N.Y. Comp. Codes R. & Regs. tit. 20 § 561.2

Current through Register Vol. 46, No. 50, December 11, 2024

Section 561.2 - Definitions

Tax Law, §§ 1101(b)(4)(ii), 1111(e)(6)

(a)Automotive fuel.

For the purpose of the prepaid sales tax on motor fuel, automotive fuel means motor fuel as defined in section 282.2 of the Tax Law or diesel motor fuel as defined in section 282.14 of the Tax Law.

(1)

(i)Motor fuel means gasoline, benzol or other product, except kerosene and crude oil, which is suitable for use in the operation of any motor vehicle engine, but if kerosene or crude oil is compounded or mixed with any other product or products, and the resulting compound or mixture is suitable for use in the operation of any such motor vehicle engine, such resulting compound or mixture in its entirety is motor fuel. Motor fuelincludes, but is not limited to, gasoline, benzol, benzene, naphtha, ethanol, methanol, liquefied petroleum gas, compressed natural gas, propane gas, or any combination, or any other product, or combination of products which is suitable for use in the operation of a motor vehicle engine.

(ii) However, any product that is not commonly or commercially known or sold as gasoline or a blend thereof, will not generally be considered to be suitable for use in the operation of a motor vehicle engine until one of the following, whichever is the earliest, takes place.

(a) The product is compounded or otherwise mixed with any other product or products, the result of which is suitable for use in the operation of a motor vehicle engine.

Example 1:

A sells gasoline, as well as other petroleum products that are used for industrial purposes. A also uses light naphtha and other petrochemicals for blending. Those additives, when compounded or otherwise mixed with gasoline, are motor fuel suitable for use in the operation of a motor vehicle engine. A has produced additional motor fuel in this State. Consequently, A must be registered under article 12-A of the Tax Law and pay the taxes imposed on such motor fuel.

(b) The product is destined for use in the operation of a motor vehicle engine as is reasonably concluded from facts and circumstances concerning such product.

Example 2:

B sells gasoline, gasohol and other motor fuels exclusively. B transports methanol to its motor fuel terminal in New York State. It can reasonably be concluded that such product is motor fuel suitable for use in the operation of a motor vehicle engine. B is deemed to have produced motor fuel in this State because B established the methanol as motor fuel. Consequently, B must be registered under article 12-A of the Tax Law and pay the taxes imposed on such motor fuel.

(c) The product is specifically designated as a fuel suitable for use in the operation of a motor vehicle engine.

Example 3:

C sells a variety of denatured alcohols, including anhydrous ethyl alcohol. These products are primarily used by C's customers as solvents and reagents. C also sells a portion of the anhydrous ethyl alcohol as ethanol fuel. Such product is motor fuel suitable for use in the operation of a motor vehicle engine when the specific designation is made. C is deemed to have produced motor fuel in this State because C established the ethyl alcohol as motor fuel on the sale thereof as motor fuel. Consequently, C must be registered under article 12-A of the Tax Law and pay the taxes imposed on such motor fuel.

(d) The product is pumped into the fuel tank of a motor vehicle for use in the operation thereof on the public highways of New York State or is pumped into the fuel tank of a pleasure or recreational motor boat for use in the operation thereof on the waterways of New York State, including any waterways bordering on the State.

Example 4:

D sells compressed natural gas for heating purposes. In addition, D sells such product to persons operating motor vehicles that have been specially adapted to operate on compressed natural gas. Such compressed natural gas is motor fuel suitable for use in the operation of a motor vehicle engine when it is pumped into the fuel tank of a motor vehicle for use in the operation of the vehicle. D is deemed to have produced motor fuel in this State because D established the compressed natural gas as motor fuel. Consequently, D must be registered under article 12-A of the Tax Law and pay the taxes imposed on such motor fuel.

(iii) Motor fuel that is suitable for use in the operation of an engine of the diesel type is diesel motor fuel as defined in paragraph (2) of this subdivision, and as such is subject to the prepaid tax as diesel motor fuel pursuant to section 1102 (a)(2) of the Tax Law.

