N.Y. Tax Law § 301-B — Exemptions

§ 301-b. Exemptions. The following gallonage otherwise includable in\nthe measure of the tax imposed by section three hundred one-a of this\narticle on a petroleum business shall be exempt from the measure of tax\non such petroleum business:\n (a) Products. (1) Kerosene sold or used by a petroleum business which\nis registered under article twelve-A of this chapter as a distributor of\ndiesel motor fuel so long as (i) such product has not been blended or\nmixed with any other product constituting diesel motor fuel or motor\nfuel or a residual petroleum product and (ii) such product is not used\nby the petroleum business as fuel to operate a motor vehicle or sold by\nsuch petroleum business to a consumer for use as fuel to operate a motor\nvehicle.\n (2) Kero-jet fuel (i) sold by a petroleum business which is registered\nunder article twelve-A of this chapter as a distributor of diesel motor\nfuel to a consumer for use exclusively as jet aircraft fuel or to a\npetroleum business registered under such article twelve-A as a\n"distributor of kero-jet fuel only" where such fixed base operator is\nengaged solely in making or offering to make retail sales not in bulk of\nkero-jet fuel directly into the fuel tank of an airplane for the purpose\nof operating such airplane, (ii) used by a petroleum business,\nregistered under article twelve-A of this chapter as a distributor of\ndiesel motor fuel, exclusively as jet aircraft fuel, or (iii) sold at\nretail not in bulk by a petroleum business registered under article\ntwelve-A of this chapter as a "distributor of kero-jet fuel only" where\nsuch fuel is delivered directly into the fuel tank of a jet airplane for\nuse in the operation of such airplane.\n (3) Aviation gasoline, meeting the specifications set forth in\nAmerican Standard Testing Material Specification D910 or Military\nSpecification MIL-G-5572, which is imported or caused to be imported\ninto this state by a petroleum business which is registered under\narticle twelve-A of this chapter as a distributor of motor fuel or\nproduced, refined, manufactured or compounded in this state by such a\npetroleum business.\n (4) Residual petroleum product sold by a petroleum business registered\nunder this article as a residual petroleum product business if such\nproduct is sold by such petroleum business to a consumer for use\nexclusively as bunker fuel for vessels or if such product is used by\nsuch petroleum business exclusively as bunker fuel in its own vessels.\n (5) Liquefied petroleum gases, such as butane, ethane or propane.\n * (6) E85 imported or caused to be imported into this state or\nproduced, refined, manufactured or compounded in this state by a\npetroleum business registered under article twelve-A of this chapter, as\na distributor of motor fuel, and then sold by such petroleum business\nand delivered to a filling station and placed in a storage tank of such\nfilling station for such E85 to be dispensed directly into a motor\nvehicle for use in the operation of such vehicle.\n * NB Repealed September 1, 2026\n * (7)(i) Partial B20 exemption. B20 imported or caused to be imported\ninto this state or produced, refined, manufactured or compounded in this\nstate by a petroleum business registered under article twelve-A of this\nchapter, as a distributor of diesel motor fuel, and then sold by such\npetroleum business.\n (ii) Calculation of partial exemption. The amount of the partial\nexemption under this paragraph shall be determined by multiplying the\nquantity of B20 times twenty percent of the applicable taxes otherwise\nimposed by this article on such fuel.\n * NB Repealed September 1, 2026\n * (8) CNG or hydrogen.\n * NB Repealed September 1, 2026\n (b) Export. (1) Motor fuel imported or caused to be imported into this\nstate or produced, refined, manufactured or compounded in this state by\na petroleum business registered under article twelve-A of this chapter,\nas a distributor of motor fuel, where\n (A) such petroleum business or the immediate purchaser of such motor\nfuel exports such motor fuel from this state for sale or use outside the\nstate,\n (B) such petroleum business or such purchaser, as the case may be,\nexporting such fuel is duly registered with or licensed by the taxing\nauthorities of the state to which such fuel is exported as a distributor\nor a dealer in the product being so exported,\n (C) in connection with the exportation, such fuel was immediately\nshipped to an identified facility in the state to which such fuel is\nexported, and\n (D) the rules and regulations of the commissioner of taxation and\nfinance relating to evidentiary requirements are complied with.\n (2) Highway diesel motor fuel imported or caused to be imported into\nthis state or produced, refined, manufactured or compounded in this\nstate by a petroleum business registered under article twelve-A of this\nchapter, as a distributor of diesel motor fuel, which is sold by such\npetroleum business to a purchaser who then exports such highway diesel\nmotor fuel from this state for sale or use outside the state where\n (A) such purchaser exporting such fuel is duly registered with or\nlicensed by the taxing authorities of the state to which such fuel is\nexported as a distributor or a dealer in the product being so exported,\n (B) in connection with the exportation, such fuel was immediately\nshipped to an identified facility in the state to which such fuel is\nexported, and\n (C) the rules and regulations of the commissioner relating to\nevidentiary requirements are complied with.\n (3) For the purpose of this article, "export" from this state shall in\nno event be construed to include motor fuel or diesel motor fuel taken\nout of this state in the fuel tank connected with the engine of a motor\nvehicle or any conveyance and consumed in the operation thereof outside\nof this state.