N.Y. Tax Law § 186-a: Tax on the furnishing of utility services

§ 186-a. Tax on the furnishing of utility services. 1. Notwithstanding

any other provision of this chapter, or of any other law, (a) a tax

equal to three and one-quarter percent through December thirty-first,

nineteen hundred ninety-nine, and two and one-half percent on and after

January first, two thousand of its gross income is hereby imposed upon

every provider of telecommunication services doing business in this

state which is subject to the supervision of the state department of

public service which has a gross income for the year ending December

thirty-first in excess of five hundred dollars;

(b) a tax equal to (1) two and five-tenths percent on and after

January first, two thousand through December thirty-first, two thousand,

two and forty-five one hundredths percent from January first, two

thousand one through December thirty-first, two thousand one, two and

four-tenths percent from January first, two thousand two through

December thirty-first, two thousand two, two and twenty-five one

hundredths percent from January first, two thousand three through

December thirty-first, two thousand three, two and one hundred

twenty-five one thousandths percent from January first, two thousand

four through December thirty-first, two thousand four and two percent

commencing January first, two thousand five and thereafter of that

portion of its gross income derived from the transportation,

transmission or distribution of gas or electricity by means of conduits,

mains, pipes, wires, lines or the like and (2) two and one-tenth percent

from January first, two thousand through December thirty-first, two

thousand, two percent from January first, two thousand one through

December thirty-first, two thousand one, one and nine-tenths percent

from January first, two thousand two through December thirty-first, two

thousand two, eighty-five one hundredths of one percent from January

first, two thousand three through December thirty-first, two thousand

three, four-tenths of one percent from January first, two thousand four

through December thirty-first, two thousand four and zero percent

commencing January first, two thousand five of all of its other gross

income, is hereby imposed upon every utility not taxed under paragraph

(a) of this subdivision doing business in this state which is subject to

the supervision of the state department of public service which has a

gross income for the year ending December thirty-first in excess of five

hundred dollars, except motor carriers or brokers subject to such

supervision under the public service law; and

(c) a tax equal to three and one-quarter percent through December

thirty-first, nineteen hundred ninety-nine, two and one-tenth percent

from January first, two thousand through December thirty-first, two

thousand, two percent from January first, two thousand one through

December thirty-first, two thousand one, one and nine-tenths percent

from January first, two thousand two through December thirty-first, two

thousand two, eighty-five one hundredths of one percent from January

first, two thousand three through December thirty-first, two thousand

three, four-tenths of one percent from January first, two thousand four

through December thirty-first, two thousand four and zero percent

commencing January first, two thousand five of its gross operating

income is hereby imposed upon every other utility doing business in this

state which has a gross operating income for the year ending December

thirty-first in excess of five hundred dollars, which taxes shall be in

addition to any and all other taxes and fees imposed by any other

provision of law for the same period.

2. As used in this section, (a) the word "utility" includes every

person (including every provider of telecommunication services) subject

to the supervision of the state department of public service, except

persons engaged in the business of operating on the public highways of

this state one or more omnibuses, having a seating capacity of more than

seven persons, and persons engaged in the business of operating or

leasing sleeping and parlor railroad cars or of operating railroads

other than street surface, rapid transit, subway and elevated railroads,

and also includes every person (whether or not such person is subject to

such supervision) who sells gas, electricity, steam, water or

refrigeration, delivered through mains, pipes or wires, or furnishes

gas, electric, steam, water or refrigerator service, by means of mains,

pipes, or wires; regardless of whether such activities are the main

business of such person or are only incidental thereto, or of whether

use is made of the public streets;

(b) the word "person" means persons, corporations, companies,

associations, joint-stock companies or associations, partnerships and

limited liability companies, estates, assignee of rents, any person

acting in a fiduciary capacity, or any other entity, and persons, their

assignees, lessees, trustees or receivers, appointed by any court

whatsoever, or by any other means, except the state; municipalities,

political and civil subdivisions of the state or municipality and public

districts (provided, however, that with respect to gas, electricity and

gas or electric service, including the sale of the transportation,

transmission or distribution of gas or electricity, such municipalities,

political and civil subdivisions and public districts shall be excluded

from the definition of "person" if they own and operate facilities which

are used to generate or distribute electricity or distribute gas and

they distribute and sell such gas or electricity solely at retail,

solely within their respective jurisdiction; or provided, further, with

respect to the sale of electricity or the transportation, transmission

or distribution of electricity, a municipality shall be excluded from

the definition of "person" if it sells electricity at retail where all

such electricity (excluding temporary substitution power during outages

or periods of reduced output) has been generated solely by and purchased

solely from the state or a public authority of the state); corporations

and associations which are organized and operated exclusively for

religious, charitable or educational purposes, no part of the net

earnings of which inures to the benefit of any private shareholder or

individual, and which are described in paragraph four of subdivision (a)

of section eleven hundred sixteen of this chapter where such

organization resells such gas or electricity or gas or electric service

as landlord to its tenants in buildings owned by such organization; and

excepting a corporation organized and operated exclusively for the

purpose of leasing from a city in this state a water-works system

designed to supply water at cost to users thereof for discharge, either

before or after industrial use, into a river within such city in order

to improve the flow and condition of such river and thereby to provide a

means to relieve such river from pollution;

