Substitute House Bill No. 6863
          Substitute House Bill No. 6863

              PUBLIC ACT NO. 97-281


AN  ACT  CONCERNING  THE  GROSS  EARNINGS  TAX  ON
CERTAIN FUEL CONSUMED  BY INDUSTRIAL CUSTOMERS AND
VESSELS PRIMARILY ENGAGED  IN  INTERSTATE COMMERCE
AND EXEMPTING DIESEL  FUEL SOLD FOR USE IN CERTAIN
GENERATORS FROM THE MOTOR VEHICLE FUELS TAX.


    Be it enacted  by  the  Senate  and  House  of
Representatives in General Assembly convened:
    Section  1.  Section  12-587  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) As used  in  this  chapter:  (1) "Company"
includes  a  corporation,   partnership,   limited
partnership,   association,  individual   or   any
fiduciary thereof; (2)  "quarterly period" means a
period of three  calendar months commencing on the
first day of  January,  April, July or October and
ending on the  last  day of March, June, September
or December, respectively;  (3)  "gross  earnings"
means those earnings  derived  from the first sale
within this state of a petroleum product, but 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  and  (4)
"petroleum products" means  those  products  which
contain or are  made from petroleum or a petroleum
derivative, but [shall]  DOES  not  mean  (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 or to  be  used  in  a commercial fishing
vessel which vessel  qualifies  for  an  exemption
pursuant to section 12-412, (B) kerosene, commonly
known  as  number  1  oil,  used  exclusively  for
heating purposes, provided  delivery  is  of  both
number 1 and  number 2 oil, and via a truck with a
metered delivery ticket  to a residential dwelling
or to a  centrally  metered system serving a group
of   residential  dwellings,   (C)   the   product
identified as propane  gas  to be used exclusively
for heating purposes,  or  (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. FOR CALENDAR QUARTERS COMMENCING ON OR AFTER
JULY 1, 2002, PETROLEUM PRODUCTS SHALL NOT INCLUDE
GRADE NUMBER 6 FUEL OIL, AS DEFINED IN REGULATIONS
ADOPTED PURSUANT TO  SECTION  16a-22c,  TO BE USED
EXCLUSIVELY BY A COMPANY WHICH, IN ACCORDANCE WITH
CENSUS DATA CONTAINED  IN  THE STANDARD INDUSTRIAL
CLASSIFICATION  MANUAL, UNITED  STATES  OFFICE  OF
MANAGEMENT AND BUDGET,  1987  EDITION, IS INCLUDED
IN CODE CLASSIFICATIONS  2000  TO 3999, INCLUSIVE,
OR NUMBER 2  HEATING  OIL  USED  EXCLUSIVELY  IN A
VESSEL PRIMARILY ENGAGED  IN  INTERSTATE COMMERCE,
WHICH  VESSEL QUALIFIES  FOR  AN  EXEMPTION  UNDER
12-412.
    (b)   [Any]  (1)   EXCEPT   AS   PROVIDED   IN
SUBDIVISION (2) OF  THIS  SUBSECTION,  ANY company
which is engaged  in the refining or distribution,
or  both,  of   petroleum   products   and   which
distributes such products  in this state shall pay
a quarterly tax  at  the  rate of five per cent of
its  gross  earnings  derived  from  the  sale  of
petroleum products within this state. Each company
shall on or  before the last day of the month next
succeeding each quarterly  period  render  to  the
commissioner, under oath  of  its treasurer or the
person performing the duties of treasurer or of an
authorized agent or  officer,  a  return  on forms
prescribed  or  furnished   by  the  commissioner,
including the amount  of  gross  earnings  derived
from the sale  of  petroleum  products within this
state for the  quarterly  period  and  such  other
facts as the  commissioner  may  require  for  the
purpose of making any computation required by this
chapter.
    (2) THE RATE  OF  TAX DERIVED FROM THE SALE OF
GRADE NUMBER 6 FUEL OIL, AS DEFINED IN REGULATIONS
ADOPTED PURSUANT TO  SECTION  16a-22c,  TO BE USED
EXCLUSIVELY BY A COMPANY WHICH, IN ACCORDANCE WITH
CENSUS DATA CONTAINED  IN  THE STANDARD INDUSTRIAL
CLASSIFICATION  MANUAL, UNITED  STATES  OFFICE  OF
MANAGEMENT AND BUDGET,  1987  EDITION, IS INCLUDED
IN CODE CLASSIFICATIONS  2000  TO 3999, INCLUSIVE,
OR NUMBER 2  HEATING  OIL  USED  EXCLUSIVELY  IN A
VESSEL PRIMARILY ENGAGED  IN  INTERSTATE COMMERCE,
WHICH  VESSEL QUALIFIES  FOR  AN  EXEMPTION  UNDER
12-412 SHALL BE: (A) FOUR PER CENT WITH RESPECT TO
CALENDAR QUARTERS COMMENCING  ON  OR AFTER JULY 1,
1998, AND PRIOR  TO  JULY  1,  1999; (B) THREE PER
CENT WITH RESPECT  TO CALENDAR QUARTERS COMMENCING
ON OR AFTER  JULY  1,  1999,  AND PRIOR TO JULY 1,
2000; (C) TWO  PER  CENT  WITH RESPECT TO CALENDAR
QUARTERS COMMENCING ON  OR AFTER JULY 1, 2000, AND
PRIOR TO JULY  1,  2001; AND (D) ONE PER CENT WITH
RESPECT  TO CALENDAR  QUARTERS  COMMENCING  ON  OR
AFTER JULY 1,  2001,  AND  PRIOR  TO JULY 1, 2002.
