SN 95(6)

Legislative Amendments Affecting the
Petroleum Products Gross Earnings Tax

PURPOSE: The purpose of this Special Notice is to describe amendments made to the petroleum products gross earnings tax during the 1995 session of the Connecticut General Assembly.

STATUTORY AUTHORITY: 1995 Conn. Pub. Acts 172, §§3 and 4, and 1995 Conn. Pub. Acts 26, §§29 through 31.

EFFECTIVE DATE: Effective July 1, 1995 and applicable to calendar quarters commencing on or after July 1, 1995.

PETROLEUM PRODUCTS GROSS EARNINGS TAX TREATMENT OF PROPANE GAS: Section 3 of 1995 Conn. Pub. Acts 172 exempts gross earnings from the sale of propane gas as motor fuel from the petroleum products gross earnings tax. Specifically, the act amends the definition of "gross earnings" in Conn. Gen. Stat. §12-587(a)(3) so that "'gross earnings' ... does not include earnings in a taxable year commencing prior to January 1, 2000, from the sale of propane gas as a fuel for a motor vehicle ... ."

CERT 116, Exempt Petroleum Products Certificate, will be modified to reflect this amendment. The Department will issue an Announcement when CERT 116, as modified, is available.

Additionally, Section 3 of 1995 Conn. Pub. Acts 172 amends the definition of "petroleum products" in Conn. Gen. Stat. §12-587(a)(4)(C). Propane gas need no longer be "sold in containers for use in residential heating" or be "sold and delivered to a stationary storage tank with a capacity of not more than 1000 gallons for use in residential heating" in order to be excluded from the definition of "petroleum products." Instead, the act now provides that, in order to be excluded from the definition of "petroleum product", propane gas must be "used exclusively for heating purposes . . . ."

PETROLEUM PRODUCTS GROSS EARNINGS TAX TREATMENT OF KEROSENE: Section 3 of 1995 Conn. Pub. Acts 172 also amends the definition of "petroleum products" in Conn. Gen. Stat. §12-597(a)(4)(B). In order to be excluded from the definition of "petroleum products," kerosene that is to be used exclusively for heating purposes need no longer be delivered "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 CFR §48.4104-1."

CHANGES TO INTEREST PAYABLE: 1995 Conn. Pub. Acts 26 reduces the interest payable on late payments and audit assessments from 1 2/3 % to 1% per month of fraction thereof. The act also reduces the interest payable on refunds from 3/4 % to 2/3 % per month or fraction thereof.

EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in State or federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners. 

SN 95(6)
Petroleum Products Gross Earnings Tax
Issued: 6/28/95