This information is not current and is being provided for reference purposes only
Petroleum Products Gross Earnings Tax Exemptions
This publication has been superseded by PS 94(4.1)
PURPOSE: The purpose of this Policy Statement is to establish a new policy for administering that part of the Petroleum Products Gross Earnings Tax that relates to exempt petroleum products.
BACKGROUND: The Petroleum Products Gross Earnings Tax; Conn. Gen. Stat. §12-587, et seq.; imposes a tax on the gross earnings derived from the sale or use of petroleum products within Connecticut. Conn. Gen. Stat. § 12-587(a)(4), as amended by 1993 Conn. Pub. Acts 74 and 1994 Conn. Pub. Acts 101, § 2, defines "petroleum products" as "those products which contain or are made from petroleum or a petroleum derivative." That provision also excludes certain products, hereafter "Exempt Petroleum Products," from the definition of "petroleum products."
In the past, the Department has required the Petroleum Products Gross Earnings Tax to be paid on the gross earnings derived from the sale or use within Connecticut of Exempt Petroleum Products; the Department then refunded tax paid on such products upon filing a claim for refund (Form AU-742 or AU-743). The Department has determined that this policy should be replaced with a new policy.
STATUTORY AUTHORITY: Conn. Gen. Stat. § 12-587(a)(4), as amended by 1993 Conn. Pub. Acts 74 and 1994 Conn. Pub. Acts 101, § 2.
EFFECTIVE DATE: This Policy Statement shall take effect July 1, 1994.
EXEMPT PETROLEUM PRODUCTS: Conn. Gen. Stat. § 12-587(a)(4), as amended by 1993 Conn. Pub. Acts 74 and 1994 Conn. Pub. Acts 101, § 2, provides that the term "petroleum products" shall not include:
(A) the product designated by the American Society for Testing and Materials as "Specification for Heating Oil D396-69", commonly known as number 2 heating oil, to be used exclusively for heating purposes;
(B) kerosene, commonly known as number 1 oil, used exclusively for heating purposes, provided delivery is by a supplier who has obtained a certificate of registry from the Internal Revenue Service in accordance with the provisions of 26 U.S.C. §4101 and 26 C.F.R. §48.4104-1, of both number 1 and number 2 oil, and via a truck with a metered delivery ticket to a residential dwelling or a centrally-metered system serving a group of residential dwellings;
(C) the product identified as propane gas, when sold in containers for use in residential heating or when sold and delivered to a stationary storage tank with a capacity of not more than one thousand gallons for use in residential heating;
(D) bunker fuel oil, intermediate fuel, marine diesel oil and marine gas oil for use in any vessel having a displacement exceeding four thousand dead weight tons.
These products are referred to in this Policy Statement and in CERT-116 as "Exempt Petroleum Products."
PURCHASES OF EXEMPT PETROLEUM PRODUCTS BY COMPANIES: Effective July 1, 1994, a company that purchases Exempt Petroleum Products for resale must present a CERT-116 (Exempt Petroleum Products Certificate) to the seller to establish that charges for such products are not subject to the Petroleum Products Gross Earnings Tax.
By accepting a properly completed CERT-116, the seller is relieved of the burden of proving that the sale of an Exempt Petroleum Product was not subject to Petroleum Products Gross Earnings Tax. However, the seller is relieved of that burden only if the seller has no knowledge of facts that give rise to a reasonable inference that the product sold is not an Exempt Petroleum Product.
In addition, the seller shall mark the bills, invoices or records covering all purchases made under a CERT-116 with the words "Exempt Petroleum Products Certificate" to indicate that an exempt purchase has occurred. The seller must maintain copies of such bills, invoices or records, as well as a copy of the CERT-116, for at least three years from the date that the Exempt Petroleum Products were purchased.
When a company presents an Exempt Petroleum Products Certificate upon the purchase of a product reasonably believed to be an exempt petroleum product but later determines that such product is subject to the tax, the company is responsible for paying the Petroleum Products Gross Earnings Tax on such product. The amount of tax due shall be calculated on the gross earnings derived from the company's first sale of such products for a non-exempt purpose. The tax is due, with Form OP-161, on or before the last day of the month next succeeding the quarterly period in which such non-exempt petroleum products were sold.
REFUND CLAIMS: When a company purchases petroleum products and pays the gross earnings tax imposed thereon but later determines that such products are actually exempt petroleum products, the company may file a Form AU-742 or AU-743 to claim a refund of Petroleum Products Gross Earnings Tax paid on Exempt Petroleum Products.
EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current Department policy or practice affecting the liability of taxpayers. A Policy Statement indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners.
EFFECT ON OTHER DOCUMENTS: None.
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Excise Office Section of the Department of Revenue Services at 860-541-3225.
Petroleum Products Gross Earnings Tax