2015 Connecticut General Statutes
Title 12 - Taxation
Chapter 227 - Sale of Petroleum Products Gross Earnings Tax
Section 12-587 - Definitions. Imposition of tax. Rate. Returns and filing; due date.

(a)(1) As used in this chapter: (A) “Company” includes a corporation, partnership, limited partnership, limited liability company, limited liability partnership, association, individual or any fiduciary thereof; (B) “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; (C) except as provided in subdivision (2) of this subsection, “gross earnings” means all consideration received from the first sale within this state of a petroleum product; (D) “petroleum products” means those products which contain or are made from petroleum or a petroleum derivative; (E) “first sale of petroleum products within this state” means the initial sale of a petroleum product delivered to a location in this state; (F) “export” or “exportation” means the conveyance of petroleum products from within this state to a location outside this state for the purpose of sale or use outside this state; and (G) “sale for exportation” means a sale of petroleum products to a purchaser which itself exports such products.

(2) For purposes of this chapter, “gross earnings” means gross earnings as defined in subdivision (1) of this subsection, except, with respect to the first sale of gasoline or gasohol within this state, if the consideration received from such first sale reflects a price of gasoline or gasohol sold or used in this state in excess of three dollars per gallon, gross earnings from such first sale shall be deemed to be three dollars per gallon, and any consideration received that is derived from that portion of the price of such gasoline or gasohol in excess of three dollars per gallon shall be disregarded in the calculation of gross earnings. Notwithstanding the provisions of this chapter, the Commissioner of Revenue Services may suspend enforcement activities with respect to this subdivision until all policies and procedures necessary to implement the provision of this subdivision are in place, but in no event shall such suspension extend beyond April 15, 2012.

(b) (1) Except as otherwise 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 on its gross earnings derived from the first 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 a return on forms prescribed or furnished by the commissioner and signed by the person performing the duties of treasurer or an authorized agent or officer, including the amount of gross earnings derived from the first 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. Except as otherwise provided in subdivision (3) of this subsection, the rate of tax shall be (A) five per cent with respect to calendar quarters prior to July 1, 2005; (B) five and eight-tenths per cent with respect to calendar quarters commencing on or after July 1, 2005, and prior to July 1, 2006; (C) six and three-tenths per cent with respect to calendar quarters commencing on or after July 1, 2006, and prior to July 1, 2007; (D) seven per cent with respect to calendar quarters commencing on or after July 1, 2007, and prior to July 1, 2013; and (E) eight and one-tenth per cent with respect to calendar quarters commencing on or after July 1, 2013.

(2) Gross earnings derived from the first sale of the following petroleum products within this state shall be exempt from tax: (A) Any petroleum products sold for exportation from this state for sale or use outside this state; (B) 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; (C) kerosene, commonly known as number 1 oil, to be 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; (D) the product identified as propane gas, to be used primarily for heating purposes; (E) bunker fuel oil, intermediate fuel, marine diesel oil and marine gas oil to be used in any vessel (i) having a displacement exceeding four thousand dead weight tons, or (ii) primarily engaged in interstate commerce; (F) for any first sale occurring prior to July 1, 2008, propane gas to be used as a fuel for a motor vehicle; (G) for any first sale occurring on or after July 1, 2002, 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 in Sector 31, 32 or 33 in the North American Industrial Classification System United States Manual, United States Office of Management and Budget, 1997 edition; (H) for any first sale occurring on or after July 1, 2002, number 2 heating oil to be used exclusively in a vessel primarily engaged in interstate commerce, which vessel qualifies for an exemption under section 12-412; (I) for any first sale occurring on or after July 1, 2000, paraffin or microcrystalline waxes; (J) for any first sale occurring prior to July 1, 2008, petroleum products to be used as a fuel for a fuel cell, as defined in subdivision (113) of section 12-412; (K) a commercial heating oil blend containing not less than ten per cent of alternative fuels derived from agricultural produce, food waste, waste vegetable oil or municipal solid waste, including, but not limited to, biodiesel or low sulfur dyed diesel fuel; (L) for any first sale occurring on or after July 1, 2007, diesel fuel other than diesel fuel to be used in an electric generating facility to generate electricity; (M) for any first sale occurring on or after July 1, 2013, cosmetic grade mineral oil; or (N) propane gas to be used as a fuel for a school bus.

(3) The rate of tax on gross earnings derived from the first 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 in Sector 31, 32 or 33 in the North American Industrial Classification System United States Manual, United States Office of Management and Budget, 1997 edition, or number 2 heating oil used exclusively in a vessel primarily engaged in interstate commerce, which vessel qualifies for an exemption under section 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.

(c) (1) Any company which imports or causes to be imported into this state petroleum products for sale, use or consumption in this state, other than a company subject to and having paid the tax on such company’s gross earnings from first sales of petroleum products within this state, which earnings include gross earnings attributable to such imported or caused to be imported petroleum products, in accordance with subsection (b) of this section, shall pay a quarterly tax on 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 three thousand dollars. Except as otherwise provided in subdivision (3) of this subsection, the rate of tax shall be (A) five per cent with respect to calendar quarters commencing prior to July 1, 2005; (B) five and eight-tenths per cent with respect to calendar quarters commencing on or after July 1, 2005, and prior to July 1, 2006; (C) six and three-tenths per cent with respect to calendar quarters commencing on or after July 1, 2006, and prior to July 1, 2007; (D) seven per cent with respect to calendar quarters commencing on or after July 1, 2007, and prior to July 1, 2013; and (E) eight and one-tenth per cent with respect to calendar quarters commencing on or after July 1, 2013. 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.

(2) Consideration given or contracted to be given for petroleum products, gross earnings from the first sale of which are exempt from tax under subdivision (2) of subsection (b) of this section, shall be exempt from tax.

(3) The rate of tax on consideration given or contracted to be given for 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 in Sector 31, 32 or 33 in the North American Industrial Classification System United States Manual, United States Office of Management and Budget, 1997 edition, or number 2 heating oil used exclusively in a vessel primarily engaged in interstate commerce, which vessel qualifies for an exemption under section 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.

(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.

(P.A. 80-71, S. 1, 30; P.A. 82-157, S. 1, 3; P.A. 85-159, S. 13, 19; 85-381, S. 3; 85-469, S. 4, 6; P.A. 87-312, S. 1, 2; P.A. 89-373, S. 2, 10; June Sp. Sess. P.A. 91-3, S. 146, 168; P.A. 92-177, S. 6, 12; May Sp. Sess. P.A. 92-17, S. 50, 59; P.A. 93-74, S. 37, 67; P.A. 94-101, S. 2, 3; May Sp. Sess. P.A. 94-4, S. 23, 85; P.A. 95-160, S. 64, 69; 95-172, S. 3, 4; P.A. 96-183, S. 3, 4; P.A. 97-281, S. 1, 3; P.A. 98-244, S. 25, 35; P.A. 99-121, S. 20, 28; P.A. 00-174, S. 34, 80, 83; June Sp. Sess. P.A. 01-6, S. 20, 31, 67, 85; May 9 Sp. Sess. P.A. 02-4, S. 8; P.A. 04-231, S. 3; June Sp. Sess. P.A. 05-4, S. 40; P.A. 06-143, S. 2; P.A. 07-199, S. 2; June Sp. Sess. P.A. 07-1, S. 137; June 11 Sp. Sess. P.A. 08-2, S. 1, 2; P.A. 12-4, S. 1; P.A. 13-232, S. 3; 13-247, S. 66; P.A. 14-222, S. 9; Dec. Sp. Sess. P.A. 15-1, S. 27.)

