S T A T E   O F   N E W   Y O R K
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                                  7271

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                             April 27, 2011
                               ___________

Introduced  by  M. of A. THIELE, MURRAY -- read once and referred to the
  Committee on Ways and Means

AN ACT to amend the tax law, in relation to providing an exemption  from
  the  payment  of  the motor fuels tax and the sales tax on motor fuels
  used in the operation of commercial fishing vessels; and 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.  Paragraph (b) of subdivision 3 of section 282-a of the tax
law,  as  amended  by  section  5 of part K of chapter 61 of the laws of
2011, is amended to read as follows:
  (b) The tax on the incidence of sale or use imposed by subdivision one
of this section shall not apply to: (i) the sale or use  of  non-highway
Diesel  motor  fuel, but only if all of such fuel is consumed other than
on the public highways of this state (except for the use of  the  public
highway by farmers to reach adjacent farmlands); provided, however, this
exemption  shall in no event apply to a sale of non-highway Diesel motor
fuel which involves a delivery at a filling station or into a repository
which is equipped with a hose or other apparatus by which such fuel  can
be  dispensed into the fuel tank of a motor vehicle (except for delivery
at a farm site which qualifies for the exemption under  subdivision  (g)
of  section  three hundred one-b of this chapter); or (ii) a sale to the
consumer consisting of not more than twenty gallons of water-white kero-
sene to be used and consumed exclusively for heating purposes; or  (iii)
the  sale  to or delivery at a filling station or other retail vendor of
water-white kerosene provided  such  filling  station  or  other  retail
vendor  only  sells  such  water-white  kerosene exclusively for heating
purposes in containers of no more than twenty gallons; or (iv) a sale of

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10686-02-1
              

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kero-jet fuel to an airline for use in its airplanes or a use  of  kero-
jet  fuel by an airline in its airplanes; or (v) a sale of kero-jet fuel
by a registered distributor of Diesel motor fuel to a fixed base  opera-
tor registered under this article as a distributor of kero-jet fuel only
where  such  fixed base operator is engaged solely in making or offering
to make retail sales not in bulk of kero-jet fuel directly into the fuel
tank of an airplane for the purpose of operating such airplane; or  (vi)
a  retail  sale  not  in  bulk of kero-jet fuel by a fixed base operator
registered under this article as a distributor  of  kero-jet  fuel  only
where  such fuel is delivered directly into the fuel tank of an airplane
for use in the operation of such airplane; OR (VII)  A  SALE  OF  DIESEL
MOTOR  FUEL  TO  A  "COMMERCIAL  FISHERMAN",  AS SUCH TERM IS DEFINED IN
SUBDIVISION (I) OF SECTION THREE HUNDRED  OF  THIS  CHAPTER,  AT  RETAIL
UNDER THE CIRCUMSTANCES SET FORTH IN PARAGRAPH ONE OF SUBDIVISION (G) OF
SECTION  THREE  HUNDRED ONE-C OF THIS CHAPTER, AND WHERE SUCH COMMERCIAL
FISHING VESSEL IS OPERATED BY A COMMERCIAL FISHERMAN.
  S 2. Subdivision 4 of section 282-a of the  tax  law,  as  amended  by
section  5  of  part  K of chapter 61 of the laws of 2011, is amended to
read as follows:
  4. The tax imposed by this section  on  Diesel  motor  fuel  shall  be
passed  through  by the seller and included as part of the selling price
to each purchaser of such fuel. Provided, however, the amount of the tax
imposed by this section may be excluded from the selling price of Diesel
motor fuel where (i) a sale of Diesel motor fuel is made to an organiza-
tion described in paragraph (a) of subdivision  three  of  this  section
solely for the purpose stated therein; (ii) a sale of non-highway Diesel
motor  fuel  is  made  to a consumer but only if such non-highway Diesel
motor fuel is not delivered to a filling station, nor delivered  into  a
storage  tank  which is equipped with a hose or other apparatus by which
such fuel can be dispensed into the fuel tank of  a  motor  vehicle;  or
(iii)  the  sale  to  or  delivery  at a filling station or other retail
vendor of water-white kerosene provided such filling  station  or  other
retail vendor only sells such water-white kerosene exclusively for heat-
ing  purposes  in  containers  of no more than twenty gallons; or (iv) a
sale of kero-jet fuel is made to an airline for use in its airplanes; OR
(V) A SALE OF DIESEL MOTOR FUEL IS MADE TO A "COMMERCIAL FISHERMAN",  AS
SUCH TERM IS DEFINED IN SUBDIVISION (I) OF SECTION THREE HUNDRED OF THIS
CHAPTER, AT RETAIL UNDER THE CIRCUMSTANCES SET FORTH IN PARAGRAPH ONE OF
SUBDIVISION  (G)  OF  SECTION  THREE  HUNDRED ONE-C OF THIS CHAPTER, AND
WHERE SUCH COMMERCIAL FISHING VESSEL IS OPERATED BY A COMMERCIAL FISHER-
MAN.
  S 3. Section 301-b of the tax law is amended by adding a new  subdivi-
sion (k) to read as follows:
  (K)  SALES OR USES OF DIESEL MOTOR FUEL AND RESIDUAL PETROLEUM PRODUCT
FOR COMMERCIAL FISHING. DIESEL MOTOR FUEL OR RESIDUAL PETROLEUM  PRODUCT
SOLD  TO OR USED BY A "COMMERCIAL FISHERMAN", AS SUCH TERM IS DEFINED IN
SUBDIVISION (I) OF SECTION THREE HUNDRED  OF  THIS  ARTICLE,  AT  RETAIL
UNDER THE CIRCUMSTANCES SET FORTH IN PARAGRAPH ONE OF SUBDIVISION (G) OF
SECTION  THREE  HUNDRED ONE-C OF THIS ARTICLE, AND WHERE SUCH COMMERCIAL
FISHING VESSEL IS OPERATED BY A COMMERCIAL FISHERMAN.
  S 4. Subdivision (j) of section 1115 of the tax  law,  as  amended  by
section  41  of  part K of chapter 61 of the laws of 2011, is amended to
read as follows:
  (j) The exemptions provided in this section shall not apply to the tax
required to be prepaid pursuant to  the  provisions  of  section  eleven
hundred  two of this article nor to the taxes imposed by sections eleven

