Motor fuel and highway diesel motor fuel tax suspension ending

The following taxes on motor fuel and highway diesel motor fuel were suspended effective June 1, 2022, through December 31, 2022:

• the excise tax (Article 12-A),
• prepaid sales tax, and state sales and use taxes (Article 28), and
• the additional state sales and use tax imposed in the Metropolitan Commuter Transportation District (MCTD).

Other state taxes and taxes imposed by any local government were not suspended.

The suspension period began June 1, 2022, and continues through December 31, 2022.

No. The suspension applied to motor fuel as defined in Tax Law §282(2) and highway diesel motor fuel as defined in Tax Law §282(16-a). It did not apply to other fuel types.

See Publication 908, Fuel Tax Rates. 

See Publication 787, Chart for Prepayment of Sales Tax on Diesel Motor Fuel, and Publication 790, Chart for Prepayment of Sales Tax on Motor Fuel.

No, the local sales tax on motor fuels was not suspended. However, several localities elected a cents-per-gallon sales tax rate. See Publication 718-F, Local Sales and Use Tax Rates on Qualified Motor Fuel, Highway Diesel Motor Fuel, and B20 Biodiesel, for current rates.

See Publication 718-F, Local Sales and Use Tax Rates on Qualified Motor Fuel, Highway Diesel Motor Fuel, and B20 Biodiesel, for current rates.

Yes. You must continue to report the total gallons as taxable gallons on your motor fuel and sales tax returns and schedules, as applicable.  The rates were reduced on the applicable lines of your returns for the suspension period.

Yes.

You may claim a refund of the excise tax paid on motor fuel and highway diesel motor fuel held in inventory prior to June 1, 2022, and sold during the suspension period using Form FT-946/1046, Motor Fuel/Diesel Motor Fuel Tax Refund Application. You must include the proper documentation with any claim for refund. For more information, see the instructions for Form FT-946/1046 and Notice N-22-1, Suspension of Certain Taxes on Motor Fuel and Diesel Motor Fuel Beginning June 1, 2022.

You may also claim a credit or apply for a refund of any prepaid sales tax paid on motor fuel and highway diesel motor fuel held in inventory prior to June 1, 2022, and sold during the suspension period. To claim a credit or refund of the prepaid sales tax, use either Form FT-945/1045, Prepaid Sales Tax on Motor Fuel/Diesel Motor Fuel Return, Form FT-949, Application for Refund of Prepaid Sales Tax on Motor Fuel Sold Other Than at Retail Service Stations, or Form FT-1010, Application for Refund of Prepaid Sales Tax on Diesel Motor Fuel Sold Other Than at Retail Service Stations.

Yes. Retailers may claim a credit or refund for excise tax and state sales tax paid on the purchase of motor fuel or highway diesel motor fuel that they sold during the suspension period where the tax is not included in the price charged to the retail customer.

During the suspension period, retailers that sold motor fuel or highway diesel motor fuel on which the prepaid sales tax was certified in the price paid by the retailer on such fuels may claim a credit for the prepaid sales tax paid on the appropriate sales tax Schedule FR when filing their sales tax return. A refund or credit forward may be claimed on the return if the overall return is a net credit balance. You must keep records to substantiate the payment of prepaid sales tax to your suppliers and that the prepaid taxes were not passed through to customers in the pump price and make these records available upon request by the Commissioner of Taxation and Finance.

To claim a refund of the prepaid sales tax prior to filing a sales tax return, retailers may also use Form FT-950, Application for Refund of Prepaid Sales Tax on Motor Fuel Sold at Retail Service Stations, or Form FT-1007, Application for Refund of Prepaid Sales Tax on Highway Diesel Motor Fuel Sold at Retail Service Stations, and report these refunds on Schedule FR.

During the suspension period, retailers that sold motor fuel or highway diesel motor fuel on which the excise tax was included in the price paid by the retailer on such fuels, may claim a refund of the excise tax paid by filing Form FT-946/1046, Motor/Diesel Motor Fuel Tax Refund Application.

Proper documentation must be included with any claim for refund application.

This includes, but is not limited to:

• purchase invoices,
• a sales summary report that indicates fuel sold, including the sales price of fuels on May 31, 2022, and the sales price of fuel during the period you are claiming a refund for, and
• a fully completed Form FT-943, Quarterly Inventory Report by Retail Service Stations and Fixed Base Operators, for the period ending May 31, 2022.

Also, see the instructions for the refund claim application form you are filing.

Yes. The suspension for the following taxes on motor fuel is lifted on January 1, 2023:

• motor fuel excise tax
• prepaid sales tax and state sales and use taxes
• the additional state sales and use tax imposed in the Metropolitan Commuter Transportation District (MCTD)

Beginning January 1, 2023, you must charge these taxes on any sale of previously untaxed motor fuel in inventory. Any tax due to the Tax Department must be paid with your motor fuel, diesel motor fuel, and prepaid sales tax returns.

