of  this  state.  The
    49  exemption  provided  in  subdivision  (c) of this section shall apply to
    50  sales and uses of non-highway diesel motor fuel for use  or  consumption
    51  either in the production for sale of tangible personal property by farm-
    52  ing  or in a commercial horse boarding operation, or in both but only if
    53  all of such fuel is consumed other than on the public highways  of  this
    54  state (except for the use of the public highways to reach adjacent farm-
    55  lands  or  adjacent lands used in a commercial horse boarding operation,
    56  or both).
        A. 4154                             8

     1    § 17-a. Subdivision (j) of section 1115 of the tax law, as amended  by
     2  section  41-a of part K of chapter 61 of the laws of 2011, is amended to
     3  read as follows:
     4    (j) The exemptions provided in this section shall not apply to the tax
     5  required  to  be  prepaid  pursuant  to the provisions of section eleven
     6  hundred two of this article nor to the taxes imposed by sections  eleven
     7  hundred  five  and  eleven  hundred  ten of this article with respect to
     8  receipts from sales and uses of motor fuel or diesel motor fuel[, except
     9  that the exemption provided in paragraph nine of subdivision (a) of this
    10  section shall apply to the tax required to be prepaid  pursuant  to  the
    11  provisions  of  section  eleven  hundred  two of this article and to the
    12  taxes imposed by sections eleven hundred five and eleven hundred ten  of
    13  this  article  with  respect  to  sales  and uses of kero-jet fuel]. The
    14  exemption provided in subdivision (c) of this  section  shall  apply  to
    15  sales  and uses of non-highway diesel motor fuel but only if all of such
    16  fuel is consumed other than on the public highways of  this  state.  The
    17  exemption  provided  in  subdivision  (c) of this section shall apply to
    18  sales and uses of non-highway diesel motor fuel for use  or  consumption
    19  either in the production for sale of tangible personal property by farm-
    20  ing  or in a commercial horse boarding operation, or in both but only if
    21  all of such fuel is consumed other than on the public highways  of  this
    22  state (except for the use of the public highways to reach adjacent farm-
    23  lands  or  adjacent lands used in a commercial horse boarding operation,
    24  or both).
    25    § 18. Subdivision (s) of section 1115 of the  tax  law,  as  added  by
    26  chapter 201 of the laws of 1995, is redesignated subdivision (p).
    27    §  19.  Subdivision  (w)  of  section 1115 of the tax law, as added by
    28  section 32 of part Y of chapter 63 of the laws of 2000,  is  amended  to
    29  read as follows:
    30    (w)  Receipts  from the sale of [gas or] electricity or [gas or] elec-
    31  tric service of whatever nature and consideration given or contracted to
    32  be given for, or for the use of, [gas or] electricity or [gas or]  elec-
    33  tric service of whatever nature purchased for use or consumption direct-
    34  ly  and  exclusively  to  provide  [gas or] electric service of whatever
    35  nature consisting of operating [a gas pipeline or gas distribution  line
    36  or]  an  electric  transmission  or  distribution line [and ensuring the
    37  necessary working pressure in an underground gas storage facility] shall
    38  be exempt from sales and compensating use taxes imposed by this article.
    39  Such exempt [gas or] electricity or [gas or] electric service of whatev-
    40  er nature shall include, but shall not be  limited  to,  such  [gas  or]
    41  electricity  or  [gas  or]  electric  service of whatever nature used or
    42  consumed directly and exclusively to (1) [ensure necessary working pres-
    43  sure in a gas pipeline used to transport, transmit  or  distribute  gas,
    44  (2)  operate  compressors  used to transport, transmit or distribute gas
    45  through such a gas pipeline or  distribution  line  or  used  to  ensure
    46  necessary working pressure in such a storage facility, (3) operate heat-
    47  ers  to  prevent gas in such a pipeline or distribution line from freez-
    48  ing, (4) operate equipment which removes impurities  and  moisture  from
    49  gas  in  such  a pipeline or distribution line, (5)] operate substations
    50  and equipment related to electric transmission  and  distribution  lines
    51  such   as  transformers,  capacitors,  meters,  switches,  communication
    52  devices and heating and cooling equipment,  and  [(6)]  (2)  ensure  the
    53  reliability  of  electricity or electric service transmitted or distrib-
    54  uted through such lines, for  example,  by  operating  reserve  capacity
    55  machinery and equipment.
        A. 4154                             9

