senate Bill S7145

2011-2012 Legislative Session

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

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
May 31, 2012 reported and committed to finance
May 01, 2012 referred to investigations and government operations

Votes

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May 31, 2012 - Investigations and Government Operations committee Vote

S7145
5
0
committee
5
Aye
0
Nay
2
Aye with Reservations
0
Absent
1
Excused
0
Abstained
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Investigations and Government Operations Committee Vote: May 31, 2012

aye wr (2)
excused (1)

S7145 - Bill Details

See Assembly Version of this Bill:
A9999
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd ยงยง300, 301-a, 301-c, 1115 & 1210, Tax L
Versions Introduced in Previous Legislative Sessions:
2011-2012: A7271
2009-2010: A1903A, S6879

S7145 - Bill Texts

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

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BILL NUMBER:S7145

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

PURPOSE OR GENERAL IDEA OF BILL:
Provides motor fuel tax exemption for sales of diesel motor fuel used in
vessels used directly in a business providing sport fishing opportu-
nities.

SUMMARY OF SPECIFIC PROVISIONS:
This legislation amends the Tax Law to provide a full exemption from
both the petroleum business tax and sales and compensating use tax for
charter boats used directly and predominantly in a business providing
sport fishing opportunities for hire to the general public.

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

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

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

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

PRIOR LEGISLATIVE HISTORY:
New Legislation, 2012.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:

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 sections one, two, four, five and six of
this act shall take effect June 1, 2012; provided, further, that the
amendments to the opening paragraph of Section 301-c of the Tax Law,
made by section four of this act shall not affect the expiration and
repeal of such paragraph pursuant to Section 19 of part W-1 of Chapter
109 of the laws of 2006, as amended, and shall expire and be deemed
repealed therewith, when upon such date the provisions of section five
of this act shall take effect.

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

    S. 7145                                                  A. 9999

                      S E N A T E - A S S E M B L Y

                               May 1, 2012
                               ___________

IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
  ed,  and  when  printed  to  be committed to the Committee on Investi-
  gations and Government Operations

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

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

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.    Section  300  of the tax law is amended by adding a new
subdivision (j-1) to read as follows:
  (J-1) "COMMERCIAL SPORT FISHING VESSEL" MEANS  A  VESSEL  OWNED  BY  A
PERSON  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  2.  Paragraph 2 of subdivision (b) of section 301-a of the tax law,
as added by section 154 of part A of chapter 389 of the laws of 1997, is
amended to read as follows:
  (2) Motor fuel brought into this state in  the  fuel  tank  connecting
with  the  engine  of  a  vessel propelled by the use of such motor fuel
shall be deemed to constitute a  taxable  use  of  motor  fuel  for  the
purposes  of this subdivision to the extent that the fuel is consumed in
the operation of the vessel in this state. Provided, however, that  this
paragraph  shall  not  apply  to  (i)  a recreational motor boat or (ii)
subsequent to  August  thirty-first,  nineteen  hundred  ninety-four,  a
commercial  fishing  vessel  (as  defined  in subdivision (j) of section
three hundred of this article) if the motor fuel imported  and  consumed
in  this state is used to operate such vessel while it is engaged in the
harvesting of fish for sale OR (III) A COMMERCIAL SPORT FISHING  VESSEL,
IF  SUCH VESSEL PROVIDES ITS OWNER WITH AT LEAST FIFTY PERCENT OF HIS OR
HER TOTAL ANNUAL INCOME.   Provided, further,  that  tax  liability  for

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15506-01-2

S. 7145                             2                            A. 9999

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 3. Subparagraph (B) of paragraph 1 of  subdivision  (c)  of  section
301-a  of  the tax law, as amended by section 19 of part K of chapter 61
of the laws of 2011, is amended to read as follows:
  (B) Highway diesel motor fuel brought into this state in the fuel tank
connecting with the engine of a vessel propelled  by  the  use  of  such
diesel  motor fuel shall be deemed to constitute a taxable use of diesel
motor fuel for the purpose of this paragraph to the extent of  the  fuel
that is consumed in the operation of the vessel in this state. Provided,
however, this paragraph shall not apply to (i) a recreational motor boat
or  (ii)  a  commercial fishing vessel (as defined in subdivision (j) of
section three hundred of this article) if the highway diesel motor  fuel
imported into and consumed in this state is used to operate such commer-
cial  fishing  vessel  while it is engaged in the harvesting of fish for
sale OR (III) A COMMERCIAL SPORT FISHING VESSEL, IF SUCH VESSEL PROVIDES
ITS OWNER WITH AT LEAST FIFTY PERCENT OF HIS OR HER TOTAL ANNUAL INCOME.
Provided, further, that  tax  liability  for  gallonage  that  a  vessel
consumes  in  this  state shall be the tax liability with respect to the
positive difference between the gallonage consumed in this state  during
the  reporting  period  and  the gallonage purchased in this state (upon
which the tax imposed by this section has been paid) during such period.
A credit or refund shall be available for any excess  of  tax  liability
for gallonage purchased in this state during the period over tax liabil-
ity  on  gallonage  so  consumed in this state during such period, which
excess shall be presumed to have been used outside this state.
  S 4. 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 5. 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  6. Section 301-c of the tax law is amended by adding a new subdivi-
sion (g-1) to read as follows:
  (G-1) DIESEL MOTOR FUEL AND  MOTOR  FUEL  USED  IN  THE  OPERATION  OF
COMMERCIAL  SPORT  FISHING  VESSELS.  DIESEL  MOTOR  FUEL  OR MOTOR FUEL
PURCHASED IN THIS STATE BY THE OPERATOR OF A  COMMERCIAL  SPORT  FISHING

S. 7145                             3                            A. 9999

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 7. Subdivision (a) of section 1115 of the  tax  law  is  amended  by
adding a new paragraph 24-a to read as follows:
  (24-A) FUEL USED IN VESSELS USED DIRECTLY AND PREDOMINANTLY IN A BUSI-
NESS  PROVIDING  SPORT  FISHING  OPPORTUNITIES  FOR  HIRE TO THE GENERAL
PUBLIC; PROVIDED THAT SUCH VESSEL PROVIDES ITS OWNER WITH AT LEAST FIFTY
PERCENT OF HIS OR HER TOTAL ANNUAL INCOME.
  S 8. 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
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  9.  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

S. 7145                             4                            A. 9999

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  10.    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 sections one, two, four, five and
six of this act shall take effect June 1, 2012; provided, further,  that
the amendments to the opening paragraph of section 301-c of the tax law,
made  by  section  four  of this act shall not affect the expiration and
repeal of such paragraph pursuant to section 19 of part W-1  of  chapter
109  of  the  laws  of  2006, as amended, and shall expire and be deemed
repealed therewith, when upon such date the provisions of  section  five
of this act shall take effect.

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