§ 301-a. Imposition of tax. (a) General. Notwithstanding any other provision of this chapter, or of any other law, there is hereby imposed upon every petroleum business for the privilege of engaging in business, doing business, employing capital, owning or leasing property, or maintaining an office in this state, a monthly tax for each or any part of a taxable month equal to the sum of the motor fuel component determined pursuant to subdivision (b) of this section, the highway diesel motor fuel component determined pursuant to paragraph one of subdivision (c) of this section, the non-highway diesel motor fuel component determined pursuant to paragraph two of subdivision (c) of this section and the residual petroleum product component determined pursuant to subdivision (d) of this section.

Ask a legal question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

(b) Motor fuel component. (1) The motor fuel component shall be determined by multiplying the motor fuel and highway diesel motor fuel rate times the number of gallons of (1) motor fuel imported or caused to be imported into this state by the petroleum business for use, distribution, storage or sale in the state or (2) produced, refined, manufactured or compounded in the state by the petroleum business during the month covered by the return under this article. Provided, however, that no motor fuel shall be included in the measure of the tax unless it shall have previously come to rest within the meaning of federal decisional law interpreting the United States constitution, nor shall any motor fuel be included in the measure of the tax imposed by this article more than once.

(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. 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.

(c) (1) Highway Diesel motor fuel component. (A) The highway diesel motor fuel component shall be determined by multiplying the motor fuel and highway diesel motor fuel rate times (1) the number of gallons of highway diesel motor fuel sold or used by a petroleum business in this state during the month covered by the return under this article and (2) with respect to any gallonage which prior thereto has not been included in the measure of the tax imposed by this article, times the number of gallons of highway diesel motor fuel (i) removed from a terminal, other than by pipeline, barge, tanker or other vessel, (ii) delivered to a filling station or, (iii) delivered into the fuel tank connecting with the engine of a motor vehicle for use in the operation thereof, whichever of the latter three events shall be the first to occur. Provided, however, that no highway diesel motor fuel shall be included in the measure of the tax unless it shall have previously come to rest within the meaning of federal decisional law interpreting the United States constitution, nor decisional law, nor shall any highway diesel motor fuel be included in the measure of the tax imposed by this article more than once.

(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 commercial fishing vessel while it is engaged in the harvesting of fish for sale. 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 liability on gallonage so consumed in this state during such period, which excess shall be presumed to have been used outside this state.

(2) Non-highway diesel motor fuel component. The non-highway diesel fuel component shall be determined by multiplying the non-highway diesel motor fuel rate times the number of gallons of non-highway diesel motor fuel sold or used by a petroleum business in this state during the month covered by the return under this section. Provided, however, that no non-highway diesel motor fuel shall be included in the measure of the tax unless it shall have previously come to rest within the meaning of federal decisional law interpreting the United States constitution, nor shall any non-highway diesel motor fuel be included in the measure of the tax imposed by this article more than once.

(d) Residual petroleum product component. The residual petroleum product component shall be determined by multiplying the residual petroleum product rate times the number of gallons of residual petroleum product sold or used in this state by a petroleum business during the month covered by the return under this article. Provided, however, that no residual petroleum product shall be included in the measure of the tax unless it shall have previously come to rest within the meaning of federal decisional law interpreting the United States constitution, nor shall any residual petroleum product be included in the measure of the tax imposed by this article more than once.

(e) Motor fuel and highway diesel motor fuel rate. (1) The basic motor fuel and highway diesel motor fuel rate shall be ten and two-tenths cents per gallon.

(2) Every year as of January first, the motor fuel and highway diesel motor fuel rate then in effect on the immediately preceding December thirty-first shall be adjusted as follows: such rate shall be multiplied by a fraction the numerator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of August of the immediately preceding year and the denominator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of August in the year prior to such immediately preceding year, provided, however, that the adjusted rate shall not increase above or decrease below the rate in effect on the immediately preceding December thirty-first by more than five percent.

(3) Notwithstanding any other provision of this article, the per gallon rate with respect to "railroad diesel" shall be the adjusted motor fuel and highway diesel motor fuel rate under paragraphs one and two of this subdivision minus one and three tenths cents per gallon.

(f) Non-highway diesel motor fuel rate.

(1) The basic non-highway diesel motor fuel rate shall be nine and three-tenths cents per gallon.

(2) Every year as of January first the non-highway diesel motor fuel rate then in effect on the immediately preceding December thirty-first shall be adjusted as follows: Such rate shall be multiplied by a fraction the numerator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of August of the immediately preceding year and the denominator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of August in the year prior to such immediately preceding year, provided, however, that the adjusted rate shall not increase above or decrease below the rate in effect on the immediately preceding December thirty-first by more than five percent.

(3) Notwithstanding any other provision of this article, non-highway diesel motor fuel which is "manufacturing gallonage," as such term is defined in subdivision (m) of section three hundred of this article, shall be exempt from the measure of the non-highway diesel motor fuel component of the tax imposed under this section.

(g) Residual petroleum product rate. (1) The basic residual petroleum product rate shall be four cents per gallon.