     1    §  20.  Subdivision  (k)  of section 300 of the tax law, as amended by
     2  section 17 of part K of chapter 61 of the laws of 2011,  is  amended  to
     3  read as follows:
     4    (k)  "Commercial  gallonage"  means gallonage (1) which is non-highway
     5  diesel motor fuel or residual petroleum product, (2) [which is  included
     6  in  the  full  measure of the non-highway diesel motor fuel component or
     7  the residual petroleum  product  component  of  the  tax  imposed  under
     8  section  three  hundred  one-a of this article, (3)] which does not (and
     9  will not) qualify [(A) for the utility credit or reimbursement  provided
    10  for  in  section three hundred one-d of this article, (B)] (A) as "manu-
    11  facturing gallonage", as such term is defined in subdivision (m) of this
    12  section, [(C)] or (B)  for  the  not-for-profit  organization  exemption
    13  provided  for  in subdivision (h) of section three hundred one-b of this
    14  article, [or (D) for the heating exemption provided for in paragraph two
    15  of subdivision (d) of section three hundred one-b of this article or the
    16  heating reimbursement provided for in paragraph two of  subdivision  (a)
    17  of  section  three  hundred  one-c of this article,] and [(4)] (3) which
    18  will not be used nor has been used in the fuel tank connecting with  the
    19  engine of a vessel. No gallonage shall qualify as "commercial gallonage"
    20  where  such  gallonage  is  eligible  for  the  [(i)  utility  credit or
    21  reimbursement under such section three hundred one-d  of  this  article,
    22  (ii)  "manufacturing exemption" under paragraph three of subdivision (f)
    23  of section three hundred one-a of this  article,  (iii)]  not-for-profit
    24  organization  exemption  under  subdivision (h) of section three hundred
    25  one-b of this article[, or (iv) heating exemption provided for in  para-
    26  graph  two  of  subdivision  (d)  of section three hundred one-b of this
    27  article or the heating reimbursement provided for in  paragraph  two  of
    28  subdivision  (a)  of  section  three hundred one-c of this article]. The
    29  commissioner shall require such documentary proof  to  substantiate  the
    30  classification  of product as "commercial gallonage" as the commissioner
    31  deems appropriate.
    32    § 21. Paragraph 1 of subdivision (f) of section 301-b of the tax  law,
    33  as amended by section 21 of part K of chapter 61 of the laws of 2011, is
    34  amended to read as follows:
    35    (1)  Residual petroleum product and non-highway diesel motor fuel sold
    36  to an electric corporation, [as described in subdivision (a) of  section
    37  three hundred one-d of this article,] as defined in subdivision thirteen
    38  of  section two of the public service law, subject to the supervision of
    39  the department of public service, which is registered with  the  depart-
    40  ment  as a petroleum business tax direct pay permittee, and used by such
    41  electric corporation to fuel generators for the purpose of manufacturing
    42  or producing electricity where such electric corporation provides a copy
    43  of a direct pay permit authorized and issued by the commissioner, to the
    44  petroleum business making such sale. If so registered, such  corporation
    45  shall be a taxpayer under this article and (i) such electric corporation
    46  shall  file a return monthly and pay the applicable tax under this arti-
    47  cle, after the application of allowable credits, on all  such  purchases
    48  directly  to  the  commissioner, (ii) such electric corporation shall be
    49  subject to all of the provisions of this article relating to the respon-
    50  sibilities and liabilities of taxpayers under this article with  respect
    51  to such residual petroleum product and non-highway diesel motor fuel.
    52    §  22.  This  act shall take effect immediately and shall apply to all
    53  tax years commencing on or after the first of  January  next  succeeding
    54  the date on which it shall have become a law; provided, however, that:
    55    (a)  the  amendments  to  paragraphs  6, 7 and 8 of subdivision (a) of
    56  section 301-b made by section three of this act  shall  not  affect  the
        A. 4154                            10

     1  expiration  and repeal of such paragraphs and shall expire and be deemed
     2  repealed therewith;
     3    (b)  the  amendments  to the opening paragraph of section 301-c of the
     4  tax law as made by section five of this act  shall  be  subject  to  the
     5  expiration  and  reversion  of  such paragraph pursuant to section 19 of
     6  part W-1 of chapter 109 of the laws of 2006, as amended, when upon  such
     7  date the provisions of section five-a of this act shall take effect;
     8    (c)  the  amendments to subdivisions (n) and (o) of section 301-c made
     9  by section seven of this act shall not affect the expiration and  repeal
    10  of  such subdivisions and shall expire and be deemed repealed therewith;
    11  and
    12    (d) the amendments to subdivision (j) of section 1115 of the  tax  law
    13  made by section seventeen of this act shall be subject to the expiration
    14  and  reversion of such subdivision pursuant to section 19 of part W-1 of
    15  chapter 109 of the laws of 2006, as amended, when  upon  such  date  the
    16  provisions of section seventeen-a of this act shall take effect.