(2)Diesel motor fuel means kerosene, crude oil, fuel oil or other middle distillate and also motor fuel suitable for use in the operation of an engine of the diesel type, excluding, however, any product specifically designated "No. 4 Diesel fuel" and not suitable as a fuel used in the operation of a motor vehicle engine. (See section 430.1[b] of this Title for specifications as to what constitutes No. 4 Diesel fuel not suitable as a fuel in such operation.)

(3) For the purposes of this Part, motor vehicle, as used in defining motor fuel, means any vehicle propelled by any power other than muscular, except boats (not including pleasure craft), road-building machinery, power shovels, tractor cranes, tractors used exclusively for agricultural purposes, and such vehicles as are run only on rails or tracks.

(4)Kero-jet fuel means a quality, highly refined kerosene product or derivative thereof, which meets kerosene-type jet fuel specifications and which is primarily used for commercial turbojet and turboprop aircraft engines.

(b)Use.

For the purpose of the imposition of the section 1102 prepaid sales tax, the term use shall mean the exercise of any right or power over motor fuel by any person, whether or not a purchaser, including but not limited to the receiving, storage or any keeping or retention for any length of time, withdrawal from storage or any consumption of such motor fuel.

(c) Imports or causes to be imported.

(1) A person imports motor fuel or causes it to be imported into this State:

(i) if such person has ownership of motor fuel at the time the fuel enters New York State's jurisdiction or at any time thereafter up to and including the off-loading of such fuel;

(ii) if such person directs or controls the importation of motor fuel into New York State; or

(iii) if such person purchases motor fuel located outside New York State for delivery into New York State from a seller who is not a registered distributor in New York State under article 12-A of the Tax Law.

Thus, more than one party in any particular importation transaction may have imported motor fuel or caused it to be imported. The act of importation encompasses the acts of all the parties to any New York sales commencing with the bringing of motor fuel into New York State and continuing to the off-loading of such fuel at or into any terminal, facility or land-sited repository for use, distribution, storage or sale in this State. Accordingly, all persons who have ownership of motor fuel from the time it enters New York State's jurisdiction to the time it is off-loaded into a terminal, facility or land-sited repository for use, distribution, storage or sale in the State have caused such motor fuel to be imported into this State. Ownership of motor fuel is evidenced by such factors as title, possession, control and/or risk of loss. The absence of title will not necessarily preclude ownership of motor fuel, and possession, control and risk of loss are given great significance in determining ownership. Unless the circumstances of the transaction clearly indicate otherwise, ownership vests in the buyer when the seller completes his performance under the sales contract with respect to the physical delivery of the motor fuel.

(2) Regardless of the indications of ownership discussed above, if the circumstances of an importation transaction indicate that a person or persons, other than the person indicated as the owner, is directing or controlling the importation of motor fuel, such person or persons directing or controlling the importation is importing motor fuel or causing it to be imported into New York State. Factors indicating that a person directs and controls an importation transaction include:

(i) placement of the order with the out-of-state supplier for the motor fuel which is the subject of the importation transaction;

(ii) arranging for the transportation of the motor fuel;

(iii) financing or paying for the purchase and/or the transportation of the motor fuel;

(iv) financing the direct parties to the transaction and/or conducting their business activities; and

(v) that transactions between the parties are not conducted at arm's length.

Example 1:

Ownership. A contracts with B, a New York registered distributor under article 12-A, for the purchase of motor fuel located outside the State. A and B agree that B will deliver the motor fuel to A's terminal in New York. B ships the motor fuel by common carrier C to A's terminal. B has imported motor fuel or caused motor fuel to be imported into this State. Although C transports the motor fuel into New York, it does so only as a common carrier.

Example 2:

Ownership. D contracts with E, a New York registered distributor under article 12-A, for the purchase of motor fuel located outside the State. D and E agree that D will take delivery of the motor fuel at E's terminal outside the State. D arranges for the transportation from E's premises to its New York terminal. D has imported motor fuel or caused motor fuel to be imported into New York State.

