Page 18: of Maritime Reporter Magazine (May 2022)

Legal Beat

Fuel Tax Repeal Victory in

New York State he New York State Petroleum Business Tax (PBT), to local elected of? cials to muster support for legislative change.

Article 13-A levies a tax on fuel consumption of In early 2021 it was evident that the present statute did not pro- commercial vessels operating on the waters of vide an accurate process to measure the tax due and should be re-

T New York State. The PBT has long been a source pealed. AWO and TBHCA then engaged State Senators, Savino of contention for operators of tug boats and towing vessels and Lanza and Assemblyman Cusick of Staten Island, request- transiting New York State waters because of the dif? culty to ing that they introduce legislation to repeal the burdensome PBT accurately calculate the tax due the state. This led to many levied on the towing industry. AWO also arranged a meeting be- long drawn out audits of vessel operators by the state, result- tween AWO and TBHCA leadership and the Governor’s Budget ing in unacceptable additional taxes, interest and ? nes. Director in October of 2021 in which it was requested that the

Over the years, multiple efforts were made by industry PBT Article 13-A be repealed in the 2023 state budget.

groups to repeal the PBT legally without success. The ? rst at- In January of 2023, legislation was introduced in the state tempt at a cooperative solution was led by The American Wa- senate and assembly to exempt commercial tug boats and tow terways Operators (AWO), in conjunction with the New York boats from the state’s Petroleum Business Tax. The exemption

State Department of Taxation and Finance (DTF) and the tow- was also entered into the Governor’s 2023 budget.

ing industry developed an alternative method of calculating When Governor Hochul signed the state budget into law in

PBT Taxes based on a per trip tax, the PT-350 Schedule A. April of 2022, it contained the PBT Exemption which will go

The “Trip Method” was adopted by many vessel operators but into effect September 1, 2022. The hard work of the Tow Boat it did not solve the issue of accurately calculating each vessels and Harbor Carriers Association and The American Waterways fuel consumption while operating in New York State waters. Operators on behalf of their members, ? nally came to fruition.

In June of 2018, in response to the frustration of their mem- The cooperation of the New York State Department of Taxation bers, the Tow Boat and Harbor Carriers Association (TBHCA) and Finance and the efforts of our elected of? cials is a testament took on the task of revising or repealing the PBT. After opening to the ideals of government working with industry in the best a dialogue with the NYS DTF in June of 2018, an October 2018 interest of the citizens of the state. The marine transportation meeting was scheduled in Albany between the department and industry is vital to New York State, employing mariners and

TBHCA leadership. The meeting kicked off an effort between support service workers while contributing billions of dollars industry and the state to identify the problems with the statute in state revenue. The Marine Transportation System provides and make the needed changes through DTF or legislatively. The vital goods and services throughout the state and will be at the

TBHCA surveyed members regarding the problems they had forefront of our emerging offshore wind energy industry. faced calculating the tax and in the most recent round of audits.

In January of 2019 they presented the results to DTF, the TBHCA outlining the ? aws in both the consumption and trip methods.

The Author

After further correspondence, it was apparent that the changes

Bowie needs were beyond what the scope of DTF. In a July 2019 con-

John Bowie is General Manager, Vane ference call, the DTF recommended TBHCA work with the state

Brothers Company. Bowie is Past

Senate/Assembly to amend the PBT. During this time, TBHCA

Chairman TBHCA and Vice President partnered with the AWO to work jointly on the PBT issue. of the Maritime Association of the Port

The next year TBHCA and AWO worked with the DTF in an of New York New Jersey.

attempt to develop a workable tax statute, and began reaching out 18 Maritime Reporter & Engineering News • May 2022

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