(c) the words "gross income" mean and include receipts received in or

by reason of any sale, conditional or otherwise, (except sales

hereinafter referred to with respect to which it is provided that

profits from the sale shall be included in gross income) made or service

rendered for ultimate consumption or use by the purchaser in this state,

including cash, credits and property of any kind or nature (whether or

not such sale is made or such service is rendered for profit), without

any deduction therefrom on account of the cost of the property sold, the

cost of materials used, labor or services or other costs, interest or

discount paid, or any other expense whatsoever.

(1) Provided, however, that all receipts from sales of the

transportation, transmission or distribution of gas or electricity by

means of conduits, mains, pipes, wires, lines or the like, rendered or

performed in this state, shall be included in gross income except

receipts from (i) sales of the transportation, transmission or

distribution of gas or electricity to (A) a utility (excluding a public

authority) which is supervised by this state or another jurisdiction

(where an element of such supervision includes rate regulation and, for

a utility supervised by another jurisdiction, such supervision includes

rate regulation and such gas or electricity is delivered for ultimate

consumption or use outside this state), (B) a municipality which owns

and operates facilities which are used to generate or distribute

electricity or distribute gas and which distributes and sells such

electricity or gas solely at retail, solely within its respective

jurisdiction, or (C) a public authority of this state where such public

authority is primarily engaged in the generation and transmission or

distribution of electricity or the distribution of electricity or gas

and at least ninety-five percent of the assets of which are so devoted,

provided, that, if the service area or district of the authority is less

than the entire state, the excluded receipt shall be limited to receipts

derived from the sale of transportation, transmission or distribution of

gas or electricity, which electricity or gas will be sold by such

authority at retail within its service area or district; where, as the

case may be, such utility or authority purchasing such transportation,

transmission or distribution sells the gas or electricity being so

transported, transmitted or distributed, (ii) sales of the

transportation, transmission or distribution of electricity to a

municipality where the electricity being transported has been purchased

by such municipality and has been generated solely by and purchased

solely from the state or a public authority of the state (except where

the electricity being transported constitutes temporary substitution

power being supplied during outages or periods of reduced output) and

where such municipality purchasing such transportation, transmission or

distribution, sells solely at retail, solely within its respective

jurisdiction, the electricity being so transported, transmitted or

distributed, (iii) sales of the transportation, transmission or

distribution of gas or electricity to corporations and associations

which are organized and operated exclusively for religious, charitable

or educational purposes, no part of the net earnings of which inures to

the benefit of any private shareholder or individual, and which are

described in paragraph four of subdivision (a) of section eleven hundred

sixteen of this chapter where such organization resells such

transportation, transmission or distribution as part of a bundled gas or

electric service as landlord to its tenants in buildings owned by such

organization, or (iv) sales of the transportation, transmission or

distribution of gas or electricity, not otherwise excluded, to

nonresidential customers, but only in accordance with the following

schedule: for the sales during the calendar years two thousand and two

thousand one, zero percent of the receipts from such sales shall be

excluded; for the sales during the calendar year two thousand two,

twenty-five percent of the receipts from such sales shall be excluded;

for sales during the calendar year two thousand three, fifty percent of

the receipts from such sales shall be excluded; for sales during the

calendar year two thousand four, seventy-five percent of the receipts

from such sales shall be excluded; and for sales thereafter, one hundred

percent of such sales shall be excluded. For the purposes of this

clause, the term "nonresidential customers" means those customers whose

use of gas or electricity, or gas or electric service does not qualify

for the reduced rate of sales and compensating use tax on gas,

electricity, or gas or electric service under section eleven hundred

five-A of article twenty-eight of this chapter.

(2) Provided, further, receipts received from the sale of the

transportation, transmission or distribution of gas or electricity shall

mean the receipts received from customers representing the noncommodity

charges for gas or electric service.

(3) Provided, further, gross income with respect to a provider of

telecommunication services shall not include receipts from the sale of

telecommunication services as such services are defined in section one

hundred eighty-six-e of this article.

