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This entry was published on 2021-04-23
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SECTION 1102
Prepayment of sales tax on motor fuel and diesel motor fuel
Tax (TAX) CHAPTER 60, ARTICLE 28, PART 1
§ 1102. Prepayment of sales tax on motor fuel and diesel motor fuel.
(a) * (1) Every distributor of motor fuel shall pay, as a prepayment on
account of the taxes imposed by this article and pursuant to the
authority of article twenty-nine of this chapter, a tax on each gallon
of motor fuel (i) which he imports or causes to be imported into this
state for use, distribution, storage or sale in the state or produces,
refines, manufactures or compounds in this state or (ii) if the tax has
not been imposed prior to its sale in this state, which he sells (which
acts shall in regard to motor fuel hereinafter in this article be
encompassed by the phrase "imported, manufactured or sold"), except when
imported, manufactured or sold under circumstances which preclude the
collection of such tax by reason of the United States constitution and
of the laws of the United States enacted pursuant thereto or when
imported or manufactured by an organization described in paragraph one
or two of subdivision (a) of section eleven hundred sixteen of this
article or a hospital included in the organizations described in
paragraph four of such subdivision for its own use and consumption and
except kero-jet fuel when imported by an airline for use in its
airplanes, and except CNG, and except hydrogen, and except E85 when
delivered to a filling station and placed in a storage tank of such
filling station for such E85 to be dispensed directly into a motor
vehicle for use in the operation of such vehicle, and except aviation
gasoline sold for use in commercial aircraft and general aviation
aircraft.

* NB Effective until September 1, 2026

* (1) Every distributor of motor fuel shall pay, as a prepayment on
account of the taxes imposed by this article and pursuant to the
authority of article twenty-nine of this chapter, a tax on each gallon
of motor fuel (i) which he imports or causes to be imported into this
state for use, distribution, storage or sale in the state or produces,
refines, manufactures or compounds in this state or (ii) if the tax has
not been imposed prior to its sale in this state, which he sells (which
acts shall in regard to motor fuel hereinafter in this article be
encompassed by the phrase "imported, manufactured or sold"), except when
imported, manufactured or sold under circumstances which preclude the
collection of such tax by reason of the United States constitution and
of the laws of the United States enacted pursuant thereto or when
imported or manufactured by an organization described in paragraph one
or two of subdivision (a) of section eleven hundred sixteen of this
article or a hospital included in the organizations described in
paragraph four of such subdivision for its own use and consumption and
except kero-jet fuel when imported by an airline for use in its
airplanes, and except aviation gasoline sold for use in commercial
aircraft and general aviation aircraft.

* NB Effective September 1, 2026

* (2) Every distributor of diesel motor fuel shall pay, as a
prepayment on account of the taxes imposed by this article and pursuant
to the authority of article twenty-nine of this chapter, a tax upon the
sale or use of diesel motor fuel in this state. The tax shall be
computed based upon the number of gallons of diesel motor fuel sold or
used. Provided, however, if the tax has not been imposed prior thereto,
it shall be imposed on the removal of highway diesel motor fuel from a
terminal, other than by pipeline, barge, tanker or other vessel, or the
delivery of diesel motor fuel to a retail service station. The
collection of such tax shall not be made applicable to the sale or use
of diesel motor fuel under circumstances which preclude the collection
of such tax by reason of the United States constitution and of laws of
the United States enacted pursuant thereto. The prepaid tax on diesel
motor fuel shall not apply to (i) the sale of non-highway Diesel motor
fuel to a person registered as a distributor of Diesel motor fuel other
than a sale to such person 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; (ii) 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 to the sale of CNG or hydrogen; (iii) the sale of previously
untaxed qualified biodiesel, as defined in subdivision twenty-three of
section two hundred eighty-two of this chapter, to a person registered
under article twelve-A of this chapter as a distributor of Diesel motor
fuel other than (A) a retail sale to such person or (B) a sale to such
person which involves a delivery at a filling station or into a
repository which is equipped with a hose or other apparatus by which
such qualified biodiesel can be dispensed into the fuel tank of a motor
vehicle; or (iv) the sale of previously untaxed highway diesel motor
fuel by a person registered under article twelve-A of this chapter as a
distributor of diesel motor fuel to a person registered under such
article twelve-A as a distributor of diesel motor fuel where the highway
diesel motor fuel is either: (A) being delivered by pipeline, railcar,
barge, tanker or other vessel to a terminal, the operator of which
terminal is registered under section two hundred eighty-three-b of this
chapter, or (B) within such a terminal where it has been so delivered.
Provided, however, that the exemption set forth in this subparagraph
shall not apply to any highway diesel motor fuel if it is removed from a
terminal, other than by pipeline, barge, tanker or other vessel.