\n (c) Sales to New York state and the federal government. (1) Motor fuel\nimported or caused to be imported into this state or produced, refined,\nmanufactured or compounded in this state by a petroleum business\nregistered under article twelve-A of this chapter, as a distributor of\nmotor fuel, and then sold by such petroleum business to an organization\ndescribed in paragraph one or two of subdivision (a) of section eleven\nhundred sixteen of this chapter where such motor fuel is used by such\norganization for its own use or consumption.\n (2) Highway diesel motor fuel imported or caused to be imported into\nthis state or produced, refined, manufactured or compounded by a\npetroleum business registered under article twelve-A of this chapter, as\na distributor of diesel motor fuel, and then sold by such petroleum\nbusiness to an organization described in paragraph one or two of\nsubdivision (a) of section eleven hundred sixteen of this chapter where\nsuch highway diesel motor fuel is used by such organization for its own\nuse or consumption.\n (3) Non-highway Diesel motor fuel sold by a petroleum business\nregistered under article twelve-A of this chapter as a distributor of\ndiesel motor fuel to an organization described in paragraph one or two\nof subdivision (a) of section eleven hundred sixteen of this chapter\nwhere such non-highway diesel motor fuel is used by such organization\nfor its own use or consumption.\n (4) Residual petroleum product sold by a petroleum business registered\nunder this article as a residual petroleum product business to an\norganization described in paragraph one or two of subdivision (a) of\nsection eleven hundred sixteen of this chapter where such product is\nused by such organization for its own use or consumption.\n (d) Sales to consumers for heating purposes. (1) Total residential\nheating exemption. Non-highway diesel motor fuel sold by a petroleum\nbusiness registered under article twelve-A of this chapter as a\ndistributor of diesel motor fuel or residual petroleum product sold by a\npetroleum business registered under this article as a residual petroleum\nproduct business to the consumer exclusively for residential heating\npurposes only if such non-highway diesel motor fuel is delivered into a\nstorage tank which is not equipped with a hose or other apparatus by\nwhich such fuel can be dispensed into the fuel tank of a motor vehicle\nand such storage tank is attached to the heating unit burning such fuel.\n (2) Partial non-residential heating exemption. (A) Non-highway diesel\nmotor fuel sold by a petroleum business registered under article\ntwelve-A of this chapter as a distributor of diesel motor fuel or\nresidual petroleum product sold by a petroleum business registered under\nthis article as a residual petroleum product business to the consumer\nexclusively for heating, other than residential heating purposes only if\nsuch non-highway diesel motor fuel is delivered into a storage tank\nwhich is not equipped with a hose or other apparatus by which such fuel\ncan be dispensed into the fuel tank of a motor vehicle and such storage\ntank is attached to the heating unit burning such fuel\n (B) Calculation of partial exemption. The partial exemption under this\nparagraph shall be determined by multiplying the quantity of non-highway\ndiesel motor fuel and residual petroleum product eligible for the\nexemption times the sum of the then current rate of the supplemental tax\nimposed by section three hundred one-j of this article and forty-six\npercent of the then current rate of the tax imposed by section three\nhundred one-a of this article, with respect to the specific non-highway\ndiesel motor fuel or residual petroleum product rate, as the case may\nbe.\n (e) Sales of highway diesel motor fuel, qualified biodiesel,\nnon-highway diesel motor fuel and residual petroleum product to\nregistered distributors of diesel motor fuel and registered residual\npetroleum product businesses.\n (1) The sale of previously untaxed highway diesel motor fuel by a\nperson registered under article twelve-A of this chapter as a\ndistributor of diesel motor fuel to a person registered under such\narticle twelve-A as a distributor of diesel motor fuel where the highway\ndiesel motor fuel is either: (A) being delivered by pipeline, railcar,\nbarge, tanker or other vessel to a terminal, the operator of which\nterminal is registered under section two hundred eighty-three-b of this\nchapter, or (B) within such a terminal where it has been so delivered.\nProvided, however, that the exemption set forth in this paragraph shall\nnot apply to any highway diesel motor fuel if it is removed from a\nterminal, other than by pipeline, barge, tanker or other vessel.\n (2) Qualified biodiesel and non-highway diesel motor fuel sold by a\nperson registered under article twelve-A of this chapter as a\ndistributor of diesel motor fuel to a person registered under such\narticle twelve-A as a distributor of diesel motor fuel where such sale\nis not a retail sale or a sale that involves a delivery at a filling\nstation or into a repository equipped with a hose or other apparatus by\nwhich such qualified biodiesel or non-highway diesel motor fuel can be\ndispensed into the fuel tank of a motor vehicle.\n (3) Residual petroleum product sold by a person registered under this\narticle as a residual petroleum product business to a person registered\nunder this article as a residual petroleum product business where such\nsale is not a retail sale. Provided, however, that the commissioner may\nrequire such documentary proof to qualify for any exemption provided in\nthis section as the commissioner deems appropriate, including the\nexpansion of any certifications required pursuant to section two hundred\neighty-five-a or two hundred eighty-five-b of this chapter to cover the\ntaxes imposed by this article.\n (4) "Qualified biodiesel" means such term as defined in subdivision\ntwenty-three of section two hundred eighty-two of this chapter.