New York – Sales Tax Exemptions for Alternative Fuels Extended

SALT Report 1628 – The New York Department of Taxation and Finance issued a technical memorandum regarding an amendment to the Tax Law that extends the state and local sales and use tax exemptions for alternative fuels that were due to expire on August 31, 2012. Effective immediately, the full sales and use tax exemptions for E85, compressed natural gas, and hydrogen, and the partial exemption for B20 will be extended through August 31, 2014.
Prepaid Sales Tax
The exemptions from prepaid sales tax for CNG and hydrogen fuels and E85 fuel will be exempt from the prepaid tax, if it is delivered to, and placed in, the storage tank of a filling station and will be dispensed directly into a motor vehicle. The exemption from the prepaid sales tax will not apply to sales of B20. The prepaid sales tax for B20 fuel must be calculated at the full amount and may not be reduced by 20%.
E85 Fuel
The change to the definition of E85 fuel is still in effect.  E85 fuel is defined as a blend of ethanol and motor fuel, which meets the American Society for Testing and Materials International standard for fuel ethanol. The definition was previously amended to recognize that at certain times of the year, E85 fuel may not contain exactly 85% ethanol.
Vendors Who Are Not Retail Gas Stations
Vendors that are not retail gas stations must collect sales tax on the total taxable receipts and at the regular percentage rate of state and local sales taxes, unless the purchaser gives the vendor Form ST-121, Exempt Use Certificate, using Part III, Box U.
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