* NB Effective until September 1, 2026

* (2) Every distributor of diesel motor fuel shall pay, as a
prepayment on account of the taxes imposed by this article and pursuant
to the authority of article twenty-nine of this chapter, a tax upon the
sale or use of diesel motor fuel in this state. The tax shall be
computed based upon the number of gallons of diesel motor fuel sold or
used. Provided, however, if the tax has not been imposed prior thereto,
it shall be imposed on the removal of highway diesel motor fuel from a
terminal, other than by pipeline, barge, tanker or other vessel, or the
delivery of diesel motor fuel to a retail service station. The
collection of such tax shall not be made applicable to the sale or use
of diesel motor fuel under circumstances which preclude the collection
of such tax by reason of the United States constitution and of laws of
the United States enacted pursuant thereto. The prepaid tax on diesel
motor fuel shall not apply to (i) the sale of non-highway Diesel motor
fuel to a person registered as a distributor of Diesel motor fuel other
than a sale to such person 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; (ii) 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; (iii) the sale of previously untaxed qualified biodiesel, as
defined in subdivision twenty-three of section two hundred eighty-two of
this chapter to a person registered under article twelve-A of this
chapter as a distributor of Diesel motor fuel other than (A) a retail
sale to such person or (B) a sale to such person which involves a
delivery at a filling station or into a repository which is equipped
with a hose or other apparatus by which such qualified biodiesel can be
dispensed into the fuel tank of a motor vehicle; or (iv) the sale of
previously untaxed highway diesel motor fuel by a person registered
under article twelve-A of this chapter as a distributor of diesel motor
fuel to a person registered under such article twelve-A as a distributor
of diesel motor fuel where the highway diesel motor fuel is either: (A)
being delivered by pipeline, railcar, barge, tanker or other vessel to a
terminal, the operator of which terminal is registered under section two
hundred eighty-three-b of this chapter, or (B) within such a terminal
where it has been so delivered. Provided, however, that the exemption
set forth in this subparagraph shall not apply to any highway diesel
motor fuel once it is removed from a terminal, other than by pipeline,
barge, tanker or other vessel.

* NB Effective September 1, 2026

(3) The amount of such prepayment per gallon shall be computed
pursuant to the provisions of subdivision (e) of section eleven hundred
eleven of this article. Provided, further, no motor fuel or diesel motor
fuel shall be included in the measure of the tax under clause (i) of
paragraph one and paragraph two of this subdivision unless it shall have
previously come to rest within the meaning of federal decisional law
interpreting the United States constitution.

(b) The taxes required to be prepaid pursuant to this section shall be
administered and collected in a like manner as the taxes imposed by
sections eleven hundred five and eleven hundred ten of this article. All
the provisions of this article relating to or applicable to the
administration, collection and disposition of the taxes imposed by such
sections shall apply to the tax required to be prepaid under this
section so far as such provisions can be made applicable to such
prepayments of tax with such limitations as set forth in this article
and such modifications as may be necessary in order to adapt such
language to the tax so imposed, provided, however, that the provisions
of paragraph one of subdivision (c) of section eleven hundred
thirty-seven of this article and the reference in section eleven hundred
thirty-seven-A of this article to such paragraph one of subdivision (c)
of section eleven hundred thirty-seven shall not be applicable to such
tax required to be prepaid under this section. Such provisions shall
apply with the same force and effect as if the language of those
provisions had been set forth in full in this section except to the
extent that any provision is either inconsistent with a provision of
this section or is not relevant to the tax required to be prepaid by
this section. For purposes of this section, any reference in this
article to the tax or taxes imposed by this article shall be deemed to
refer to the tax required to be prepaid pursuant to this section unless
a different meaning is clearly required. Provided, further, that, except
as otherwise provided in subdivision (j) of section eleven hundred
fifteen of this article and except as otherwise provided in paragraph
five of subdivision (b) of section eleven hundred sixteen of this
article, the exemptions provided in such sections (other than that
provided in paragraph nine of subdivision (a) of such section eleven
hundred fifteen with respect to purchases of kero-jet fuel) shall not
apply to the tax required to be prepaid under this section.

