Starting this month, taxes in the state are collected from fuel distributors when the product is loaded into a truck and removed from the storage terminal, rather than at the time the distributors purchase it, Gov. Andrew Cuomo announced today. Distributors typically purchase a large volume of fuel and store it for months at a time.
Cuomo, who signed the legislation earlier this year, said the change in state tax law will benefit small business operators that sell heating oil and certain highway diesel motor fuels.
“This administration is committed to creating a business-friendly setting in New York State, and this change contributes a positive step in that direction for fuel distributors,” Cuomo said in a statement. “By updating the State’s fuel tax law we are addressing an unnecessary financial burden on small businesses.”
Thomas J. Peters, CEO of the Empire State Petroleum Association, a trade association representing 300 petroleum marketers throughout New York, said the group’s members are pleased with the new law.
“Before, the distributor had to pre-pay all that tax upfront, but couldn’t collect it until a sale was made, which might be many months down the road. It’s a question of improving a business’s cash position – and this is a cash flow victory.”
The Empire State Petroleum Association estimates that petroleum marketers provide heating oil service to more than 2.6 million households in New York and supply gas and diesel fuel for the 8.4 million registered automobiles and 1.3 million trucks and buses.
This is the Tax Department’s memorandum on the new law: