New York – Exemption for Liquefied Natural Gas

SALT Report 2015 – The New York Department of Taxation and Finance issued a bulletin regarding the taxability of Liquefied Natural Gas.  New York provides an exemption from excise taxes, petroleum business taxes, prepaid sales taxes and state and local sales and use taxes for purchases of Compressed Natural Gas. Because of these exemptions, CNG is taxed at a rate of $0.00 per gallon under the fuel use tax, IFTA.

The bulletin explains that the tax exemptions provided for compressed natural gas now applies to liquefied natural gas. The bulletin also provides guidance as to how LNG should be reported for excise, petroleum business, sales, and fuel use tax purposes, as well as how consumers and motor carriers can claim a refund if tax was previously paid on exempt fuel consumed in New York.

Instructions for Distributors

Importers and producers of CNG and LNG must be registered as distributors of motor fuel and must report their sales as follows:

  • Form PT-101 Tax on Motor Fuel – Report LNG on the line for CNG, by doing so, you will only be subject to the petroleum testing fee rate of $.0005 per gallon.
  • Form ST-100.10 Quarterly Schedule FR, Sales and Use Tax on Qualified Motor Fuel and Highway Diesel Motor Fuel – In step 1 you should include the LNG as non-taxable gallons sold.

Consumer Refunds

Consumers that purchased taxable LNG may file a claim for refund as follows:

  • Use Form FT-946/1046, Motor/Diesel Motor Fuel Tax Refund Application to claim a refund for the Article 12-A excise tax.
  • Use Form AU-630, Application for Reimbursement of the Petroleum Business Tax to claim a reimbursement for the Article 13-A petroleum business tax.
  • Use Form FT-500, Application for Refund of Sales Tax Paid on Petroleum Products to claim a refund for the Article 28 sales tax.

Instructions for Motor Carriers

Motor carriers must report sales of LNG as follows:

  • On Form IFTA-101, IFTA Quarterly Fuel Tax Schedule – List LNG as a separate fuel type (code L) for fuel use tax.

Motor carriers that have previously paid fuel use tax on LNG at the motor fuel tax rate may claim a credit or refund as follows:

  • File an amended Form IFTA-100, IFTA Quarterly Fuel Use Tax Return, and IFTA-101 to claim a credit or refund of the fuel use tax that was previously paid on purchases of LNG consumed in New York State.

All claims for refund or credit must be filed within 48 months from the date you filed the original return.

For Further Information:

New York Department of Taxation and Finance – TSB-M-13(1)M, (1)S