A. 7271                             3

hundred five and eleven hundred ten of  this  article  with  respect  to
receipts  from sales and uses of motor fuel or diesel motor fuel, except
that the exemptions provided in paragraphs nine and forty-two of  subdi-
vision (a) of this section shall apply to the tax required to be prepaid
pursuant to the provisions of section eleven hundred two of this article
and  to  the  taxes  imposed  by sections eleven hundred five and eleven
hundred ten of this article with respect to sales and uses  of  kero-jet
fuel,  CNG,  hydrogen  and E85, provided, however, the exemption allowed
for E85 shall be subject to  the  additional  requirements  provided  in
section  eleven  hundred  two  of  this  article with respect to E85 AND
EXCEPT THAT THE EXEMPTION PROVIDED IN PARAGRAPH TWENTY-FOUR OF  SUBDIVI-
SION  (A)  OF  THIS SECTION SHALL APPLY TO THE TAXES IMPOSED BY SECTIONS
ELEVEN HUNDRED FIVE AND ELEVEN HUNDRED TEN OF THIS ARTICLE WITH  RESPECT
TO  SALES AND USES OF DIESEL MOTOR FUEL USED IN THE OPERATION OF A FISH-
ING VESSEL AS DESCRIBED IN PARAGRAPH TWENTY-FOUR OF SUBDIVISION  (A)  OF
THIS SECTION.  The exemption provided in subdivision (c) of this section
shall  apply to sales and uses of non-highway diesel motor fuel but only
if all of such fuel is consumed other than on  the  public  highways  of
this  state.   The exemption provided in subdivision (c) of this section
shall apply to sales and uses of non-highway diesel motor fuel  for  use
or  consumption  either  in the production for sale of tangible personal
property by farming or in a commercial horse boarding operation,  or  in
both  but  only if all of such fuel is consumed other than on the public
highways of this state (except for the use of  the  public  highways  to
reach  adjacent  farmlands  or adjacent lands used in a commercial horse
boarding operation, or both).
  S 5. Subdivision (j) of section 1115 of the tax  law,  as  amended  by
section  41-a of part K of chapter 61 of the laws of 2011, is amended to
read as follows:
  (j) The exemptions provided in this section shall not apply to the tax
required to be prepaid pursuant to  the  provisions  of  section  eleven
hundred  two of this article nor to the taxes imposed by sections eleven
hundred five and eleven hundred ten of  this  article  with  respect  to
receipts  from sales and uses of motor fuel or diesel motor fuel, except
that the exemption provided in paragraph nine of subdivision (a) of this
section shall apply to the tax required to be prepaid  pursuant  to  the
provisions  of  section  eleven  hundred  two of this article and to the
taxes imposed by sections eleven hundred five and eleven hundred ten  of
this  article with respect to sales and uses of kero-jet fuel AND EXCEPT
THAT THE EXEMPTION PROVIDED IN PARAGRAPH TWENTY-FOUR OF SUBDIVISION  (A)
OF  THIS  SECTION  SHALL  APPLY  TO THE TAXES IMPOSED BY SECTIONS ELEVEN
HUNDRED FIVE AND ELEVEN HUNDRED TEN OF  THIS  ARTICLE  WITH  RESPECT  TO
SALES  AND  USES OF DIESEL MOTOR FUEL USED IN THE OPERATION OF A FISHING
VESSEL AS DESCRIBED IN PARAGRAPH TWENTY-FOUR OF SUBDIVISION (A) OF  THIS
SECTION.    The  exemption  provided  in subdivision (c) of this section
shall apply to sales and uses of non-highway diesel motor fuel but  only
if  all  of  such  fuel is consumed other than on the public highways of
this state. The exemption provided in subdivision (c)  of  this  section
shall  apply  to sales and uses of non-highway diesel motor fuel for use
or consumption either in the production for sale  of  tangible  personal
property  by  farming or in a commercial horse boarding operation, or in
both but only if all of such fuel is consumed other than on  the  public
highways  of  this  state  (except for the use of the public highways to
reach adjacent farmlands or adjacent lands used in  a  commercial  horse
boarding operation, or both).

