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The petroleum business tax (PBT) is a privilege tax imposed on petroleum businesses operating in New York State. The PBT is imposed at a cents-per-gallon rate on petroleum products sold or used in the State. The tax imposition occurs at different points in the distribution chain depending on the type of petroleum product:

• for motor fuel, the PBT is imposed upon importation into the State
• for diesel motor fuel, the PBT is imposed on the first sale or use in the State
• for non-highway diesel motor fuel and residual oil, the PBT is imposed on final sale or use
• for kero-jet fuel, the PBT is imposed on fuel consumed on take-off from points in the State

The tax is jointly administered and collected with the State's motor fuel excise tax. 

Definitions

Motor fuel is gasoline, benzol, reformulated blend stock for oxygenate blending, conventional blend stock for oxygenate blending, E85, fuel grade ethanol that meets the ASTM International active standards specification D4806 or D4814 or other product which is suitable for use in the operation of a motor vehicle engine.

Diesel motor fuel is No. 1 diesel fuel, No. 2 diesel fuel, biodiesel, kerosene, crude oil, fuel oil, or other middle distillate and also motor fuel suitable for operating a diesel engine.  Diesel motor fuel does not include any product specifically designated "No. 4 diesel fuel".

Highway diesel motor fuel is any diesel motor fuel that is not non-highway diesel motor fuel.

Non-highway diesel motor fuel is any diesel motor fuel designated for use other than on a public highway (except for the use of the public highway by farmers to reach adjacent farmlands), and is dyed diesel motor fuel.

Dyed diesel motor fuel is diesel motor fuel dyed in accordance with and for the purpose of complying with the provisions of 26 USC   4082(a) and its regulations, as may be amended in the future.

Exemptions, refunds, and reimbursements

• Sales to governments (federal, State and local) are exempt from PBT. 
• Kerosene, crude oil, bunker fuel, liquefied petroleum gas (LPG), compressed natural gas (CNG) and E-85 products are exempt from PBT.
• Sales of non-highway diesel motor fuel and residual petroleum product for residential heating use, farming, manufacturing, and mining purposes are exempt from PBT.
• Sales of B20 and sales of non-highway diesel motor fuel for nonresidential heating are partially exempt from PBT.
• Full refunds of PBT are available for motor fuel and diesel motor fuel used in buses providing local transit service or school transportation, used in commercial fishing vessels and used in passenger commuter ferries.

Who must pay the tax

The tax is paid by registered distributors.

Registration requirements

You must register as a motor fuel distributor if you:

• import (or cause to be imported ) any motor fuel (for example, gasoline, fuel grade ethanol) into New York State for use, distribution, storage or sale within the State, or
• produce, refine, manufacture or compound motor fuel within the State.

You must register as a diesel motor fuel distributor if you:

• import (or cause to be imported) any diesel motor fuel into the state (other than fuel imported in the tank of a vehicle for its operation),
• produce, refine, manufacture, or compound diesel motor fuel within the state, or
• sell diesel motor fuel in the state (except diesel motor fuel sold to consumers and delivered directly into the fuel tank of a motor vehicle, boat, or aircraft for its operation).

You must register as a residual petroleum product business if you:

• import (or cause to be imported) any residual petroleum product into New York State for use, distribution, storage, or sale in New York State;
• produce, refine, manufacture, or compound residual petroleum product within New York State; or,
• sell residual petroleum product in New York State.

You must register as an aviation fuel business if you are:

an aircraft operator that imports kero-jet fuel into New York State in the fuel tanks of its aircraft, for consumption in the state

You may apply for registration as a distributor of kero-jet fuel only if you are:

a fixed‑base operator in New York State, and all your sales of kero-jet fuel are delivered directly into the fuel tank of an airplane for use in its operation

You may apply for registration as a retailer of non-highway diesel motor fuel  only if you:

import (or cause to be imported) into or sell in New York State, non-highway diesel motor fuel that you will sell to consumers.

Apply for any of these registrations using Form TP-650, Application for Registration under Articles 12-A and 13-A. For more information on additional PBT registration requirements, see Form TP-650-I, Instructions for Form TP-650.

When to file and pay

*There are quarterly filing options available for some taxpayers in these two categories. See Form PT-200, Quarterly Petroleum Business Tax Return (Retailer of Non-Highway Diesel Motor Fuel Only and Distributor of Kero-Jet Fuel Only), for more information. (Not yet available)

Electronic filing requirements

Generally, if your business incurs more than $5 million in combined annual motor fuel excise tax and petroleum business tax liability, you'll be required to participate in the Department's PrompTax electronic filing program.

Tax Rates

Publication 908, Fuel Tax Rates, provides the current year's PBT rates as well as exemptions, reimbursements and credits. The cents-per-gallon rates vary by product and/or transaction type.

For more information:

• Petroleum business and fuel excise tax forms and instructions (current) or (prior years and periods) 
• Petroleum business tax advisory opinions (TSB-As)
• Petroleum business tax guidance (NYT-Gs)
• Petroleum business tax (TSB-Ms)
• Petroleum business tax publications