(2) Commencing April first, nineteen hundred ninety-one, the residual petroleum product rate shall be the product of the basic rate set forth in paragraph one of this subdivision multiplied by a fraction the numerator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of November, nineteen hundred ninety, and the denominator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of the labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of November, nineteen hundred eighty-nine.

(3) Commencing on the first day of January, nineteen hundred ninety-two, the residual petroleum product rate then in effect on the immediately preceding December thirty-first shall be adjusted as follows: Such rate shall be multiplied by a fraction the numerator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of August, nineteen hundred ninety-one and the denominator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of August, nineteen hundred ninety. Commencing on the first day of January of nineteen hundred ninety-six and every year thereafter, the residual petroleum product rate then in effect on the immediately preceding December thirty-first shall be adjusted as follows: Such rate shall be multiplied by a fraction the numerator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of August of the immediately preceding year and the denominator of which is the sum of the monthly producer price index (unadjusted) published by the bureau of labor statistics of the United States department of labor for the category of commodities designated "refined petroleum products" for the twelve consecutive months ending with the month of August in the year prior to such immediately preceding year, provided, however, that the adjusted rate to take effect on January first, nineteen hundred ninety-six and each January first thereafter shall not increase above or decrease below the rate in effect on the immediately preceding December thirty-first by more than five percent.

(4) Notwithstanding any other provision of this article, commencing January first, nineteen hundred ninety-eight, residual petroleum product which is "manufacturing gallonage," as such term is defined in subdivision (m) of section three hundred of this article, shall be exempt from the measure of the residual petroleum product component of the tax imposed under this section.

(h) Publication and rounding of rate. (1) The commissioner shall cause to be published in the section for miscellaneous notices in the state register, and give other appropriate general notice of, the rate adjustment calculation and the resulting motor fuel and highway diesel motor fuel rate, non-highway diesel motor fuel rate and residual petroleum product rate fixed by this section for the period commencing on January first, two thousand twelve, and for each calendar year thereafter, no later than the immediately preceding first day of December. The calculation and publication of the rates of tax so fixed by provisions of this section shall not be included within paragraph (a) of subdivision two of section one hundred two of the state administrative procedure act relating to the definition of a rule.

(2) The rates determined pursuant to this section shall be rounded to the nearest one-tenth of one cent.

(i) Doing business, etc. Any petroleum business shall not be deemed to be doing business, engaging in business, employing capital, owning or leasing property, or maintaining an office in this state, for the purposes of this article, by reason of (i) the maintenance of cash balances with banks or trust companies in this state, or (ii) the ownership of shares of stock or securities kept in this state, if kept in a safe deposit box, safe, vault or other receptacle rented for the purpose, or if pledged as collateral security, or if deposited with one or more banks or trust companies, or brokers who are members of a recognized security exchange, in safekeeping or custody accounts, or (iii) the taking of any action by any such bank or trust company or broker, which is incidental to the rendering of safekeeping or custodian service to such petroleum business, or (iv) the maintenance of an office in this state by one or more officers or directors of the petroleum business (where such business is a corporation) who are not employees of the petroleum business if such petroleum business otherwise is not engaging in business or doing business in this state, and does not employ capital or own or lease property in this state, or (v) the keeping of books or records of a petroleum business in this state if such books or records are not kept by employees of such petroleum business and such petroleum business does not otherwise engage in business, do business, employ capital, own or lease property or maintain an office in this state, or (vi) any combination of the foregoing activities.

(j) Special provision relating to lack of jurisdiction to tax. Notwithstanding any provision of law to the contrary, if a person shall receive any motor fuel in this state with respect to which this state was without power to impose the tax under this article, and such motor fuel thereafter becomes subject to the taxing power of this state, then the person possessing such motor fuel at such time shall be deemed a petroleum business and be liable for the tax under this article with respect to such motor fuel and shall make the same reports and returns, pay the same tax and be subject to all other provisions of this article relating to petroleum businesses with respect to motor fuel.

(l) Taxes imposed on qualified reservations. In furtherance of the joint administration of the taxes imposed by article twelve-A of this chapter and the taxes imposed by this article, the provisions of section two hundred eighty-four-e of this chapter concerning the sales of motor fuel and Diesel motor fuel on qualified Indian reservations shall apply to the payment and pass-through of the petroleum business tax in the same manner and with the same force and effect as if the provisions of such section had been incorporated in full into this article, except to the extent that any such provision is either inconsistent with a provision of this article or not relevant thereto.

(m) Special rate adjustment for certain vessels. Notwithstanding any provision of this section to the contrary, the use of non-highway diesel motor fuel in the engine of a vessel to propel such vessel shall be subject to tax at the motor fuel and highway diesel motor fuel rate provided for in this section, and shall be subject to the provisions of section three hundred one-j of this article, including the adjustment set forth in paragraph four of subdivision (a) of such section three hundred one-j. A credit or refund shall be available to the extent tax paid on gallonage used to propel any such vessel exceeds the amount of tax due based on the tax rate set forth herein. Provided, however, that the commissioner shall require such documentary proof to qualify for any credit or reimbursement provided hereunder as the commissioner deems appropriate.