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New York State Extends Tax Exemptions for Alternative Fuels


The New York State Department of Taxation and Finance have issued guidance concerning the five-year extension of the alternative fuel tax exemptions. Part U of Chapter 60 of the Laws of 2016 extends through August 31, 2021 the current tax exemptions for the alternative fuels CNG, E85, hydrogen, and B20, and for natural gas that will be converted into CNG for use or consumption in motor vehicles. LNG is considered CNG and the same exemptions apply. These exemptions were due to expire on August 31, 2016.

Natural gas fuel will enjoy a full exemption from the excise tax and the petroleum business tax, a full exemption from the state and local sales and use taxes for retail sales, and a full exemption from prepaid sales tax. The savings for natural gas fuel equates to approximately $.44 per GGE, which approximately breaks down as follows:

  • NYS Motor Fuels Tax — $.08/GGE
  • NYS and Local Sales Tax — $.20/GGE
  • Petroleum Business Tax (PBT) — $.159/GGE

For more information, view the Technical Memorandum.