I buy diesel fuel only for off-road equipment (hi-lift tractors and a crane) that never touches a public highway. Is that fuel exempt from New York's diesel motor fuel excise taxes?

Plain-English summary

Carmen M. Pariso, Inc. runs off-road hi-lift tractors (dredging sediment from a utility company's collection ponds) and a crane (moving materials at a landfill it manages). Neither vehicle ever drives on a public highway. Pariso asked whether the diesel fuel it buys for these machines is exempt from New York's diesel motor fuel excise taxes.

The Department said no exemption applies at the time of purchase. Article 12-A of the Tax Law imposes three stacked excise taxes on diesel fuel (a 6-cent base tax under § 282-a, a 3-cent additional tax under § 282-b, and a 1-cent supplemental tax under § 282-c) on essentially all diesel sold or used in the state. There are only two carve-outs: sales to certain exempt organizations (like government entities), and fuel used exclusively for heating or directly in producing goods for sale. Pariso is a private business and its fuel is powering equipment, not heating a building or making a product — so neither carve-out fit, even though a "motor vehicle" is separately defined (§ 282.3) to exclude things like tractor cranes and road-building machinery from the highway use tax.

But the Department pointed to a different escape hatch: a refund. Under § 289-c(3)(a), anyone who pays the diesel tax and then consumes the fuel other than in a highway-driven motor vehicle can apply to get the tax back. Since Pariso's tractors and crane never touch the highways, Pariso can pay the tax up front (as it already had been doing) and then file for a refund on the highway-free portion. The Department also flagged a bookkeeping point: if Pariso has any on-highway vehicles too, it needs to keep the fuel accounted for separately so the refund only covers the off-road usage.

What this means for you

Contractors, excavators, and landfill/quarry operators

If you run diesel-powered equipment that never leaves your job site or facility, you still pay the excise tax when you buy the fuel — there's no upfront off-road exemption for general businesses. Your path to relief is a refund claim under § 289-c(3)(a), not a tax-free purchase, unless you separately qualify as an exempt organization or your fuel goes exclusively into heating or production of goods for sale.

Businesses with mixed on-highway and off-highway fleets

Keep the fuel used in on-highway vehicles clearly separated (by tank, meter, or records) from fuel used in off-road equipment. The Department specifically warned that adequate accounting is needed so a refund claim doesn't inadvertently sweep in taxed, on-highway fuel.

Common questions

Q: Can I just buy diesel fuel tax-free for my off-road equipment?
A: Not under this ruling. Absent a specific exemption (exempt organization status, or fuel used exclusively for heating or production of goods for sale), the excise tax applies at purchase regardless of where the fuel is ultimately used.

Q: How do I get the tax back on fuel used off-highway?
A: File for a refund under Tax Law § 289-c(3)(a), which reimburses tax already paid on motor fuel or diesel motor fuel that is not consumed operating a motor vehicle on New York's public highways.

Q: Does it matter that a "tractor crane" is excluded from the definition of "motor vehicle"?
A: That exclusion (§ 282.3) affects other provisions of Article 12-A, but it didn't change the outcome here — the excise tax on the sale or use of diesel fuel still applied because Pariso didn't qualify for either exemption category.

Q: Can I rely on this ruling for my own equipment?
A: No. This advisory opinion binds the Department only as to the petitioner and the specific facts described — talk to a New York tax professional about your own fleet and usage.

Citations and references

Statutes:

• Tax Law § 282-a (base 6¢/gallon diesel motor fuel excise tax)
• Tax Law § 282-b (additional 3¢/gallon diesel tax)
• Tax Law § 282-c (supplemental 1¢/gallon diesel tax)
• Tax Law § 282.3 (definition of "motor vehicle," excludes tractor cranes, road-building machinery, agricultural tractors)
• Tax Law § 289-c(3)(a) (refund for diesel/motor fuel not consumed operating a highway motor vehicle)
• Tax Law § 1116(a)(1)-(2) (exempt-organization sales)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/gasoline_ao.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/misc/a95_1m.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-95 (1)M
Miscellaneous Tax
April 6, 1995

