Can a sport-fishing boat that holds a license to catch and sell some of its fish get a refund of New York's motor fuel, petroleum business, and sales taxes on its fuel as a commercial fishing vessel?

Plain-English summary

A Montauk marina asked, in effect: can the sport-fishing boats in its harbor get New York's commercial-fishing fuel tax breaks just because their owners hold a license to sell some of the catch? The marina pointed out that most of these are pleasure boats — often million-dollar sport-fishing yachts with crews — whose owners can get a state commercial fishing license for $100 (resident) or $250 (nonresident), with no requirement to own a boat, or a federal tuna permit for a $25 fee. It asked whether such a licensed vessel is entitled to a refund of the taxes on fuel under Articles 12-A (motor fuel), 13-A (petroleum business), and 28/29 (sales).

The answer: it depends on the facts — and that factual determination can't be made in an Advisory Opinion. The Department laid out the legal framework instead of giving a yes or no.

• An Advisory Opinion only applies the law to a "specified set of facts" (Tax Law § 171(24); 20 NYCRR 2376.1(a)); whether a particular vessel qualifies is a factual question outside its scope.
• The fuel tax relief runs only to a "commercial fisherman" — a person licensed and actually in the business of harvesting fish for sale, weighed by the time, capital, and effort devoted to it and the percent of total gross income it generates (Tax Law § 300(i)).
• The vessel itself must be a "commercial fishing vessel" — used directly and predominantly in harvesting fish for sale (§ 300(j); sales-tax exemption § 1115(a)(24)). "Predominantly" means more than 50% (TSB-M-85(17)S), and a vessel used predominantly for sport fishing is expressly excluded.
• The motor fuel tax refund (§ 289-c.3(a)) separately provides no reimbursement for fuel consumed in a pleasure or recreational motor boat.
• So a cheap license or permit alone doesn't convert a pleasure boat into a commercial fishing vessel; the Department will look at the real facts of the fisherman's business and the vessel's actual use.

What this means for you

A commercial fishing license is necessary but nowhere near sufficient. New York's motor fuel, petroleum business, and sales tax relief for fishing-vessel fuel is reserved for people genuinely in the business of catching fish to sell, using a boat that spends more than half its time on that commercial harvesting. A recreational angler who occasionally sells fish — even one holding a state license or federal tuna permit — doesn't qualify.

Expect a facts-and-circumstances test, not a bright line at the license. The Department weighs how much time, money, and effort go into the fishing business and how much of the owner's total income comes from selling fish, plus whether the vessel is used predominantly (over 50%) for commercial harvesting versus sport fishing. Keep records that actually show commercial operation — catch sold, income from sales, days fished commercially — because the burden is on proving the business and predominant-use facts.

This is also a reminder about what an Advisory Opinion can and can't do. It sets out how the statutes apply; it will not resolve a genuinely factual "does my boat qualify" question. If your situation is close to the line, that's exactly the kind of fact-specific call to work through with a tax professional.

Common questions

Q: Does holding a New York commercial fishing license make my boat a commercial fishing vessel for the fuel tax refund?
A: No. The license is only one factor. You must be a "commercial fisherman" in the business of harvesting fish for sale, and the vessel must be used directly and predominantly (more than 50%) in that harvesting — not predominantly for sport fishing.

Q: What does "predominantly" mean here?
A: More than 50% of the vessel's use, per TSB-M-85(17)S. A boat used mostly for sport fishing is excluded from the commercial-fishing-vessel exemption even if it sells some catch.

Q: Why didn't the Department just say yes or no?
A: Whether a specific vessel and owner qualify is a factual question. An Advisory Opinion only applies the law to a stated set of facts (Tax Law § 171(24); 20 NYCRR 2376.1(a)); it can't make that factual finding.

Q: Can fuel for a pleasure or recreational motor boat ever get the Article 12-A refund?
A: No. Tax Law § 289-c.3(a) expressly denies reimbursement of the motor fuel tax for fuel used in a pleasure or recreational motor boat.

Citations and references

Statutes and regulations:

• Tax Law § 289-c.3(a) — Article 12-A motor fuel tax refund; no reimbursement for fuel used in a pleasure or recreational motor boat
• Tax Law § 301-c(g) — Article 13-A petroleum business tax reimbursement for fuel used in commercial fishing vessels
• Tax Law § 300(i) — definition of "commercial fisherman"; § 300(j) — definition of "commercial fishing vessel" (used directly and predominantly in harvesting fish for sale)
• Tax Law § 1105(a), § 1105(c)(3)(vii) — sales tax; services to fishing vessels within § 1115(a)(24)
• Tax Law § 1115(a)(24) — sales/use tax exemption for fishing vessels used directly and predominantly in harvesting fish for sale; excludes vessels used predominantly for sport fishing
• Tax Law § 171(24); 20 NYCRR 2376.1(a) — an Advisory Opinion applies the law to a specified set of facts

Related guidance cited: TSB-M-85(17)S (Oct. 7, 1985), 1985 Legislation — Chapter 799, Sales Tax Exemption for Commercial Fishing Vessels ("predominantly" means more than 50%).

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/multitax/a95_3m_40s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-95
(3) Miscellaneous Tax
(40) Sales Tax
October 30, 1995

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. Z950328A

On March 28, 1995, a Petition for Advisory Opinion was received from Montauk Marine
Basin, Box 610, Montauk, New York 11954.
The issue raised by Petitioner, Montauk Marine Basin, is whether a vessel with a license to
fish and sell off a portion of its catch is entitled to a refund of the taxes imposed under Articles 12-A,
13-A, 28 and 29 of the Tax Law as they relate to fuel used in a vessel engaged in commercial fishing.
Petitioner alleges that a vast majority of the sport fishing fleet that uses the Montauk Harbor
are licensed to catch and sell their fish, although most are simply pleasure boats and do not make
their living on the water. Petitioner contends that many are affluent persons on million dollar sport
fishing boats with crews. Petitioner claims that to receive a commercial fishing license in New York
State one must pay $100.00 if he or she is a resident or $250.00 if he or she is a nonresident. There
is no requirement that the licensee own a boat. Petitioner further alleges that a Federal tuna permit
can be obtained by a boat owner by completing a short application and remitting a $25.00 fee.
Subdivision 3(a) of Section 289-c of the Tax Law pertaining to the refund of taxes paid on
gasoline and similar motor fuels imposed under Article 12-A provides as follows:
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
state including waterways bordering on the 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)
Subdivision (g) of Section 301-c of the Tax Law pertaining to the reimbursement of
petroleum business taxes imposed under Article 13-A provides as follows:

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TSB-A-95
(3) Miscellaneous Tax
(40) Sales Tax
October 30, 1995
(g) Diesel motor fuel and motor fuel used in the operation of commercial
fishing vessels. Diesel motor fuel or motor fuel purchased in this state by a
commercial fisherman at retail where (1) such diesel motor fuel or such motor fuel
is delivered by a pump equipped with a hose directly into the fuel tank of a
commercial fishing vessel to be used as fuel in the operation of such vessel for the
purpose of engaging in the commercial harvesting of fish for sale; and (2) such vessel
is operated by a commercial fisherman; but only where (i) the tax imposed pursuant
to this article has been paid with respect to such diesel motor fuel or such motor fuel
and the entire amount of such tax has been absorbed by such purchaser and, (ii) such
purchaser possesses documentary proof satisfactory to the commissioner evidencing
the absorption by it of the entire amount of the tax imposed pursuant to this article.
Provided, however, that the commissioner shall require such documentary proof to
qualify for any reimbursement of tax provided by this section as the commissioner
deems appropriate.
Section 300 of the Tax Law provides, in part, as follows:
(i) "commercial fisherman" means a person licensed by an appropriate
federal or state agency for the purpose of engaging in the commercial harvesting of
fish and who is engaged in the business of harvesting fish for sale. In determininK
whether or not a business is being conducted consideration shall be given to the
amount of time, capital and effort that is consumed by, as well as the percent of total
gross income from all sources derived from the harvesting of fish for sale.
(j) "commercial fishing vessel" means a vessel which is used directly and
predominantly in the harvesting of fish for sale and, if such vessel is required to be
documented with the United States Coast Guard, it is currently documented with the
United States Coast Guard and has a current fisheries endorsement on such
documentation. (emphasis added)
Section 1105 of the Tax Law pertaining to the sales tax imposed by Articles 28 and 29
provides, in part, as follows:
Sec. 1105. Imposition of sales tax.- ... there is hereby imposed and there shall
be paid a tax ... upon:
(a) The receipts from every retail sale of tangible personal property, except
as otherwise provided in this article.
*