\n (f) Utilities. (1) Residual petroleum product and non-highway diesel\nmotor fuel sold to an electric corporation, as described in subdivision\n(a) of section three hundred one-d of this article, which is registered\nwith the department as a petroleum business tax direct pay permittee,\nand used by such electric corporation to fuel generators for the purpose\nof manufacturing or producing electricity where such electric\ncorporation provides a copy of a direct pay permit authorized and issued\nby the commissioner, to the petroleum business making such sale. If so\nregistered, such corporation shall be a taxpayer under this article and\n(i) such electric corporation shall file a return monthly and pay the\napplicable tax under this article, after the application of allowable\ncredits, on all such purchases directly to the commissioner, (ii) such\nelectric corporation shall be subject to all of the provisions of this\narticle relating to the responsibilities and liabilities of taxpayers\nunder this article with respect to such residual petroleum product and\nnon-highway diesel motor fuel.\n (2) If a direct payment permit is granted, its use shall be subject to\nconditions specified by the commissioner and the payment of tax on all\nproduct purchased pursuant to the permit shall be made directly to the\ncommissioner by the permit holder. The commissioner may suspend or\ncancel a direct payment permit for any of the grounds for suspending or\ncancelling a registration pursuant to section three hundred two of this\narticle and the notice and hearing provisions applicable under such\nsection three hundred two of this article shall apply to the suspension\nand cancellation of direct payment permits.\n (3) A sale to an electric corporation authorized to issue direct\npayment permits which furnishes a direct payment permit in proper form\nshall, with respect to the seller, not be subject to tax under this\narticle unless such electric corporation's direct payment permit has\nbeen suspended or cancelled by the commissioner and the commissioner has\nprovided petroleum businesses with information identifying persons whose\ndirect payment permits have been suspended or cancelled or such seller\nhas been provided information that the purchaser's direct payment permit\nhas been cancelled or suspended. Where a seller accepts a direct payment\npermit from a person whose direct payment permit has been suspended or\ncancelled, and the commissioner has provided petroleum businesses with\ninformation identifying those persons whose direct payment permits have\nbeen suspended or cancelled or where the seller has been provided\ninformation that the purchaser's direct payment permit has been\nsuspended or cancelled, such sale shall be subject to tax at the full\napplicable rate.\n (g) Sales or uses of non-highway diesel motor fuel and residual\npetroleum product for farm production. Non-highway Diesel motor fuel or\nresidual petroleum product sold to or used by a consumer who purchases\nor uses such non-highway Diesel motor fuel or product for use or\nconsumption directly and exclusively in the production for sale of\ntangible personal property by farming, but only if all such non-highway\nDiesel motor fuel or product is delivered on the farm site and is\nconsumed other than on the public highways of this state (except for the\nuse of the public highway to reach adjacent farmlands).\n (h) Exemption for certain not-for-profit organizations. There shall be\nexempt from the measure of the petroleum business tax imposed by section\nthree hundred one-a of this article a sale or use of residual petroleum\nproduct, or non-highway diesel motor fuel to or by an organization which\nhas qualified under paragraph four or five of subdivision (a) of section\neleven hundred sixteen of this chapter where such non-highway diesel\nmotor fuel or residual petroleum product is exclusively for use and\nconsumption by such organization, but only if all of such non-highway\ndiesel motor fuel or product is consumed other than on the public\nhighways of this state. Provided, however, this exemption shall in no\nevent apply to a sale of non-highway diesel motor fuel which involves a\ndelivery at a filling station or into a repository which is equipped\nwith a hose or other apparatus by which such non-highway Diesel motor\nfuel can be dispensed into the fuel tank of a motor vehicle and all\ndeliveries hereunder shall be made to the premises occupied by the\nqualifying organization and used by such organization in furtherance of\nthe exempt purposes of such organization. Provided, however, that the\ncommissioner shall require such documentary proof to qualify for any\nexemption provided herein as the commissioner deems appropriate.\nProvided, further, the distributor selling such non-highway Diesel motor\nfuel and product shall separately report on its return the gallonage\nsold during the reporting period exempt from tax under the provisions of\nthis subdivision and provide such other information with respect to such\nsales as the commissioner deems appropriate to prevent evasion.\n (i) Exemption for passenger commuter ferries. A use by a passenger\ncommuter ferry of non-highway diesel motor fuel or residual petroleum\nproduct where such non-highway diesel motor fuel or residual petroleum\nproduct was used and consumed by a passenger commuter ferry exclusively\nin providing mass transportation service. Provided, that the\ncommissioner shall require such documentary proof to qualify for any\nexemption provided hereunder as the commissioner deems appropriate.\n (j) Exemption for tugboats and towboats. The use by a tugboat or\ntowboat of motor fuel, diesel motor fuel, or residual petroleum product.\nProvided, that the commissioner shall require such documentary proof to\nqualify for any exemption provided hereunder as the commissioner deems\nappropriate.\n