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Cuomo: change in fuel-tax law will improve cash flow for petroleum distributors

Albany, NY, August 14, 2013 Gov. Andrew Cuomo has announced a change in state tax law he says will benefit small-business operators selling heating oil and certain highway diesel-motor fuels.

The change, which Cuomo signed into law earlier this year, took effect this month.

“By updating the state’s fuel-tax law, we are addressing an unnecessary financial burden on small businesses,” Cuomo said in a news release.

As the governor’s office explains it, petroleum distributors generally buy a large volume of product and store it for extended periods of time in New York–based fuel terminals.

Previously, distributors had to pay the appropriate fuel taxes at the time they purchased the fuel. Even though the distributor pays the fuel taxes at the time of the initial bulk purchase, the distributor often doesn’t sell the fuel to a consumer until months later, the governor’s office said.

Under this change, distributors will pay the fuel taxes when the product is loaded into a fuel truck and removed from the storage terminal.

Distributors “applaud this change,” Thomas Peters, CEO of the Empire State Petroleum Association (ESPA) said in the news release.

“Before, the distributor had to pre-pay all that tax upfront, but couldn’t collect it until a sale was made, which might be many months down the road. It’s a question of improving a business’s cash position, and this is a cash-flow victory,” Peters said.

ESPA, headquartered in Clifton Park, north of Albany, is a trade association representing 300 petroleum marketers throughout New York.

ESPA estimates that petroleum marketers provide heating oil service to more than 2.6 million households in New York, as well as supplying gas and diesel fuel for the 8.4 million registered automobiles and 1.3 million trucks and buses in New York.

Click here to read more from the Central New York Business Journal

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