History: P.A. 80-71 effective July 1, 1980, and applicable to calendar quarters commencing on or after that date; P.A. 82-157 changed provisions concerning type of company subject to tax from a company engaged primarily in refining and distribution of petroleum products to a company engaged in the refining or distribution, or both, of petroleum products, including a new provision that the tax is applicable to gross earnings from sale of any petroleum product which is the first sale of such product in the state; P.A. 85-159 excluded number 2 heating oil from the definition of “petroleum products” except when it is sold as diesel fuel and provided that any savings realized by any company from the elimination of the tax on said product shall be offset by a price decrease in said product, effective May 16, 1985, and applicable to calendar quarters commencing on or after July 1, 1985; P.A. 85-381 divided section into Subsecs., incorporating all important definitions in Subsec. (a), added clarification as to the date the return and tax are due and deleted definitions included in Subsec. (a) as they subsequently appear in this section; P.A. 85-469 revised effective date of P.A. 85-159 but without affecting this section; P.A. 87-312 excluded propane gas used for residential heating from the definition of “petroleum products”, effective July 1, 1987, and applicable to calendar quarters commencing on or after that date; P.A. 89-373 amended Subdiv. (b) to increase the tax from 2% to 3% of gross earnings and made technical changes in Subsec. (d), effective July 1, 1989, and applicable to gross earnings derived from sales of petroleum products for calendar quarters commencing on or after that date; June Sp. Sess. P.A. 91-3 amended Subsec. (b) to increase the rate of the tax from 3% to 5%, added new Subsec. (c), concerning importation of fuel and eliminated the former Subsec. (d), concerning the savings from the elimination of the tax on number 2 heating oil, as obsolete, effective August 22, 1991, and applicable to gross earnings derived from sales of petroleum products for calendar quarters commencing on or after October 1, 1991; P.A. 92-177 amended Subsec. (c) to provide that fuel in the fuel supply tanks of a motor vehicle, which tanks are directly connected to the engine, shall not be considered a delivery for purposes of this subsection; May Sp. Sess. P.A. 92-17 amended Subsec. (a) to exclude certain marine fuel from the definition of petroleum products, effective June 19, 1992, and applicable to gross earnings from sales of petroleum products for calendar quarters commencing on or after July 1, 1992; P.A. 93-74 amended Subsec. (a) redefining “petroleum products” to exclude kerosene in certain circumstances, effective May 19, 1993; P.A. 94-101 amended Subsec. (a) by deleting reference to “state-licensed” suppliers and adding provision re Internal Revenue Service certificate of registry in Subdiv. (4)(B), effective July 1, 1994 and applicable to calendar quarters commencing on or after that date; May Sp. Sess. P.A. 94-4 added a new Subsec. (e) re calculation of gross earnings of any producer or refiner of petroleum products operating a service station along the highways or interstate highways of the state, effective June 9, 1994, and applicable to taxable years commencing on or after January 1, 1988; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 95-172 excluded earnings prior to January 1, 2000, from the sale of propane as a fuel for a motor vehicle from the definition of gross earnings, effective July 1, 1995, and applicable to calendar quarters on and after that date; P.A. 96-183 amended Subsec. (a) to add use by commercial fishing vessels, effective May 31, 1996; P.A. 97-281 amended Subsec. (a) to exclude number 6 fuel oil used by companies in SIC code classifications 2000 to 3999 and number 2 heating oil used in vessels primarily engaged in interstate commerce for calendar quarters commencing on or after July 1, 2002, and added Subsec. (b)(2) phasing down the rate on number 6 fuel oil and number 2 heating oil effective July 1, 1998, and applicable to calendar quarters on and after that date; P.A. 98-244 reorganized section, made technical changes, added limited liability company and limited liability partnership and changed the term earnings to consideration, effective June 8, 1998, and applicable to calendar quarters commencing on or after October 1, 1998; P.A. 99-121 amended Subsec. (c)(1) to change “its use and consumption” to “sale, use or consumption in this state”, effective June 3, 1999, and applicable to calendar quarters commencing on or after July 1, 1999; P.A. 00-174 amended Subsec. (a)(4) to exclude paraffin and microcrystalline waxes from the definition of “petroleum products”, effective July 1, 2000, and amended Subsecs. (b) and (c) to include references to companies classified in the North American Industrial Classification System, effective May 26, 2000; June Sp. Sess. P.A. 01-6 made technical changes in Subsecs. (a) and (b) and amended Subsec. (b)(2) to exempt from taxation propane gas sold for use as motor vehicle fuel during the period July 1, 2001, to June 30, 2002, effective July 1, 2001, and amended Subsec. (c)(1) to decrease the threshold for tax liability for imported products from $100,000 to $3,000 per quarterly period, effective July 1, 2001, and applicable to quarterly periods commencing on or after October 1, 2001; May 9 Sp. Sess. P.A. 02-4 amended Subsec. (b)(2) to extend to July 1, 2004, the exemption for propane used as fuel in Subpara. (F) and to add Subpara. (J) granting an exemption for fuel used in fuel cells prior to July 1, 2004, effective July 1, 2002; P.A. 04-231 amended Subsec. (b)(2)(F) to extend the sunset date for the exemption from July 1, 2004, to July 1, 2008, and amended Subsec. (b)(2)(J) to delete “on or after July 1, 2002, and” and to extend the sunset date for the exemption from July 1, 2004, to July 1, 2008, effective July 1, 2004; June Sp. Sess. P.A. 05-4 amended Subsecs. (b)(1) and (c)(1) to increase rate of tax annually from 5% in 2005 to 8.1% in 2013, effective July 1, 2005; P.A. 06-143 amended Subsec. (b)(2) to include commercial heating oil blend containing not less than 10% of alternative fuels derived from agricultural produce, food waste, waste vegetable oil or municipal solid waste, including, but not limited to, biodiesel or low sulfur dyed diesel fuel, effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; P.A. 07-199 added Subsec. (b)(2)(L) exempting diesel fuel to be used exclusively in a qualified motor vehicle by a motor carrier, effective July 1, 2007; June Sp. Sess. P.A. 07-1 amended Subsec. (b)(2)(L) by changing exemption for diesel fuel to diesel fuel other than that used in an electric generating facility, effective July 1, 2007; June 11 Sp. Sess. P.A. 08-2 amended Subsecs. (b)(1) and (c)(1) to eliminate rate increase to 7.5% scheduled for July 1, 2008, effective June 17, 2008; P.A. 12-4 amended Subsec. (a) by designating existing provisions as Subdiv. (1) and amending same to add exception re Subdiv. (2) in existing definition of “gross earnings” and make conforming changes, and by adding Subdiv. (2) re definition of “gross earnings”, effective April 3, 2012; P.A. 13-232 amended Subsec. (b)(2) by adding Subpara. (M) re exemption for cosmetic grade mineral oil, effective July 1, 2013; P.A. 13-247 amended Subsec. (b)(2) by adding provision, codified by the Revisors as Subpara. (N), re exemption for propane gas to be used as a fuel for a school bus, effective July 1, 2013; P.A. 14-222 amended Subsec. (b)(2)(E) by designating existing provision re displacement exceeding 4,000 dead weight tons as clause (i) and adding clause (ii) re vessels primarily engaged in interstate commerce, effective June 13, 2014; Dec. Sp. Sess. P.A. 15-1 amended Subsec. (b)(2)(D) by replacing “exclusively” with “primarily” re propane gas for heating purposes, effective December 29, 2015, and applicable to first sales made on or after December 1, 2015.