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  S 6. 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 DOMICILED IN THIS STATE, WHO HAS BEEN ISSUED AND HOLDS  A  MARINE
AND  COASTAL DISTRICT PARTY AND CHARTER BOAT LICENSE PURSUANT TO SECTION
13-0336 OF THE ENVIRONMENTAL CONSERVATION LAW.
  S 7. 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
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.
  S  8.  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.

A. 7271                             5

  S 9. The opening paragraph of section 301-c of the tax law, as amended
by  section 5 of part W-1 of chapter 109 of the laws of 2006, 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) or (m) of this section, which gallo-
nage has been included in the measure of the tax imposed by this article
on a petroleum business:
  S  10.  The  opening  paragraph  of  section  301-c of the tax law, as
amended by chapter 468 of the laws  of  2000,  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) or (m) of this section,  which  gallonage
has been included in the measure of the tax imposed by this article on a
petroleum business:
  S 11. 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
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.
  S  12.  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.
  S  13.  Subparagraph  (i) of paragraph 1 of subdivision (a) of section
1210 of the tax law, as amended by section 3 of part GG of chapter 57 of
the laws of 2010, 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

A. 7271                             6

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,
unless such city, county or school district elects otherwise, shall omit
THE FUEL USED IN COMMERCIAL SPORT FISHING VESSELS EXEMPTION PROVIDED FOR
IN  PARAGRAPH TWENTY-FOUR-A OF SUBDIVISION (A), the provision for credit
or refund contained in clause six of subdivision (a) or subdivision  (d)
of section eleven hundred nineteen of this chapter.
  S  14. Section 1210 of the tax law is amended by adding a new subdivi-
sion (p) to read as follows:
  (P) 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
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 2010) 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.
  S 15.  This act shall take effect on the first  day  of  a  sales  tax
quarterly period, as described in subdivision (b) of section 1136 of the
tax  law, next commencing at least ninety days after this act shall have
become a law, provided, however, that the amendments made  to  paragraph
(b)  of subdivision 3 and subdivision 4, made by sections one and two of
this act, respectively, shall take effect on the same date  and  in  the
same  manner  as  section 5 of part K of chapter 61 of the laws of 2011,
takes effect; and sections four and five of  this  act  shall  apply  to
sales  made under and uses occurring on or after the dates such sections
four and five shall have taken effect, respectively,  although  made  or
occurring under a prior contract, provided that the amendments to subdi-
vision (j) of section 1115 of the tax law made by sections four and five
of this act, respectively, shall take effect on the same date and in the
same  manner  as section 41 of part K of chapter 61 of the laws of 2011,
takes effect; provided further that such amendments made by section four
of this act shall be subject to the expiration  and  reversion  of  such
subdivision  pursuant  to  section  19 of part W-1 of chapter 109 of the

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laws of 2006, as amended, when upon such date the provisions of  section
five  of  this  act  shall take effect; provided, further, that sections
six, seven, nine, ten and eleven of this act shall take effect  June  1,
2011; provided, further, that the amendments made to subparagraph (B) of
paragraph  1  of subdivision (c) of section 301-a of the tax law made by
section eight of this act shall take effect on the same date and in  the
same  manner  as section 19 of part K of chapter 61 of the laws of 2011,
takes effect; provided, further, that  the  amendments  to  the  opening
paragraph  of section 301-c of the tax law, made by section nine of this
act shall not affect the expiration and repeal of such paragraph  pursu-
ant  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 ten of this act shall take effect.