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. M950525A

On October 31, 1994, a Petition for Advisory Opinion was received from Carmen M. Pariso,
Inc., 273 S. Roycroft, Buffalo, New York 14225.
The issue raised by Petitioner, Carmen M. Pariso, is whether Petitioner's purchase of diesel
motor fuel for use solely in off-road hi-lift tractors and cranes is exempt from the excise taxes on
diesel motor fuel imposed under Sections 282-a, 282-b and 282-c of the Tax Law.
Petitioner currently maintains an off-road operation of a permanent nature wherein hi-lift
tractors dredge sediment from the bottom of collection ponds maintained by a major public utility
company. In addition, Petitioner maintains a landfill site wherein a crane is utilized to manage the
landfill itself (i.e., moving and placing landfill materials). Each of these off-road sites contains a tank
with a nozzle apparatus specifically designed to service these off-road vehicles. Petitioner has, and
continues to pay excise tax on its purchases of diesel motor fuel for such vehicles.
Article 12-A of the Tax Law imposes three excise taxes on Diesel motor fuel.
Section 282-a of Article 12-A of the Tax Law provides, in part, as follows:
Section 282-a. Imposition of excise tax on Diesel motor fuel.-- 1. There is
hereby levied and imposed with respect to Diesel motor fuel an excise tax of six
cents per gallon upon the sale or use of Diesel motor fuel in this state.
The excise tax is imposed on the first sale or use of Diesel motor fuel to occur
which is not exempt from tax under this article. Provided, however, if the tax has not
been imposed prior thereto, it shall be imposed on the delivery of Diesel motor fuel
to a filling station or into the fuel tank connecting with the engine of a motor vehicle
for use in the operation thereof whichever event shall be first to occur ....
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3. (a) The tax imposed by this section shall not apply to the sale of untaxed
   Diesel motor fuel to or the use of such fuel by an organization described in paragraph
   one or two of subdivision (a) of section eleven hundred sixteen of this chapter where
   such Diesel motor fuel is used by such organization for its own use or consumption.
   (b) The tax on the incident of sale or use imposed by subdivision one of this
   section shall not apply to: (i) the sale to or use by the consumer of previously untaxed
   Diesel motor fuel which is not enhanced Diesel motor fuel and which is used

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exclusively for heating purposes or for the purpose of use or consumption directly
and exclusively in the production of tangible personal property, gas, electricity,
refrigeration or steam, for sale, but only if all of such fuel is consumed other than on
the highways of this state; provided, however, this exemption shall in no event apply
to a sale of Diesel motor fuel which involves a delivery at a filling station or into a
repository which is equipped with a hose or other apparatus by which such fuel can
be dispensed into the fuel tank of a motor vehicle; or (ii) the sale of previously
untaxed Diesel motor fuel to a person registered under this article as a distributor of
Diesel motor fuel other than (A) a retail sale to such person or (B) a sale to such
person which involves a delivery at a filling station or into a repository which is
equipped with a hose or other apparatus by which such fuel can be dispensed in the
fuel tank of a motor vehicle; . . .
Section 282-b of Article 12-A of the Tax Law imposes an additional Diesel motor fuel tax.
Section 282-b provides that "in addition to the tax imposed by section two hundred eighty-two-a of
this chapter, a like tax shall be imposed at the rate of three cents per gallon upon the sale or use
within the state of diesel motor fuel or upon the delivery of Diesel motor fuel to a filling station or
into the fuel tank of a motor vehicle for use in the operation thereof. Except as otherwise provided
in this section, all of the provisions of this article shall apply with respect to the additional tax
imposed by this section to the same extent as if it were imposed by said section two hundred eighty­
two-a . ... "
Moreover, Section 282-c of Article 12-A of the Tax Law imposes a supplemental Diesel
motor fuel tax. Section 282-c provides that "in addition to the taxes imposed by sections two hundred
eighty-two-a and two hundred eighty-two-b of this chapter, a like tax shall be imposed at the rate of
one cent per gallon upon the sale or use within the state of diesel motor fuel or upon the delivery of
Diesel motor fuel to a filling station or into the fuel tank of a motor vehicle for use in the operation
thereof. Except for paragraph (b) of subdivision three of section two hundred eighty-nine-c, all
provisions of this article shall apply with respect to the supplemental tax imposed by this section to
the same extent as if it were imposed by said section two hundred eighty-two-a .... "
Section 282 of Article 12-A contains the definition for these taxes. Section 282.3 defines the
term "motor vehicle" to mean "any vehicle propelled by any power other than muscular, except
boats, road building machinery, power shovels, tractor cranes, tractors used exclusively for
agricultural purposes and such vehicles as are run only on rails or tracks." (emphasis added)
Section 289-c of the Tax Law provides, in part, as follows:
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3. (a) Except as otherwise provided in paragraph (b) of this section, any
   person who shall buy any motor fuel or diesel motor fuel, on which the tax imposed
   by this article shall have been paid, and shall consume the same in any manner except
   in the operation of a motor vehicle upon or over the highways of this state, or in the
   operation of a pleasure or recreational motor boat upon or over the waterways of the

