Bill Text: NY S05122 | 2009-2010 | General Assembly | Introduced
Bill Title: Relates to exempting dyed Diesel motor fuel used in farming or manufacturing.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-01-06 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS [S05122 Detail]
Download: New_York-2009-S05122-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 5122 2009-2010 Regular Sessions I N S E N A T E April 27, 2009 ___________ Introduced by Sen. VALESKY -- 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 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: 1 Section 1. Paragraph (c) of subdivision 3 of section 282-a of the tax 2 law, as added by chapter 302 of the laws of 2006, is amended to read as 3 follows: 4 (c) Limited exemptions for dyed Diesel motor fuel. (i) The tax imposed 5 by this section shall not apply to: (A) the sale of dyed Diesel motor 6 fuel by the importer to a purchaser under the circumstances and subject 7 to the terms and conditions as follows: (1) the importer and purchaser 8 are each registered under this article as a full Diesel motor fuel 9 distributor; (2) such importer has imported the enhanced Diesel motor 10 fuel, which is the subject of the sale, into the state and has dyed such 11 fuel to comply with the provisions of 26 USC S 4082(a) and the regu- 12 lations thereunder, as may be amended from time to time; (3) the 13 purchaser is a holder of a currently valid direct payment permit issued 14 pursuant to section two hundred eighty-three-d of this article; and 15 (4)(I) such purchaser is primarily engaged in the retail heating oil 16 business and such dyed Diesel motor fuel will be sold by such purchaser 17 in a retail sale to a consumer for use [solely as] BY THAT CONSUMER 18 DIRECTLY AND EXCLUSIVELY FOR residential or commercial heating [oil], OR 19 (II) SUCH DYED DIESEL MOTOR FUEL WILL BE SOLD BY SUCH PURCHASER IN A 20 RETAIL SALE TO A CONSUMER FOR USE BY THAT CONSUMER DIRECTLY AND EXCLU- 21 SIVELY IN THE PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR SALE BY FARM- 22 ING, BUT ONLY IF ALL OF THAT FUEL IS DELIVERED ON THE FARMING SITE AND 23 IS CONSUMED OTHER THAN ON THE HIGHWAYS OF THIS STATE (EXCEPT FOR USE OF 24 THE HIGHWAY TO REACH ADJACENT FARMLANDS); PROVIDED, HOWEVER, THAT A EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11459-01-9 S. 5122 2 1 FARMER MAY PURCHASE NO MORE THAN FOUR THOUSAND FIVE HUNDRED GALLONS OF 2 DIESEL MOTOR FUEL AND DYED DIESEL MOTOR FUEL COMBINED IN A THIRTY-DAY 3 PERIOD FOR SUCH USE OR CONSUMPTION EXEMPT FROM THE MEASURE OF THE TAX 4 IMPOSED BY THIS SECTION, EXCEPT IN ACCORDANCE WITH PRIOR CLEARANCE GIVEN 5 BY THE COMMISSIONER, OR (III) SUCH DYED DIESEL MOTOR FUEL WILL BE SOLD 6 BY SUCH PURCHASER IN A RETAIL SALE TO A CONSUMER FOR USE BY THAT CONSUM- 7 ER DIRECTLY AND EXCLUSIVELY IN THE PRODUCTION OF TANGIBLE PERSONAL PROP- 8 ERTY FOR SALE BY MANUFACTURING, PROCESSING, OR ASSEMBLY, BUT ONLY IF ALL 9 OF THAT FUEL IS DELIVERED ON THE MANUFACTURING SITE AND IS CONSUMED 10 OTHER THAN ON THE HIGHWAYS OF THIS STATE; (B) a first sale of the dyed 11 Diesel motor fuel, which [as] WAS the subject of an exempt sale 12 described in clause (A) of this subparagraph, by the purchaser described 13 therein to a purchaser likewise holding a currently valid direct pay 14 permit under the circumstances and subject to the terms and conditions 15 as follows: (1) the sale [of] TO such second purchaser by such first 16 purchaser is the first and only sale of such dyed Diesel motor fuel by 17 such first purchaser; (2) (I) such