SN 91(11)

Petroleum Products Gross Earnings Tax Changes

This publication has been cited in Ruling 95-5

PURPOSE: This Special Notice describes changes affecting the Petroleum Products Gross Earnings Tax Act made by 1991 Conn. Pub. Acts 3, §146 (June Spec. Sess.). This Special Notice is intended to provide general information to taxpayers and should not be considered a ruling or regulation issued by the Department of Revenue Services.

EFFECTIVE DATE: Effective upon issuance and applicable to sales and purchases of petroleum products made on or after October 1, 1991.

STATUTORY AUTHORITY: 1991 Conn. Pub. Acts 3, §146 (June Spec. Sess.), amending Conn. Gen. Stat. §12-587.

CHANGES:

For the calendar quarter commencing on October 1, 1991 and thereafter, gross earnings of companies that are engaged in the refining or distribution (or both) of petroleum products from the first sale within Connecticut of petroleum products are taxed at the rate of 5%. [PRIOR LAW: Since the passage of 1989 Conn. Pub. Acts 373, the tax has been imposed at the rate of 3%.]

For the calendar quarter commencing on October 1, 1991 and thereafter, any person importing or causing to be imported into Connecticut petroleum products for such person's own consumption or use (including the sale of such imported petroleum products in the regular course of business) must pay a quarterly tax at the rate of 5% of the consideration given or contracted to be given for such petroleum products if the consideration given or contracted to be given for all such deliveries during the calendar quarter for which the tax is to be paid exceeds $100,000. [PRIOR LAW: Since the passage of 1982 Conn. Pub. Acts 157, §1, the tax has only been imposed on persons making the first sale of petroleum products inside Connecticut.]

EXAMPLES:

Example 1: A company purchases outside Connecticut petroleum products that it imports into Connecticut. The consideration given or contracted to be given by the company for its purchases during the calendar quarter exceeds $100,000. The purchased products are consumed by the company inside Connecticut. The company is subject to the petroleum products gross earnings tax.

Example 2: The facts are the same as in Example 1 except that the company sells the products in the regular course of its business during the same calendar quarter. The company is subject to and pays the petroleum products gross earnings tax on its gross earnings derived from such sales. The company's importation of the petroleum products will not also be subject to the tax.

Example 3: The facts are the same as in Example 1 except that the company purchases inside Connecticut the petroleum products that is causes to be imported. Unless the seller is subject to and has paid the petroleum products gross earnings tax on the products, the company is subject to the petroleum products gross earnings tax. 

SN 91(11)
Petroleum Products Gross Earnings Tax
Issued 9/91
TPS/0008/891