Provides motor fuel tax exemption for sales of Diesel motor fuel made to commercial fishermen

Summary of specific provisions

This bill amends the Tax Law in order to eliminate the statute that requires the payment and subsequent refund of the eight cent diesel excise tax and the sales tax on diesel fuel when sold to operators of commercial fishing vessels. Under the current law, both taxes must be paid by commercial fishermen, notwithstanding their exempt status from these taxes. The commercial fishermen are then allowed to file for a refund of these taxes from the Department of Taxa- tion and Finance.

The Tax Law is further amended to grant an exemption from the petroleum business tax, and sales and compensating use taxes, for fuel used in vessels providing sport fishing opportunities for hire to the general. public.

Justification

The original intent of this policy, as it relates to 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 as commercial fishermen and their fuel distributors.

The implementation of this law has caused a great deal of hardship for commercial fishermen. A fisherman, operating a trawler vessel burning 85,000 gallons per year, must advance approximately $13,600 annually in taxes to the State. The negative financial consequences of this cash flow are a large burden for the commercial fishermen of this state.

The negative impacts of this law have also been carried over to the fuel distributors of the commercial fishermen. Because of the payment requirement, many fishermen 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 commercial fishermen to pay any excise or state sales taxes for the purchase of diesel motor fuel.

This legislation would also 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.

Prior legislative history

2007-08: A.989;Held for Consideration in Ways and Means 2005-06: A.3854; Referred to Ways & Means 2003-04, A.1416; Held for Consideration in Ways & Means 2001-02, A.2289; Held for Consideration in Ways & Means 1999-00, A.2840A; Held for Consideration in Ways & Means 1997-98: A.28403; Held for Consideration in Ways & Means

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, 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 115 of the tax law 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 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, eight, nine, ten and eleven of this act shall take effect Tune 1, 2011; 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 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 ten of this act shall take effect.