second purchaser is primarily engaged 18 in the retail heating oil business and such dyed Diesel motor fuel will 19 be sold by such second purchaser in a retail sale to a consumer for use 20 [solely as] BY THAT CONSUMER DIRECTLY AND EXCLUSIVELY FOR residential or 21 commercial heating [oil], OR (II) SUCH DYED DIESEL MOTOR FUEL WILL BE 22 SOLD BY SUCH SECOND PURCHASER IN A RETAIL SALE TO A CONSUMER FOR USE BY 23 THAT CONSUMER DIRECTLY AND EXCLUSIVELY IN THE PRODUCTION OF TANGIBLE 24 PERSONAL PROPERTY FOR SALE BY FARMING, BUT ONLY IF ALL OF THAT FUEL IS 25 DELIVERED ON THE FARMING SITE AND IS CONSUMED OTHER THAN ON THE HIGHWAYS 26 OF THIS STATE (EXCEPT FOR USE OF THE HIGHWAY TO REACH ADJACENT FARM- 27 LANDS); PROVIDED, HOWEVER, THAT A FARMER MAY PURCHASE NO MORE THAN FOUR 28 THOUSAND FIVE HUNDRED GALLONS OF DIESEL MOTOR FUEL AND DYED DIESEL MOTOR 29 FUEL COMBINED IN A THIRTY-DAY PERIOD FOR SUCH USE OR CONSUMPTION EXEMPT 30 FROM THE MEASURE OF THE TAX IMPOSED BY THIS SECTION, EXCEPT IN ACCORD- 31 ANCE WITH PRIOR CLEARANCE GIVEN BY THE COMMISSIONER, OR (III) SUCH DYED 32 DIESEL MOTOR FUEL WILL BE SOLD BY SUCH SECOND PURCHASER IN A RETAIL SALE 33 TO A CONSUMER FOR USE BY THAT CONSUMER DIRECTLY AND EXCLUSIVELY IN THE 34 PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR SALE BY MANUFACTURING, 35 PROCESSING, OR ASSEMBLY, BUT ONLY IF ALL OF THAT FUEL IS DELIVERED ON 36 THE MANUFACTURING SITE AND IS CONSUMED OTHER THAN ON THE HIGHWAYS OF 37 THIS STATE; (3) on the sale to the second purchaser, such first purchas- 38 er described in such clause (A) attaches to the invoice a copy of the 39 invoice given by the importer on the exempt sale described in such 40 clause (A), so as to identify the origin of the dyed Diesel fuel [which] 41 THAT is the subject of the sale to such second purchaser; and (4) such 42 second purchaser certifies that such dyed Diesel motor fuel is to be 43 sold by it only to a consumer for use [solely as] BY THAT CONSUMER 44 DIRECTLY AND EXCLUSIVELY (I) FOR residential or commercial heating 45 [oil], (II) IN THE PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR SALE BY 46 FARMING, BUT ONLY IF ALL OF THAT FUEL IS DELIVERED ON THE FARMING SITE 47 AND IS CONSUMED OTHER THAN ON THE HIGHWAYS OF THIS STATE (EXCEPT FOR USE 48 OF THE HIGHWAY TO REACH ADJACENT FARMLANDS); PROVIDED, HOWEVER, THAT A 49 FARMER MAY PURCHASE NO MORE THAN FOUR THOUSAND FIVE HUNDRED GALLONS OF 50 DIESEL MOTOR FUEL AND DYED DIESEL MOTOR FUEL COMBINED IN A THIRTY-DAY 51 PERIOD FOR SUCH USE OR CONSUMPTION EXEMPT FROM THE MEASURE OF THE TAX 52 IMPOSED BY THIS SECTION, EXCEPT IN ACCORDANCE WITH PRIOR CLEARANCE GIVEN 53 BY THE COMMISSIONER, OR (III) IN THE PRODUCTION OF TANGIBLE PERSONAL 54 PROPERTY FOR SALE BY MANUFACTURING, PROCESSING, OR ASSEMBLY, BUT ONLY IF 55 ALL OF THAT FUEL IS DELIVERED ON THE MANUFACTURING SITE AND IS CONSUMED 56 OTHER THAN ON THE HIGHWAYS OF THIS STATE. (ii) Prior to, or at the time S. 5122 3 1 of, such sale of such dyed Diesel motor fuel described in clause (A) or 2 (B) of subparagraph (i) of this paragraph, the purchaser shall give a 3 certificate to the seller setting forth the intended use of the dyed 4 Diesel motor fuel [which] THAT is sought to be qualified for exemption 5 under this paragraph, that the purchaser has been issued a direct 6 payment permit which is currently valid, that such permit has not been 7 suspended or revoked and that the purchaser otherwise meets the quali- 8 fications of this paragraph. (iii) The limited exemptions allowed under 9 this paragraph, EXCEPT