This Special Notice has been superseded by SN 2000(11)
Credit Procedures for Reduced Rate Petroleum Products
PURPOSE: The purpose of this Special Notice is to explain the procedures that companies engaged in the distribution, use and consumption of petroleum products in Connecticut must follow to receive credit for excess petroleum products gross earnings tax paid on sales of petroleum products that are ultimately taxable at a reduced rate.
EFFECTIVE DATE: Applicable to sales occurring on or after July 1, 1998.
STATUTORY AUTHORITY: Conn. Gen. Stat. §12-587, as amended by 1997 Conn. Pub. Acts 281, §1.
BACKGROUND: Under Conn. Gen. Stat. §12-587, any company engaged in the refining or distribution, or both, of petroleum products, which distributes such products in Connecticut, must pay tax at the rate of 5% of its gross earnings derived from the first sale of the petroleum products in the state. For purposes of the petroleum products gross earnings tax, the company that pays the tax on the first sale of petroleum products in Connecticut is the "taxpayer." The tax is due with Form OP-161, Petroleum Products Gross Earnings Tax Return, on or before the last day of the month next succeeding the quarterly period in which such products are sold.
REDUCED RATE PETROLEUM PRODUCTS:
Effective July 1, 1998, sales of the following products are subject to the petroleum products gross earnings tax at reduced rates:
1997 Conn. Pub. Acts 281, §1 provides a phase-out over the next five years of the gross earnings tax on sales of these products. For such sales of number 2 and number 6 oil made:
See Special Notice 98(7), 1997 Legislative Changes Affecting the Petroleum Products Gross Earnings Tax Effective July 1, 1998.
SPECIAL FILING PROCEDURES TO OBTAIN CREDIT: Because of the legislative change in 1997 Conn. Pub. Acts 281, §1, a portion of the petroleum products on which 5% tax is paid may ultimately be used in a manner that will subject it to tax at a reduced rate. For a taxpayer to receive credit for excess tax paid on sales of petroleum products that are ultimately taxable at a reduced rate, the following procedures must be followed when the taxpayer files its Form OP-161:
EFFECT ON OTHER DOCUMENTS: Form OP-161 has been modified to reflect the changes described in this document. CERT-116, Exempt Petroleum Products Certificate, is not affected by the procedures described and will not be revised, as was originally reported in Special Notice 98(7).
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.
FOR FURTHER INFORMATION: For further information concerning the petroleum products gross earnings tax, call the Excise/Public Services Subdivision at 860-541-3225.
If you have questions regarding other Connecticut taxes, please call the Department of Revenue Services during business hours, 8:00 a.m. to 5:00 p.m., Monday through Friday:
FORMS AND PUBLICATIONS: Forms and publications are available all day, seven days a week: