N.Y. Comp. Codes R. & Regs. tit. 20 § 534.10
[Tax Law, § 1119(b)]
Example 1:
A vessel operator uses vessels to provide mass transit service. The vessels pick up passengers from Terminal A and make scheduled landings at designated piers throughout the city to pick up and discharge passengers before returning to the terminal at the end of the day. The terminal and all of the landings are located in New York State. The vessels are operated in local transit service.
Example 2:
A vessel operator uses vessels to provide mass transit service. The vessels pick up passengers from Terminal A, proceed to Stations B and C, and continue to Terminal D. All of these facilities and all of the mileage are located in New York State. The distance along the route traveled from A to B is 80 miles, from B to C is 80 miles, and from C to D is 60 miles. Between Terminal A and Station B, the vessels pick up and discharge passengers at designated piers along the waterway. However, they do not do this between Stations B and C or between Station C and Terminal D. Between A and B and between C and D, these vessels are operated in local transit service. Between Stations B and C, however, the vessels are not operated in local transit service because they do not stop to pick up and discharge passengers and the facilities are more than 75 miles apart.
Example 3:
A vessel operator uses vessels to provide mass transit service. The vessels transport passengers to and from Terminals A and B. Terminal A is located in New York State. Terminal B is located outside of the State. There are no scheduled landings at which to pick up or discharge passengers between Terminal A and the State boundary. These vessels are not being operated in local transit service because they are not carrying passengers from one point in this State to another point in this State.
Example 4:
A vessel operator uses vessels to provide mass transit service. The vessels pick up passengers from Terminal A, proceed to Station B, and continue to Terminal C. Terminals A and C are located in New York State, and Station B is located outside of the State. The distance from Terminal A to Station B along the route traveled by the vessels is 20 miles, as is the distance from Station B to Terminal C. There are no scheduled landings made along the way. The vessels are operated in local transit service because the total distance traveled between Terminals A and C is less than 75 miles, even though the route from A to C includes some mileage outside of the State.
Example 5:
Assume the facts in Example 4, except that the distance between Terminal A and Station B and between Station B and Terminal C is each 40 miles. The vessels are not operating in local transit service because the total distance traveled between Terminals A and C is greater than 75 miles. The fact that the vessel operator carries passengers from Terminal A to Station B, a distance of 40 miles, does not qualify as local transit service because it is not between two points within New York State.
Example 6:
Under the facts of Example 4 set forth in paragraph (3) of this subdivision, the vessel operator operates its vessels for 15,000 hours. Of this number of hours: 4,000 hours are operated between Terminal A and Station B, of which 500 hours are operated outside of New York State; 4,000 hours are also operated between Station B and Terminal C, of which 500 hours are operated outside of the State; 3,500 hours are operated in charter services in New York State; and another 3,500 hours are operated in sight- seeing services in this State. The vessel hours in local transit service is 7,000 hours, which is composed of the 3,500 hours operated is this State between Terminal A and Station B (4,000 - 500) and the 3,500 hours operated in this State between Station B and Terminal C (4,000 - 500). Total hours operated is 14,000 hours, which is all of the hours operated except the 1,000 hours that were operated outside of the State. The local transit service percentage is 50 percent (the percentage that 7,000 vessel hours bear to 14,000 total hours operated).
A vessel operator engaged in local transit service is allowed a refund or a credit of taxes paid on the sale to or use by the vessel operator of a vessel, as defined in this section, and of parts, equipment, lubricants, diesel motor fuel, maintenance, servicing, and repair purchased and used in the operation of any such vessel by the operator.
The refund or credit is determined in accordance with the following table:
| If the local transit service percentage is: | The refund or credit is: |
| Less than 10 percent | None |
| 10 percent | 10 percent of the combined State and local taxes paid |
| Greater than 10 percent, but less than 70 percent | 10 percent plus the product of 1.5 times each whole percent in excess of 10 percent of the combined State and local taxes paid |
| 70 percent or more | 100 percent of the combined State and local taxes paid |
Example 7:
Under the facts of Example 6, as set forth in paragraph (a)(6) of this section, it was determined that the local transit service percentage of the vessel operator is 50 percent. The vessel operator is entitled to a refund or credit of 70 percent of the combined State and local taxes paid on items eligible for such refund or credit, computed as follows:
Initial 10% = 10%
+40% * 1.5 = 60%
Total
70% .......
An application for refund or credit must be filed with the Department of Taxation and Finance and must cover a period of not less than three months. (For the administrative provisions on applying for a refund or credit, see section 534.2 of this Part.)
N.Y. Comp. Codes R. & Regs. Tit. 20 § 534.10