*

*

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TSB-A-95
(3) Miscellaneous Tax
(40) Sales Tax
October 30, 1995
(c) The receipts from every sale, except for resale, of the following services:
*

*

*

(3) Installing tangible personal property, excluding a mobile home, or
maintaining, servicing or repairing tangible personal property, including a mobile
home, not held for sale in the regular course of business, whether or not the services
are performed directly or by means of coin-operated equipment or by any other
means, and whether or not any tangible personal property is transferred in
conjunction therewith, except:
*

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(vii) such services rendered with respect to fishing vessels and property used
by or purchased for such vessels as such vessels are specified in paragraph twenty­
four of subdivision (a) of section eleven hundred fifteen of this article.
Section 1115 of the Tax Law pertaining to the exemptions from sales and use taxes under
Articles 28 and 29 provides, in part, as follows:
Sec. 1115. Exemptions from sales and use taxes.--(a) Receipts from the
following shall be exempt from the tax on retail sales imposed under subdivision (a)
of section eleven hundred five and the compensating use tax imposed under section
eleven hundred ten:
*

*

*

(24) Fishing vessels used directly and predominantly in the harvesting of fish
for sale, and property used by or purchased for the use of such vessels for fuel,
provisions, supplies, maintenance and repairs. For the purpose of this paragraph the
term fishing vessel shall not include any vessel used predominantly for sport fishing
purposes. (emphasis added)
Technical Services Bureau Memorandum TSB-M-85(17)S dated October 7, 1985, entitled
1985 Legislation-Chapter 799, Sales Tax Exemption for Commercial Fishing Vessels provides that
the term "fishing vessel" applies only to a vessel engaged directly and predominantly in the
harvesting of fish for sale and not to a fishing vessel used predominantly for sport fishing purposes.
The term "predominantly" means more than 50%.
A determination in the instant case as to whether a vessel with a license to fish and sell a
portion of its catch is entitled to a refund of the taxes imposed under Articles 12-A, 13-A, 28 and 29
of the Tax Law is a factual question which cannot be determined in an Advisory Opinion. An
Advisory Opinion merely sets forth the applicability of pertinent statutory and regulatory provisions

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TSB-A-95
(3) Miscellaneous Tax
(40) Sales Tax
October 30, 1995
to a "specified set of facts." Tax Law, Section 171, subd. twenty-fourth; 20 NYCRR 2376.1(a).
In making its determination the Tax Department will consider collectively the provisions of
Articles 12-A, 13-A, 28 and 29 as they apply to commercial fishermen and commercial fishing
vessels, as well as, TSB-M-85(17)S, supra. The criteria to be met include, but are not limited to, the
fact that the fisherman falls within the definition of a commercial fisherman as set forth in Section
300 of the Tax Law taking into consideration the amount of time, capital and effort that are
consumed by the fisherman, as well as the percent of total gross income from all sources such
fisherman has derived from the harvesting of fish for sale. In addition, the Tax Department will
consider whether the commercial fishing vessel was used directly and predominantly (more than
50%) in the harvesting of fish for sale. Fishing vessels used directly and predominantly in the
harvesting of fish for sale shall not include any vessel used predominantly (more than 50%) for sport
fishing. If the fisherman and vessel do not fall within the provisions of Articles 12-A, 13-A, 28 and
29 as they apply to vessels engaged in commercial fishing, such fisherman will not be entitled to a
reimbursement of the taxes paid on fuel used in such vessel.

DATED:

October 30, 1995

/s/
DORIS S. BAUMAN
Director
Technical Services Bureau

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