(c) Nothing in this article shall be construed to require the payment
of the tax required to be prepaid pursuant to this section more than
once upon motor fuel or diesel motor fuel sold within the state. When
the foregoing prepaid tax imposed pursuant to this section is paid it
shall have been so paid on account of the taxes imposed by this article
or pursuant to the authority of article twenty-nine of this chapter with
respect to the retail sale or use of motor fuel or diesel motor fuel.
Nothing in this section shall modify or affect the taxes imposed by
sections eleven hundred five and eleven hundred ten of this article as
applied to receipts from the sale or use of such fuel.

(d) Deposit and disposition of revenue. (1) Consistent with sections
eleven hundred forty-eight and twelve hundred sixty-one of this chapter,
the taxes imposed pursuant to this section and interest and penalties
thereon received by the commissioner, after deducting the amount which
the commissioner of taxation and finance or his delegate shall determine
to be necessary for reasonable costs of the commissioner in
administering, collecting and distributing such taxes, shall be
deposited daily with such responsible banks, banking houses or trust
companies, as may be designated by the comptroller, to the credit of the
comptroller. Of the total revenue collected or received under this
section, the comptroller shall retain in his hands such amount as the
commissioner of taxation and finance may determine to be necessary for
refunds under this article and pursuant to the authority of article
twenty-nine of this chapter.

(2) On or before the twelfth day of each month, after reserving such
amount for such refunds and such costs, the commissioner or the
commissioner's delegate shall certify to the comptroller the amount of
all revenues so received during the prior month as a result of the
taxes, interest and penalties so imposed and, in addition, on or before
the last day of June and December the commissioner or delegate shall
certify the amount of such moneys received during and including the
first twenty-five days of said months. At the time the commissioner
prepares such certification, the commissioner or the commissioner's
delegate shall determine the receipts attributable to the amount, and
number of gallons, of motor fuel and diesel motor fuel sold at retail in
each county and city and in the metropolitan commuter transportation
district subject to the taxes imposed by sections eleven hundred five
and eleven hundred ten of this article and the like taxes imposed
pursuant to the authority of article twenty-nine of this chapter and the
commissioner or delegate shall certify the portion of such receipts and
gallons from the total payments that represents the prepaid tax on
account of the taxes imposed by this article and pursuant to the
authority of article twenty-nine of this chapter (determined without
regard to the taxes imposed by this section and any like taxes imposed
pursuant to the authority of article twenty-nine of this chapter) based
upon the retail sales or uses of such fuel in such jurisdiction or
district. The amount of revenues so certified shall be deposited and
distributed by the comptroller in accordance therewith. Where the amount
so certified in any distribution is more or less than the amount due,
the amount of the overpayment or underpayment shall be determined as
soon after the discovery of the overpayment or underpayment as is
reasonably possible and subsequent certifications to the comptroller
shall be adjusted by subtracting the amount of any such overpayment from
or by adding the amount of any such underpayment to such number of
subsequent payments as the comptroller and the commissioner shall
consider reasonable in view of the amount of the overpayment or
underpayment and all other pertinent facts and circumstances.

(e) For the purposes of this section and article twelve-A of this
chapter the term "use" shall mean, in addition to the meaning set forth
in paragraph seven of subdivision (b) of section eleven hundred one of
this article, the exercise of any right or power over motor fuel or
diesel motor fuel by any person, whether or not a purchaser, including,
but not limited to, the receiving, the withdrawal from storage or any
consumption of such fuel.

(f) Every wholesaler of motor fuel, as such term is defined by
subdivision twenty-seven of section two hundred eighty-two of this
chapter, shall pay or be entitled to a credit or refund of the tax
imposed by this section on gallons of motor fuel under the circumstances
set forth in paragraph three of subdivision (e) of section eleven
hundred eleven of this article.