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

BILL NUMBER:S1766A

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

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

Summary of provisions

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 opportunities for hire to the general public.

Legislative history

2012: A.9999/S.7145

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately and shall be deemed to have been in full force and effect on and after January 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.