N.Y. Comp. Codes R. & Regs. tit. 20 § 561.7

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

Section 561.7 - Collection of retail sales tax

(a) When motor fuel is sold at retail, rather than passing through the prepaid tax to the customer, the seller must collect the State and local sales taxes based upon the actual selling price of the motor fuel less the State motor fuel tax imposed by article 12-A and, where applicable, the New York City tax on leaded gasoline, at the State and local tax rates in effect where the taxable sale occurs. The price upon which the retail sales tax is based must not include the prepaid taxes paid on the fuel. The term retail sales for purposes of motor fuel transactions shall have the same meaning as contained in section 526.6 of this Title.

(b) Purchasers of a large volume of motor fuel shall give the seller a certificate in such form as the Department of Taxation and Finance may prescribed indicating whether the fuel is being purchased for resale or purchased at retail for the purchaser's own use. Where the purchaser of a large volume of motor fuel does not provide the seller with such a certificate, the seller must determine whether the prepaid tax which would be due on each gallon of motor fuel if the fuel purchased for resale or the retail sales tax which would be due on each gallon of motor fuel if the fuel was purchased at retail is greater. If the prepaid tax is greater, the seller shall treat the purchase as a purchase for resale, pass through the prepaid tax and issue a certification of tax payment as provided in section 561.5 of this Part. If the retail sales tax is greater, the seller shall treat the purchase as purchase at retail and collect the sales tax. For purposes of this subdivision, a purchase of a large volume of motor fuel is a purchase of 500 gallons or more.

(c) Exempt sales.

(1) Retail sales of motor fuel to the following purchasers in the described circumstances are exempt from sales tax:

(i) the United States of America, and any of its agencies and instrumentalities;

(ii) New York State, or any of its agencies, instrumentalities, public corporations (including a public corporation created pursuant to agreement or compact with another state or Canada) or political subdivisions (including school districts);

(iii) a hospital which holds a current operating certificate issued by the New York State Department of Health under section 2805 of the Public Health Law or by the New York State Department of Mental Hygiene under article 31 of the Mental Hygiene Law and which qualifies as an exempt organization under section 1116(a)(4) of the Tax Law;

(iv) an airline, as defined in section 528.10 of this Title, purchasing kero-jet fuel for use in its own aircraft or for use in aircraft under its control;

(v) an Indian nation or tribe listed in section 529.9 of this Title making purchases from a retail service station on its qualified reservation as defined in section 529.9, and an individual member of such an Indian nation or tribe residing on such a qualified reservation making purchases from a retail service station on the reservation where he resides; and

(vi) diplomatic missions and diplomatic personnel purchasing motor fuel with credit cards issued by oil companies, as provided in section 529.5(i) of this Title.

Only purchasers who fall within the categories listed above may purchase motor fuel at retail without payment of the sales tax to the vendor. The other exemptions from sales tax provided for by sections 1115 and 1116 of the Tax Law do not apply to sales of motor fuel. Although these sales are not exempt under these other exemption provisions, refunds and credits are allowed. See section 561.10(c) of this Part.

(2) In order to make retail purchases of motor fuel without payment of tax, a purchaser listed in paragraph (1) of this subdivision must furnish to the seller either:

(i) a certificate to the effect that the purchaser is entitled to acquire motor fuel tax-free pursuant to paragraph (1) of this subdivision on the form which the Department of Taxation and Finance has prescribed, signed by the purchaser and setting forth his name and address together with such other information as said department has required to be completed therein; or

(ii) a government purchase order or the appropriate exemption document where the purchaser is a governmental entity described in subparagraphs (1)(i) and (ii) of this subdivision.

(3) Sales of motor fuel at retail--presumptions.

(i) It shall be presumed that all retail sales of motor fuel are subject to tax until the contrary is established. It shall be further presumed that all motor fuel imported, caused to be imported, produced, refined, manufactured, compounded, received or possessed by any person in this State has been sold subject to tax. This presumption shall not apply to motor fuel in the fuel tank of a motor vehicle used to propel such vehicle or to motor fuel in containers of 10 gallons or less.

(ii) The burden of proving that any retail sale is not subject to the tax shall be upon the purchaser of the motor fuel and, except as otherwise provided in subparagraph (iv) of this paragraph, shall also be upon the person required to collect the tax.

(iii) When a vendor makes a sale of motor fuel which is exempt as provided in paragraph (1) of this subdivision, as proof of the exemption the vendor shall obtain from the purchaser and retain in his files either:

(a) a certificate to the effect that the purchaser is entitled to acquire motor fuel tax-free pursuant to this subdivision on the form which the Department of Taxation and Finance has prescribed, signed by the purchaser and setting forth his name and address together with such other information as said department has required to be completed therein; or

(b) a government purchase contract or order or the appropriate exemption document where the purchaser is a governmental entity described in paragraph (1) of this subdivision.

(iv) When a properly completed certificate, government purchase contract or order or exemption document has been furnished to the vendor and accepted by him in good faith within 90 days after the delivery of motor fuel, the burden of proving that the receipts from such sale are not taxable is solely on the purchaser.

(4) Motor fuel may be purchased without the payment of sales and use tax only when the purchasers described in paragraph (1) of this subdivision buy such fuel at retail for their own use or consumption. When such purchasers buy motor fuel for resale, the vendor must pass through the tax which has been prepaid on such fuel.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 561.7