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New York Sales Tax Exemption for Natural Gas


 New York: new sales and use tax exemption for CNG used in vehicles.

New York Tax Law now allows a sales and use tax exemption for natural gas purchased under certain conditions. The exemption applies to sales on or after June 1, 2013. It expires August 31, 2014.

A New York State Department of Taxation and Finance explains the exemption, which applies to “natural gas that is purchased in an uncompressed state and that will be converted into CNG [compressed natural gas] and used or sold for use or consumption directly and exclusively in the engine of a motor vehicle."

In order to claim this new exemption, vendors must receive a properly completed Form ST-121, Exempt Use Certificate (Part 3, Box U), from purchasers. Without this form, sales tax should be charged by the vendor and paid by the consumer.

Should the consumer later convert “all or a portion of the natural gas purchased into CNG for use or consumption directly and exclusively in the engine of a motor vehicle,” the purchaser may use Form AU-11 to file a claim for a refund or credit.

How does your business handle exemption certificates?

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.