When you deliver dyed diesel motor fuel to a filling station or into a storage tank or other repository equipped with a fueling nozzle or similar apparatus capable of dispensing the fuel into the tank of a motor vehicle, the sale of the product is taxed as highway diesel motor fuel under Articles 12-A and 13‑A. 

This sale qualified for the suspension of certain taxes on diesel motor fuel.  Therefore, from June 1, 2022, through December 31, 2022, the excise tax under Article 12-A and state sales and use tax under Article 28 were suspended and had to be excluded from the price on this sale of the fuel.

During the suspension period the following taxes apply to dyed diesel delivered to a repository equipped with a fueling nozzle:

• petroleum business tax, highway diesel motor fuel rate (Article 13-A)
• local sales tax only, rate in effect in that locality (Articles 28 & 29)

Report petroleum business tax on your Form PT-102, Tax on Diesel Motor Fuel, using the Fully taxable sales and uses (includes automotive use) entry field.

Report local sales tax only on your main sales tax return (Forms ST-810, ST-100, or ST-101) by entering the taxable sale amount:

• in the jurisdiction where the sale occurred, and
• the Credits against taxable sales & services field in the New York State Only (NE 0021) jurisdiction for sales made outside of the Metropolitan Commuter Transportation District (MCTD), or the NYS/MCTD (NE 8061) jurisdiction for sales within the MCTD.

Beginning January 1, 2023, you must include motor fuel/diesel motor fuel excise taxes and state and local sales tax in the pump price.

Include excise tax in the pump price when the tax is passed through to you from a distributor or wholesaler when you purchased the fuel.

Include state and local sales tax in the pump price even if you did not pay prepaid sales tax when you purchased the fuel. Credits for prepaid sales tax may only be claimed on your return if you paid it to your supplier. Documentation is required.

Prepaid sales tax on motor fuel and diesel motor fuel participants had to submit PrompTax transactions for prepaid sales tax during the suspension period. Since the prepaid sales tax was suspended from June 1, 2022, through December 31, 2022, the liability reported for these periods was zero.

Motor fuel and petroleum business tax participants had to submit PrompTax transactions during the suspension period. Since the excise tax on motor fuel and highway diesel motor fuel (Article 12-A) was suspended from June 1, 2022, through December 31, 2022, the amount allocated to the excise tax for those fuels was reported as zero.  The petroleum business tax (Article 13-A) rates remained in effect during the suspension period. The amounts allocated to the petroleum business tax portion on motor fuel/diesel motor fuel should reflect the appropriate PrompTax amount due for the reporting period.

Second quarter of 2022

Follow the steps below to compute the tax-paid gallons reported on Form IFTA-101, column L:

Step 1: Calculate the total tax-paid gallons purchased in New York State for April and May of 2022.

Step 2: Calculate the total gallons purchased in New York State for the month of June when the suspension was in effect.

Step 3: Multiply the amount from step 2 (total gallons purchased in New York State for the month of June) by the applicable percentage in the chart below.

Step 4: Add the totals from step 1 and step 3. Enter this amount on Form IFTA-101, column L, Tax-paid gallons, for the second quarter of 2022.

Third and fourth quarters of 2022

Follow the steps below to compute the tax-paid gallons reported on IFTA-101, column L:

Step 1: Calculate the total tax-paid gallons purchased in New York State for the quarter.

Step 2: Multiply the amount from step 1 (total tax-paid gallons purchased in New York State for the quarter) by the applicable percentage in the chart above.

Step 3: Enter the amount from step 2 on Form IFTA-101, column L, Tax-paid gallons.

If any of the following apply to any of your vehicles, you may be required to file Form MT-903-FUT, Fuel Use Tax Return, for the month of June 2022 and for the third and fourth quarters of 2022 because fuel use tax was not paid at the pump:

• Your vehicle has a gross vehicle weight of more than 26,000 pounds.
• Your vehicle and trailing unit, if used in combination, would have a gross weight of more than 26,000 pounds.
• Your vehicle has three or more axles regardless of weight.

Note: You may include any fuel use tax due for June 2022 on your Form MT-903-FUT for the third quarter 2022. This return was due October 31, 2022.

To calculate your fuel use tax for any fuel purchased and used in New York State during the suspension period, complete Form MT-903-FUT as follows:

Step 1: Complete lines 1 through 5.

Step 2: On line 6, report only fuel purchased in New York State during the filing period.

a. Multiply the total gallons of each type of fuel by the applicable percentage in the chart below and enter the result.

b. Report non-diesel motor fuel (gasoline or propane (LPG)) in column (a) and diesel motor fuel in column (b).

Step 3: Subtract line 6 from line 5 and report the number of adjusted gallons on line 7a.

Step 4: Use line 8 to report any unpaid fuel use tax owed because of the excise and sales tax suspension.

Step 5: On line 8a, multiply the amount of non-diesel motor fuel reported on line 7a, column a, by the fuel use tax rate .413 (or .24 for propane (LPG)).

Step 6: On line 8b, multiply the amount of diesel motor fuel reported on line 7a, column (b), by the fuel use tax rate .3955.

Step 7: Complete lines 9 through 16 as applicable.