GROSS EARNINGS FROM  SALES  AS  PROVIDED  IN  THIS
SUBDIVISION SHALL NOT BE SUBJECT TO THE PROVISIONS
OF THIS CHAPTER  WITH RESPECT TO CALENDAR QUARTERS
COMMENCING ON OR AFTER JULY 1, 2002.
    (c) Any company  which imports or causes to be
imported into this  state  petroleum  products for
its use and  consumption,  other  than  a  company
which is subject  to and which has paid the tax on
such  petroleum  products   in   accordance   with
subsection  (b)  of  this  section,  shall  pay  a
quarterly tax at  the rate of five per cent of the
consideration given or  contracted to be given for
such petroleum product  if the consideration given
or contracted to  be given for all such deliveries
during the quarterly  period for which such tax is
to be paid  exceeds  one hundred thousand dollars.
For  the  purposes   of   this  subsection,  "use"
includes the sale  of  imported petroleum products
in the regular  course  of  business.  Fuel in the
fuel supply tanks  of  a motor vehicle, which fuel
tanks are directly  connected to the engine, shall
not be considered  a  delivery for the purposes of
this subsection.
    (d) The amount  of  tax  reported to be due on
such return shall  be due and payable on or before
the last day  of  the  month  next  succeeding the
quarterly  period.  The   tax  imposed  under  the
provisions of this chapter shall be in addition to
any  other tax  imposed  by  this  state  on  such
company.
    (e) For the  purposes  of  this  chapter,  the
gross  earnings of  any  producer  or  refiner  of
petroleum  products operating  a  service  station
along the highways  or  interstate highways within
the  state  pursuant   to   a  contract  with  the
Department  of  Transportation   or   operating  a
service station which  is  used  as  a training or
test  marketing center  under  the  provisions  of
subsection  (b)  of   section  14-344d,  shall  be
calculated by multiplying  the volume of petroleum
products delivered by  any  producer or refiner to
any such station  by  such producer's or refiner's
dealer tank wagon  price or dealer wholesale price
in the area of the service station.
    Sec. 2. Subsection  (a)  of  section 12-458 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (a)(1) Each distributor  shall,  on  or before
the  twenty-fifth day  of  each  month,  render  a
return to the  commissioner.  Each return shall be
signed by the  person  required to file the return
or  by  his  authorized  agent  but  need  not  be
verified by oath.  Any return required to be filed
by a corporation  shall be signed by an officer of
such corporation or  his  authorized  agent.  Such
return shall state  the  number of gallons of fuel
sold or used  by him during the preceding calendar
month,  on  forms   to   be   furnished   by   the
commissioner,  and  shall   contain  such  further
information as the  commissioner  shall prescribe.
The commissioner may  make  public  the  number of
gallons of fuel  sold  or used by the distributor,
as contained in  such  report, notwithstanding the
provisions of section  12-15 or any other section.
For purposes of  this  section,  fuel  sold  shall
include but not be limited to the transfer of fuel
by a distributor into a receptacle from which fuel
is supplied or  intended  to  be supplied to other
than such distributor's motor vehicles.
    (2)  On said  date  and  coincident  with  the
filing of such  return  each distributor shall pay
to  the  commissioner   for  the  account  of  the
purchaser or consumer a tax on each gallon of such
fuels  sold or  used  in  this  state  during  the
preceding calendar month  of  twenty-six  cents on
and after January  1,  1992, twenty-eight cents on
and after January  1,  1993,  twenty-nine cents on
and after July  1, 1993, thirty cents on and after
January 1, 1994,  thirty-one  cents  on  and after
July  1,  1994,  thirty-two  cents  on  and  after
January 1, 1995,  thirty-three  cents on and after
July  1, 1995,  thirty-four  cents  on  and  after
October 1, 1995,  thirty-five  cents  on and after
January 1, 1996,  thirty-six  cents  on  and after
April 1, 1996,  thirty-seven  cents  on  and after
July 1, 1996,  thirty-eight  cents  on  and  after
October 1, 1996,  and  thirty-nine  cents  on  and
after January 1,  1997; and in lieu of said taxes,
each distributor shall pay a tax on each gallon of
gasohol, as defined  in section 14-1, sold or used
in  this  state  during  such  preceding  calendar
month, of twenty-five  cents  on and after January
1, 1992, twenty-seven  cents  on and after January
1, 1993, twenty-eight  cents  on and after July 1,
1993, twenty-nine cents  on  and  after January 1,
1994, thirty cents  on  and  after  July  1, 1994,
thirty-one cents on  and  after  January  1, 1995,
thirty-two  cents  on  and  after  July  1,  1995,
thirty-three cents on  and  after October 1, 1995,
thirty-four cents on  and  after  January 1, 1996,
thirty-five cents on  and  after  April  1,  1996,
thirty-six  cents  on  and  after  July  1,  1996,
thirty-seven cents on  and  after October 1, 1996,
and thirty-eight cents  on  and  after  January 1,
1997; and, in lieu of such rate, on each gallon of
diesel fuel, propane  or  natural gas sold or used
in this state  on  and  after  September  1, 1991,
during such preceding  calendar month, of eighteen
cents.