(4) Provided, further, sales of gas, electricity, steam, water or

refrigeration or gas, electric, steam, water or refrigerator service to

a landlord that is a person as defined in this subdivision for resale by

such landlord to a tenant, for consumption by such tenant as an incident

to such landlord's activity of renting premises to such tenant, shall be

subject to the tax imposed under this section even though such sales are

not for ultimate consumption by such landlord. Provided, further,

receipts derived by a landlord from the resale for such gas,

electricity, steam, water or refrigeration or furnishing gas, electric,

steam, water or refrigerator service to such tenant shall be

conclusively presumed to be equal to such landlord's cost of the same,

and, if the tax under this section was imposed on the sale to such

landlord, no additional tax under this section shall be owing on the

sale by such landlord to such tenant. If, however, the tax under this

section was not imposed on such sale to the landlord, then such landlord

on the sale to its tenant shall file a return hereunder based on such

landlord's cost (including any associated transportation cost) of such

gas, electricity, steam, water or refrigeration or gas, electric, steam,

water or refrigerator service.

(5) "Gross income" also includes profits from the sale of securities;

also profits from the sale of real property growing out of the ownership

or use of or interest in such property; also profit from the sale of

personal property (other than property of a kind which would properly be

included in the inventory of the taxpayer if on hand at the close of the

period for which a return is made); also receipts from interest,

dividends, and royalties, derived from sources within this state other

than such as are received from a corporation a majority of whose voting

stock is owned by the taxpaying utility, without any deduction therefrom

for any expenses whatsoever incurred in connection with the receipt

thereof, also profits from any transaction (except sales for resale and

rentals) within this state whatsoever;

(d) the words "gross operating income" mean and include receipts

received in or by reason of any sale, conditional or otherwise, made for

ultimate consumption or use by the purchaser of gas, electricity, steam,

water or refrigeration, or in or by reason of the furnishing for such

consumption or use of gas, electric, steam, water or refrigerator

service in this state, including cash, credits and property of any kind

or nature, without any deduction therefrom on account of the cost of the

property sold, the cost of materials used, labor or services or other

costs, interest or discount paid, or any other expenses whatsoever.

Provided, however, there shall be excluded from gross operating income

receipts representing the amount received from the resale of the

transportation, transmission or distribution of gas or electricity in

this state where such transportation, transmission or distribution being

resold is provided by a utility subject to tax under paragraph (b) of

subdivision one of this section; the receipts representing the amount

received from resale of such transportation, transmission or

distribution shall be the amount received for such transportation,

transmission or distribution by such utility which initially provided

such transportation, transmission or distributions. Provided, further,

sales of gas, electricity, steam, water or refrigeration or gas,

electric, steam, water or refrigerator service to a landlord that is a

person as defined in this subdivision for resale by such landlord to a

tenant, for consumption by such tenant as an incident to such landlord's

activity of renting premises to such tenant, shall be subject to the tax

imposed under this section even though such sales are not for ultimate

consumption by such landlord. Provided, further, receipts derived by a

landlord from the resale of such gas, electricity, steam, water or

refrigeration or furnishing gas, electric, steam, water or refrigerator

service to such tenant shall be conclusively presumed to be equal to

such landlord's cost of the same, and, if the tax under this section was

imposed on the sale to such landlord, no additional tax under this

section shall be owing on the sale by such landlord to such tenant. If

the tax under this section was not imposed on such sale to the landlord,

then such landlord on the sale to its tenant shall file a return

hereunder based on such landlord's cost (including any associated

transportation cost) of such gas, electricity, steam, water or

refrigeration or gas, electric, steam, water or refrigerator service;

(e) the term "telecommunication services" shall have the same meaning

as such term is defined in section one hundred eighty-six-e of this

article;

(f) The word "premises" means and includes any real property or part

thereof, and any structure thereon or space therein; and

(g) the word "tenant" means and includes a person paying, or required

to pay, rent for premises as a lessee, sublessee, licensee or

concessionaire.