THE EXEMPTIONS FOR SALES OF DYED DIESEL MOTOR 10 FUEL TO CONSUMERS FOR USE BY THOSE CONSUMERS IN THE PRODUCTION OF TANGI- 11 BLE PERSONAL PROPERTY FOR SALE BY FARMING, shall in no event apply to 12 any dyed Diesel motor fuel [which] THAT is delivered into a repository 13 equipped with hose or other apparatus capable of being used to dispense 14 fuel into the fuel tank of a motor vehicle, or where the purchaser's 15 direct payment permit has been suspended or revoked and the commissioner 16 has made generally available the identity of those persons whose direct 17 payment permits have been suspended or revoked. 18 S 2. The section heading and subdivision 1 of section 283-d of the tax 19 law, as added by chapter 302 of the laws of 2006, is amended to read as 20 follows: 21 Direct payment permit with respect to dyed Diesel motor fuel [used as 22 residential or commercial heating oil]. 1. The commissioner, upon the 23 application of a person registered under this article as a distributor 24 of Diesel motor fuel, may issue a direct payment permit to such person 25 for the payment of tax liability under this article with respect to dyed 26 Diesel motor fuel [which] THAT is certified to be used [solely] DIRECTLY 27 AND EXCLUSIVELY for ONE OF THE FOLLOWING PURPOSES: residential or 28 commercial heating [oil], PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR 29 SALE BY FARMING, OR PRODUCTION OF TANGIBLE PERSONAL PROPERTY FOR SALE BY 30 MANUFACTURING, PROCESSING, OR ASSEMBLY if: (a) such person, at the time 31 of application, meets all the requirements described in section two 32 hundred eighty-two-a of this article and any other requirements under 33 this article relating to Diesel motor fuel distributors, (b) there has 34 been timely filing and payment of tax liability with respect to taxes 35 under this chapter (excluding those taxes timely protested), by such 36 person, any officer, director or partner of such person, shareholder 37 directly or indirectly owning more than ten percent of the number of 38 shares of stock of such person entitling the holder thereof to vote for 39 the election of directors or trustees, or any shareholder or employee of 40 such person under a duty to file a return under or pursuant to the 41 authority of this article or pay the taxes imposed by or pursuant to the 42 authority of this article on behalf of such person (the provisions of 43 subdivision ten of section two hundred eighty-three of this article 44 shall apply to the provisions of this paragraph), AND (c) [such person 45 is engaged primarily in the retail sale of residential or commercial 46 heating oil and does not make wholesale sales of Diesel motor fuel other 47 than in the circumstances described in clause (B) of subparagraph (i) of 48 paragraph (c) of subdivision three of section two hundred eighty-two-a 49 of this article, and (d)] such person files a bond or other security 50 covering potential tax liability under this chapter with respect to such 51 dyed Diesel motor fuel. 52 S 3. Clause (i) of subparagraph (C) of paragraph 1 of subdivision (c) 53 of section 300 of the tax law, as added by chapter 190 of the laws of 54 1990, is amended to read as follows: 55 (i) ["nonautomotive type diesel] "NONAUTOMOTIVE-TYPE DIESEL motor 56 fuel" as used in relation to the rates of the tax imposed by section S. 5122 4 1 three hundred one-a of this article means any diesel motor fuel, as 2 described in subparagraph (A) of this paragraph, which would be excluded 3 from the diesel motor fuel excise tax imposed