    (3) Said tax shall not be payable on such fuel
as may have  been  (A)  sold to the United States,
(B) sold to  a municipality of this state, for use
by any contractor  performing  a  service for such
municipality  in  accordance   with   a  contract,
provided such fuel  is  used  by  such  contractor
exclusively for the  purposes of and in accordance
with such contract,  (C) sold to a municipality of
this state, a  transit  district of this state, or
this state, at  other  than  a  retail outlet, for
governmental  purposes and  for  use  in  vehicles
owned and operated, or leased and operated by such
municipality, such transit district or this state,
(D) sold to  a person licensed as a distributor in
this state under  section  12-456, (E) transferred
from  storage within  this  state  to  some  point
without this state,  (F)  sold  to the holder of a
permit issued under  section  12-458a  for sale or
use without this  state, (G) sold to the holder of
a permit issued  under  subsection (63) of section
12-412, provided (i)  such  fuel  is  not  used in
motor vehicles licensed or required to be licensed
to operate upon the public highways of this state,
unless  such  fuel   is  used  in  motor  vehicles
registered exclusively for  farming purposes, (ii)
such fuel is  not  delivered, upon such sale, to a
tank in which  such person keeps fuel for personal
and farm use and (iii) an affidavit, prescribed as
to form by  the  Commissioner of Revenue Services,
affirming that such  fuel  is used exclusively for
farming purposes, is  submitted  by such person to
the distributor, (H)  sold  exclusively to furnish
power  for  an  industrial  plant  in  the  actual
fabrication of finished  products  to  be sold, or
for an agricultural production process, or for the
fishing industry, (I) sold exclusively for heating
purposes, [or] (J)  sold  exclusively  to  furnish
gas, water, steam  or electricity, if delivered to
consumers through mains,  lines  or  pipes, OR (K)
DIESEL FUEL SOLD  EXCLUSIVELY  FOR USE IN PORTABLE
POWER SYSTEM GENERATORS  THAT  ARE LARGER THAN ONE
HUNDRED FIFTY KILOWATTS.
    (4) Each distributor,  when  making  a taxable
sale, shall furnish  to  the  purchaser an invoice
showing  the  quantities   of   fuel   sold,   the
classification  thereof under  the  provisions  of
this chapter and  the  amount of tax to be paid by
the distributor for  the  account of the purchaser
or consumer.
    (5) If any distributor fails to pay the amount
of tax reported to be due on its report within the
time  specified  under   the  provisions  of  this
section, there shall be imposed a penalty equal to
ten per cent  of  such  amount  due and unpaid, or
fifty dollars, whichever is greater. The tax shall
bear interest at  the  rate  of  one  per cent per
month or fraction thereof from the due date of the
tax until the date of payment.
    (6) If no  return  has been filed within three
months  after  the   time   specified   under  the
provisions of this  chapter,  the commissioner may
make such return at any time thereafter, according
to the best  information  obtainable  and the form
prescribed.  There  shall  be  added  to  the  tax
imposed upon the  basis  of  such return an amount
equal to ten  per  cent  of  such  tax,  or  fifty
dollars, whichever is  greater. The tax shall bear
interest at the  rate of one per cent per month or
fraction thereof from  the due date of such tax to
the date of payment.
    (7)  Subject  to  the  provisions  of  section
12-3a, the commissioner  may  waive all or part of
the penalties provided  under this chapter when it
is proven to  his satisfaction that the failure to
pay any tax  was  due  to reasonable cause and was
not intentional or due to neglect.
    (8) A distributor  who  is  exclusively making
sales of fuel  on  which  the  tax imposed by this
chapter is not  payable  may  be permitted to file
reports, under oath  or  affirmation,  on  a  form
prescribed by said  commissioner,  as specified in
regulations  adopted  in   accordance   with   the
provisions  of chapter  54.  The  regulations  may
authorize reports to  be submitted less frequently
than monthly but not less frequently than annually
if the commissioner determines that enforcement of
this section would  not  be  adversely affected by
less frequent filings. The report shall detail (A)
the persons from  whom the fuel was purchased, (B)
the persons to  whom,  the quantities in which and
the dates on which such fuel was sold, and (C) any
other   information  deemed   necessary   by   the
commissioner.
    Sec. 3. This  act  shall  take  effect July 1,
1997,  and  be  applicable  to  calendar  quarters
commencing  on or  after  said  date  except  that
section 1 shall  take  effect July 1, 1998, and be
applicable to calendar  quarters  on or after said
date.

Approved June 26, 1997