2-a. Tax adjustment for utilities with financial resource asset for

taxable years commencing on and after January first, nineteen hundred

ninety-two. Notwithstanding any provision of this section to the

contrary, in the event that a utility which is taxable under this

section is an electric corporation, as defined in subdivision thirteen

of section two of the public service law, which, on or before the

effective date of this subdivision, has been permitted by the public

service commission to establish for ratemaking purposes a financial

resource asset (which asset shall represent, in an amount approved by

the public service commission on or before the effective date of this

subdivision, the present value of a stream of future cash flows, rather

than actual land, land rights, physical structures, improvements or

other physical items, franchises or intangible plant), such an electric

corporation shall be allowed an adjustment by way of the allowance of a

deduction from its gross income subject to tax under subdivision one of

this section equal to the amount by which (a) that portion of gross

income received in any year after nineteen hundred ninety-one which

represents the total return authorized by the public service commission

to be recovered in rates on the financial resource asset, including

amortization, exceeds (b) that portion of gross income received in the

twelve-month period immediately preceding the month in which the

financial resource asset is established pursuant to authorization of the

public service commission and which represents (i) the total revenue

derived from any financial stability adjustment and (ii) the total

return on interest-bearing construction work in progress in the rate

base permitted by the public service commission. No electric corporation

shall be allowed the tax adjustment authorized by this subdivision until

it shall file, together with the return required to be filed pursuant to

subdivision four of this section, a certificate for the period covered

by the return from the department of public service verifying that the

calculation of such tax adjustment complies with this subdivision. The

adjustment to gross income allowed by this subdivision shall not be

applicable in calculating any other tax imposed or authorized to be

imposed by this chapter or any other law, and the amount of tax

surcharge equal to seventeen per centum imposed pursuant to section one

hundred eighty-six-c of this article, and the amount of the tax

surcharge imposed under section one hundred eighty-eight of this

article, shall be calculated and payable as if the adjustment provided

in this subdivision were not allowed.

3. Every utility subject to tax under this section shall keep such

records of its business and in such form as the tax commission may

require, and such records shall be preserved for a period of three

years, except that the tax commission may consent to their destruction

within that period or may require that they be kept longer.

4. Every utility subject to tax hereunder shall file, on or before

March fifteenth of each year, a return for the year ended on the

preceding December thirty-first, for taxable years beginning before

January first, two thousand sixteen, except that the year ended on

December thirty-first, nineteen hundred seventy-six shall be deemed, for

the purposes of this subdivision, to have commenced on June first,

nineteen hundred seventy-six, and shall file, on or before April

fifteenth of each year, a return for the year ended on the preceding

December thirty-first, for taxable years beginning on or after January

first, two thousand sixteen, including any period for which the tax

imposed hereby or by any amendment hereof is effective, each of which

returns shall state the gross income or gross operating income for the

period covered by each such return. Returns shall be filed with the

commissioner of taxation and finance on a form to be furnished by the

commissioner for such purpose and shall contain such other data,

information or matter as the commissioner may require to be included

therein. Notwithstanding the foregoing provisions of this subdivision,

the commissioner may require any utility to file an annual return, which

shall contain any data specified by the commissioner, regardless of

whether the utility is subject to tax under this section; and the

commissioner may require a landlord selling to a tenant gas, electric,

steam, water or refrigeration or furnishing gas, electric, steam, water

or refrigerator service, where the same has been subjected to tax under

this section on the sale to such landlord, to file, on or before the

fifteenth day of March of each year, for taxable years beginning before

January first, two thousand sixteen, and on or before the fifteenth day

of April of each year, for taxable years beginning on or after January

first, two thousand sixteen, an information return for the year ended on

the preceding December thirty-first, covering such year in such form and

containing such data as the commissioner may specify. Every return shall

have annexed thereto a certification by the head of the utility making

the same, or of the owner or of a co-partner thereof, or of a principal

officer of the corporation, if such business be conducted by a

corporation, to the effect that the statements contained therein are

true.

5. If any provision of this section conflicts with any other provision

contained in this article, the provision of this section shall control,

but the provisions of this article which do not conflict with the

provisions of this section shall apply with respect to the taxes under

this section, so far as they are, or may be made applicable.

6. The tax imposed by this section shall be charged against and be

paid by the utility and may be added as a separate item to bills

rendered by the utility to customers. Upon request the utility shall

furnish a statement of the amount of tax imposed by this section to its

customers for bills rendered on or after January first, two thousand.

7. Notwithstanding any other provision contained in this or any other

law, in the event the city of New York shall enact a local law imposing

a tax on utilities, such as it imposed by this section, except as to the

rate of tax, the tax commission, in its discretion, may arrange with the

chief fiscal officer of said city for the collection by him of the tax

imposed by this section with respect to items that enter into the tax

base for both the tax imposed by said city and that imposed pursuant to

this section, and for the remittance by him of the tax imposed by this

section to the tax commission for disposition as in this article

provided. If such an arrangement be made, all the provisions of the

local law of said city imposing the local tax shall apply with respect

to the tax imposed by this section in the same manner as if the local

tax rate had included the tax imposed by this section.

9. Notwithstanding any other provision contained in this chapter or

any other law, any surcharge collected or any administrative fee

retained by any telephone corporation acting as collection agent for a

municipality pursuant to the provisions of article six of the county law

shall not be considered as nor included in the determination of gross

income or gross operating income of or by such corporation.