by section two hundred 4 eighty-two-a of this chapter solely by reason of the enumerated exclu- 5 sions based on ultimate use of the product set forth in paragraph (b) of 6 subdivision three of such section, AND ANY DYED DIESEL MOTOR FUEL, AS 7 DESCRIBED IN SUBDIVISION EIGHTEEN OF SECTION TWO HUNDRED EIGHTY-TWO OF 8 THIS CHAPTER, WHICH WOULD BE EXCLUDED FROM THE DIESEL MOTOR FUEL EXCISE 9 TAX IMPOSED BY SECTION TWO HUNDRED EIGHTY-TWO-A OF THIS CHAPTER SOLELY 10 BY REASON OF THE ENUMERATED EXCLUSIONS BASED ON ULTIMATE USE OF THE 11 PRODUCT SET FORTH IN PARAGRAPH (C) OF SUBDIVISION THREE OF THAT SECTION, 12 and (ii) "automotive-type diesel motor fuel" as used in relation to the 13 rates of tax imposed by such section three hundred one-a means diesel 14 motor fuel [which] THAT is not nonautomotive-type diesel motor fuel. 15 S 4. Subdivision (m) of section 300 of the tax law, as added by chap- 16 ter 309 of the laws of 1996, is amended to read as follows: 17 (m) "Manufacturing gallonage" means residual petroleum product, DYED 18 DIESEL MOTOR FUEL, or diesel motor fuel (which is not enhanced diesel 19 motor fuel) THAT IS used and consumed directly and exclusively in the 20 production of tangible personal property for sale by manufacturing, 21 processing or assembly, but only if all of such fuel or product is 22 delivered on the manufacturing site and is consumed other than on the 23 highways of this state. "Manufacturing gallonage" shall in no event 24 include diesel motor fuel OR DYED DIESEL MOTOR FUEL delivered at a fill- 25 ing station or into a repository [which] THAT is equipped with a hose or 26 other apparatus by which such fuel can be dispensed into the fuel tank 27 of a motor vehicle. The commissioner shall require such documentary 28 proof to substantiate the classification of product as "manufacturing 29 gallonage" as the commissioner deems appropriate. 30 S 5. Subdivision (j) of section 301-c of the tax law, as added by 31 chapter 309 of the laws of 1996, is amended to read as follows: 32 (j) Reimbursement for manufacturing gallonage. Commencing January 33 first, nineteen hundred ninety-eight, a subsequent purchaser shall be 34 eligible for reimbursement of any taxes imposed under this article with 35 respect to gallonage of residual petroleum product, DYED DIESEL MOTOR 36 FUEL, and diesel motor fuel (which is not enhanced diesel motor fuel), 37 subsequently sold by such purchaser to a consumer as "manufacturing 38 gallonage." This reimbursement may be claimed only where (1) any tax 39 imposed pursuant to this article has been paid with respect to such 40 gallonage and the entire amount of such tax has been absorbed by such 41 purchaser, and (2) such purchaser possesses documentary proof satisfac- 42 tory to the commissioner evidencing the absorption by it of the entire 43 amount of such tax. Provided, however, that the commissioner shall 44 require such documentary proof to qualify for any reimbursement of tax 45 provided by this subdivision as the commissioner deems appropriate 46 including a certificate by the consumer that such product is to be used 47 and consumed exclusively as "manufacturing gallonage". 48 S 6. This act shall take effect on the first day of the sales tax 49 quarterly period, as described in subdivision (b) of section 1136 of the 50 tax law, next commencing at least ninety days after this act becomes a 51 law; provided, however, that registered distributors of Diesel motor 52 fuel may apply for direct payment permits thirty days after this act 53 becomes a law.