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state, shall be reimbursed the amount of such tax in the manner and subject to the
conditions herein provided except that there shall be no reimbursement of tax paid
on motor fuel or diesel motor fuel taken out of this state in a fuel tank connected with
the engine of a motor vehicle and consumed outside of this state. (emphasis added)
Section 1116 of the Tax Law provides, in pertinent part, as follows:
Sec. 1116. Exempt organizations -- (a) Except as otherwise provided in this
section, any sale or amusement charge by or to any of the following or any use or
occupancy by any of the following shall not be subject to the sales and compensating
use taxes imposed under this article:
(1) The state of New York, or any of its agencies, instrumentalities, public
corporations (including a public corporation created pursuant to agreement or
compact with another state or Canada) or political subdivisions where it is the
purchaser, user or consumer, or where it is a vendor of services or property of a kind
not ordinarily sold by private persons;
(2) The United States of America, and any of its agencies and
instrumentalities, insofar as it is immune from taxation where it is the purchaser, user
or consumer, or where it sells services or property of a kind not ordinarily sold by
private persons; ....
In the instant case, Petitioner maintains tanks at several off-road sites to supply diesel motor
fuel for hi-lift tractors and a crane. Such tanks are equipped with nozzle apparatus specifically
designed to service these off-road vehicles. The hi-lift tractors are used to dredge sediment from the
bottom of collection ponds maintained by a utility company. The crane is used to move and place
landfill materials in a landfill managed by Petitioner.
Pursuant to Sections 282-a, 282-b and 282-c of the Tax Law, excise taxes are imposed on the
first sale or use of Diesel motor fuel to occur which is not exempt from tax under Article 12-A of
the Tax Law. Petitioner is not an exempt organization as described in Sections ll16(a)(1) or (2) of
the Tax Law. Additionally Petitioner is neither purchasing Diesel motor fuel to be used exclusively
for heating purposes nor for use or consumption directly and exclusively in the production of
tangible personal property, gas, electricity, refrigeration or steam for sale. Therefore, Petitioner does
not meet the exemption requirements set forth in Section 282-a(3) of the Tax Law. Accordingly,
pursuant to Sections 282-a, 282-b and 282-c of the Tax Law, Petitioner may not purchase Diesel
motor fuel exempt from the taxes imposed by Sections 282-a, 282-b and 282-c of the Tax Law.
It is noted, however, that pursuant to Section 289-c.3(a) of the Tax Law, any person who buys
any motor fuel or diesel motor fuel on which the taxes imposed by Sections 282-a, 282-b and 282-c
of the Tax Law have been paid and consumes the motor fuel or diesel motor fuel in any manner
except in the operation of a motor vehicle upon or over the highways of this state shall be reimbursed
the amount of such taxes. Accordingly, since Petitioner is not consuming Diesel motor fuel in

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the operation of motor vehicles upon or over the highways of New York State, but in vehicles used
exclusively for off-road operation, Petitioner is entitled to and may apply for a refund of the excise
taxes paid on the purchase of Diesel motor fuel consumed in such manner.
It is noted that if there are company owned or controlled "on-highway" type vehicles in
addition to those described in the request for advisory opinion, there should be adequate accounting
for the fuel put into "on-highway" vehicles.

DATED: April 6, 1995

/s/
PAUL B. COBURN
Deputy Director
Taxpayer Services Division

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.