Example 3:

Directing and controlling the importation. F incorporates a wholly owned subsidiary, G. G has only nominal assets and no employees; its activities are conducted by the officers and employees of F. G purchases motor fuel from an out-of-state supplier and takes delivery of the fuel at the supplier's out-of-state terminal. G delivers the fuel to F's terminal in New York. F, as well as G, has imported motor fuel or caused it to be imported New York, whether or not F has directly issued payment for the fuel and/or transportation.

Example 4:

Unregistered out-of-state supplier. H contracts with J, who is not a New York registered distributor under article 12-A, for the purchase of motor fuel located outside the State. H and J agree that J will deliver the motor fuel to H's terminal in New York. J ships the motor fuel by common carrier to H's terminal. H, as well as J, has imported motor fuel or caused motor fuel to be imported because H has purchased motor fuel located outside the State for delivery into the State from a seller who is not a New York registered distributor.

(3) For the purposes of the prepaid sales tax imposed by section 1102 of the Tax Law and the excise taxes on motor fuel imposed by article 12-A of such law, New York State's jurisdiction includes New York's territorial waters. When sales or transfers of motor fuel occur when such motor fuel is on New York territorial waters prior to its being off-loaded into a New York land-sited facility, all the parties to all such sales or transfers have caused the motor fuel to be imported into New York for use, distribution, storage or sale in this State. Additionally, if the party owning the motor fuel at the time off-loading into a New York land-sited facility commences is not registered as a distributor under article 12-A of the Tax Law, the party owning the motor fuel immediately after its off-loading shall also have caused the motor fuel to be imported into New York. The owner of motor fuel at the time that off-loading is commenced at or into any terminal, facility or any other land-sited repository is responsible for payment of the taxes with respect to such motor fuel, and, in determining the amount of the tax, the motor fuel is to be measured by the amount of motor fuel which is off-loaded into the terminal, facility or other land-sited repository. Persons owning motor fuel prior to the person owning it at the time off-loading is commenced are not liable for the tax. If, however, the owner of the motor fuel at the time that off-loading is commenced is not registered as a distributor under article 12-A of the Tax Law, then the owner of the motor fuel immediately after it is off-loaded is jointly and severally liable for payment of the tax (see section 561.3 of this Part). In no event shall the tax be collected more than once with respect to the particular importation of motor fuel.

(4) Motor fuel brought into the State in the ordinary fuel tank connected with the engine of a motor vehicle, airplane, motorboat or other conveyance propelled by the use of motor fuel, and to be used only in the operation thereof, shall not be deemed imported within the meaning of this definition, if not removed from such tank except as used in the propulsion of such engine.

(d)Distributor.

For the purposes of this Part, in general, the term distributor as the same meaning as it has for purposes of the motor fuel taxes imposed by and pursuant to the authority of article 12-A of the Tax Law. Where the tangible personal property being sold is motor fuel, a distributor means:

(1)

(i) Any person importing or causing to be imported motor fuel from without the State for use, distribution, storage or sale within the State, or who produces, refines, manufactures or compounds any motor fuel within the State.

(ii) Any person who or which imports or causes to be imported from without the State any motor fuel for use, distribution, storage or sale, even though such person is a retailer selling to customers for their consumption only.

(iii) Any person who or which imports or causes to be imported motor fuel from without the State for use, distribution, storage or sale within the State, even though such person is a consumer as distinguished from a dealer in motor fuel.

(2) Any person registered as a distributor of motor fuel under article 12-A of the Tax Law for the purposes of the taxes imposed upon motor fuel by or pursuant to the authority of article 12-A is also a distributor for purposes of the prepaid tax imposed by section 1102 of article 28 of the Tax Law.

(3) A person shall not be a distributor for the purposes of the prepaid tax imposed by section 1102 of the Tax Law because such person is a distributor solely of diesel motor fuel.

(e)Filling station.

The term filling station means any place, location or station where automotive fuel is stored primarily for sale by delivery directly into the ordinary fuel tank connected with the engine of a motor vehicle to be consumed in the operation of such motor vehicle.

(f)Owner of a filling station.

The term owner of a filling station means the owner, lessee or operator of a filling station.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 561.2