What sales-tax rate applies to kerosene sold for home heating, and what does the seller need from the customer to charge the reduced residential rate?

Plain-English summary

Green Bros. Home and Garden, Inc., a Nassau County vendor, sells kerosene for home heating to consumers who bring their own containers (never smaller than one gallon) to be filled. It asked what sales-tax rate applies.

The Department explained the residential-energy rate rules:

• Kerosene is normally taxable. Section 1105(a) imposes the State's 4% sales tax on retail sales of tangible personal property, and Nassau County imposes its own tax; both apply to kerosene by their terms.
• But residential energy gets a reduced rate. Section 1105-A (enacted 1978) reduced the State's rate on certain energy sources — including kerosene — used for residential purposes. Since October 1, 1980 the State rate has been 0%. Nassau County similarly reduced its rate: to 2% as of January 1, 1980 and to 1% as of June 1, 1981.
• A certificate is required to use the reduced rate. Under § 1105-A(e), the vendor must receive a properly completed Certification of Residential Use, Sales Tax Reduction on Energy Purchases (Form TP-385) from the purchaser for the reduced rates to apply.
• Result: With a properly completed TP-385, Green Bros. collects only the Nassau County tax (currently 1%). Without it, Green Bros. must collect both State and Nassau County tax, a combined 7%. The amount sold has no bearing on the applicable rate.

What this means for you

Residential energy sales get a break — but only with the paperwork. Kerosene, and other qualifying energy used for residential purposes, benefits from the § 1105-A rate reduction. The reduced rate isn't automatic: you need a properly completed Form TP-385 from the customer certifying residential use. No certificate, no reduced rate.

Rates are set by date and locality. The State residential rate dropped to 0% on October 1, 1980, but the local (county) rate is separate and changes on its own schedule — Nassau went from 2% to 1% in 1981. Always apply the State and local rates in effect on the sale date, and remember New York's state and local sales taxes are administered centrally by the Department.

Quantity doesn't change the rate. Whether the customer fills a one-gallon can or a large drum, the rate is the same; only residential use (documented by TP-385) matters for the reduction.

Common questions

Q: What do I charge on kerosene for home heating?
A: With a properly completed Form TP-385 certifying residential use, you collect only the county tax (1% in Nassau at the time of this opinion), because the State residential rate is 0%. Without the form, you collect both State and county tax — 7% combined here.

Q: Do I still need the certificate if the State rate is 0%?
A: Yes. Section 1105-A(e) conditions the reduced rates (State and local) on receiving a properly completed TP-385. Without it, the full rates apply.

Q: Does selling a bigger quantity change the tax?
A: No. The opinion states the amounts sold have no bearing on the applicable rates; only residential use, documented by the certificate, matters.

Citations and references

Statutes and authority:

• Tax Law § 1105(a) — imposes the State's 4% sales tax on retail sales of tangible personal property (applies to kerosene absent a reduction)
• Tax Law § 1105-A — reduces the tax rate on certain energy sources, including kerosene, used for residential purposes (State rate 0% since October 1, 1980)
• Tax Law § 1105-A(e) — requires a properly completed Certification of Residential Use (Form TP-385) from the purchaser for the reduced rates to apply

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1981.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a81_9s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-81(9)S
Sales Tax
August 13, 1981

Taxpayer Services Division
Technical Services Bureau
STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S810416A

On April 16, 1981 a Petition for Advisory Opinion was received from Green Bros. Home and
Garden, Inc., 5500 Merrick Road, Massapequa, New York 11758.
Petitioner inquires as to the rate of sales tax to be applied to sales of kerosene sold for use
in home heating.
Petitioner, a vendor located in Nassau County, sells kerosene for home heating use to
consumers who bring containers to his place of business to be filled. Petitioner notes that the
containers are of various sizes, but never less than one gallon.
Section 1105(a) of the Tax Law imposes the State's 4% sales tax on receipts from retail sales
of tangible personal property. Nassau County imposes a similar tax, at a rate of 3%. These
impositions of tax are by their terms applicable to the sale of kerosene. However, Section 1105-A
of the Tax Law, enacted in 1978, provided for a reduction of the State's tax rate on certain energy
sources, including kerosene, used for residential purposes. Since October 1, 1980 such rate has been
0%. Nassau County has also provided for a rate reduction with respect to the same transactions. The
County tax rate was reduced to 2% as of January 1, 1980 and further reduced to 1% as of June 1,
1981. Pursuant to Section 1105-A(e) of the Tax Law the State Tax Commission has prescribed a
Certification of Residential Use, Sales Tax Reduction on Energy Purchases (Form TP-385) which
must be received, in properly completed form, by a vendor from a purchaser, in order for the reduced
tax rates to apply to a transaction.
Accordingly, Petitioner need collect only the Nassau County tax on sales of kerosene for
residential use (at a rate of 1%, at present), where a properly completed Form TP-385 has been
supplied by the purchaser. Where such document has not been so supplied Petitioner must collect
both State and Nassau County sales tax, at a combined rate of 7%. It is to be noted that the amounts
sold have no bearing on the applicable tax rates.

DATED: July 29, 1981

JAMES H. TULLY., COMMISSIONER
TP-8 (4/80)

s/LOUIS ETLINGER
Deputy Director
Technical Services Bureau

LOUIS M. JACOBSON, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR