N.Y. Tax Law § 186-A — Tax on the furnishing of utility services

§ 186-a. Tax on the furnishing of utility services. 1. Notwithstanding\nany other provision of this chapter, or of any other law, (a) a tax\nequal to three and one-quarter percent through December thirty-first,\nnineteen hundred ninety-nine, and two and one-half percent on and after\nJanuary first, two thousand of its gross income is hereby imposed upon\nevery provider of telecommunication services doing business in this\nstate which is subject to the supervision of the state department of\npublic service which has a gross income for the year ending December\nthirty-first in excess of five hundred dollars;\n (b) a tax equal to (1) two and five-tenths percent on and after\nJanuary first, two thousand through December thirty-first, two thousand,\ntwo and forty-five one hundredths percent from January first, two\nthousand one through December thirty-first, two thousand one, two and\nfour-tenths percent from January first, two thousand two through\nDecember thirty-first, two thousand two, two and twenty-five one\nhundredths percent from January first, two thousand three through\nDecember thirty-first, two thousand three, two and one hundred\ntwenty-five one thousandths percent from January first, two thousand\nfour through December thirty-first, two thousand four and two percent\ncommencing January first, two thousand five and thereafter of that\nportion of its gross income derived from the transportation,\ntransmission or distribution of gas or electricity by means of conduits,\nmains, pipes, wires, lines or the like and (2) two and one-tenth percent\nfrom January first, two thousand through December thirty-first, two\nthousand, two percent from January first, two thousand one through\nDecember thirty-first, two thousand one, one and nine-tenths percent\nfrom January first, two thousand two through December thirty-first, two\nthousand two, eighty-five one hundredths of one percent from January\nfirst, two thousand three through December thirty-first, two thousand\nthree, four-tenths of one percent from January first, two thousand four\nthrough December thirty-first, two thousand four and zero percent\ncommencing January first, two thousand five of all of its other gross\nincome, is hereby imposed upon every utility not taxed under paragraph\n(a) of this subdivision doing business in this state which is subject to\nthe supervision of the state department of public service which has a\ngross income for the year ending December thirty-first in excess of five\nhundred dollars, except motor carriers or brokers subject to such\nsupervision under the public service law; and\n (c) a tax equal to three and one-quarter percent through December\nthirty-first, nineteen hundred ninety-nine, two and one-tenth percent\nfrom January first, two thousand through December thirty-first, two\nthousand, two percent from January first, two thousand one through\nDecember thirty-first, two thousand one, one and nine-tenths percent\nfrom January first, two thousand two through December thirty-first, two\nthousand two, eighty-five one hundredths of one percent from January\nfirst, two thousand three through December thirty-first, two thousand\nthree, four-tenths of one percent from January first, two thousand four\nthrough December thirty-first, two thousand four and zero percent\ncommencing January first, two thousand five of its gross operating\nincome is hereby imposed upon every other utility doing business in this\nstate which has a gross operating income for the year ending December\nthirty-first in excess of five hundred dollars, which taxes shall be in\naddition to any and all other taxes and fees imposed by any other\nprovision of law for the same period.\n 2. As used in this section, (a) the word "utility" includes every\nperson (including every provider of telecommunication services) subject\nto the supervision of the state department of public service, except\npersons engaged in the business of operating on the public highways of\nthis state one or more omnibuses, having a seating capacity of more than\nseven persons, and persons engaged in the business of operating or\nleasing sleeping and parlor railroad cars or of operating railroads\nother than street surface, rapid transit, subway and elevated railroads,\nand also includes every person (whether or not such person is subject to\nsuch supervision) who sells gas, electricity, steam, water or\nrefrigeration, delivered through mains, pipes or wires, or furnishes\ngas, electric, steam, water or refrigerator service, by means of mains,\npipes, or wires; regardless of whether such activities are the main\nbusiness of such person or are only incidental thereto, or of whether\nuse is made of the public streets;\n (b) the word "person" means persons, corporations, companies,\nassociations, joint-stock companies or associations, partnerships and\nlimited liability companies, estates, assignee of rents, any person\nacting in a fiduciary capacity, or any other entity, and persons, their\nassignees, lessees, trustees or receivers, appointed by any court\nwhatsoever, or by any other means, except the state; municipalities,\npolitical and civil subdivisions of the state or municipality and public\ndistricts (provided, however, that with respect to gas, electricity and\ngas or electric service, including the sale of the transportation,\ntransmission or distribution of gas or electricity, such municipalities,\npolitical and civil subdivisions and public districts shall be excluded\nfrom the definition of "person" if they own and operate facilities which\nare used to generate or distribute electricity or distribute gas and\nthey distribute and sell such gas or electricity solely at retail,\nsolely within their respective jurisdiction; or provided, further, with\nrespect to the sale of electricity or the transportation, transmission\nor distribution of electricity, a municipality shall be excluded from\nthe definition of "person" if it sells electricity at retail where all\nsuch electricity (excluding temporary substitution power during outages\nor periods of reduced output) has been generated solely by and purchased\nsolely from the state or a public authority of the state); corporations\nand associations which are organized and operated exclusively for\nreligious, charitable or educational purposes, no part of the net\nearnings of which inures to the benefit of any private shareholder or\nindividual, and which are described in paragraph four of subdivision (a)\nof section eleven hundred sixteen of this chapter where such\norganization resells such gas or electricity or gas or electric service\nas landlord to its tenants in buildings owned by such organization; and\nexcepting a corporation organized and operated exclusively for the\npurpose of leasing from a city in this state a water-works system\ndesigned to supply water at cost to users thereof for discharge, either\nbefore or after industrial use, into a river within such city in order\nto improve the flow and condition of such river and thereby to provide a\nmeans to relieve such river from pollution;\n (c) the words "gross income" mean and include receipts received in or\nby reason of any sale, conditional or otherwise, (except sales\nhereinafter referred to with respect to which it is provided that\nprofits from the sale shall be included in gross income) made or service\nrendered for ultimate consumption or use by the purchaser in this state,\nincluding cash, credits and property of any kind or nature (whether or\nnot such sale is made or such service is rendered for profit), without\nany deduction therefrom on account of the cost of the property sold, the\ncost of materials used, labor or services or other costs, interest or\ndiscount paid, or any other expense whatsoever.\n (1) Provided, however, that all receipts from sales of the\ntransportation, transmission or distribution of gas or electricity by\nmeans of conduits, mains, pipes, wires, lines or the like, rendered or\nperformed in this state, shall be included in gross income except\nreceipts from (i) sales of the transportation, transmission or\ndistribution of gas or electricity to (A) a utility (excluding a public\nauthority) which is supervised by this state or another jurisdiction\n(where an element of such supervision includes rate regulation and, for\na utility supervised by another jurisdiction, such supervision includes\nrate regulation and such gas or electricity is delivered for ultimate\nconsumption or use outside this state), (B) a municipality which owns\nand operates facilities which are used to generate or distribute\nelectricity or distribute gas and which distributes and sells such\nelectricity or gas solely at retail, solely within its respective\njurisdiction, or (C) a public authority of this state where such public\nauthority is primarily engaged in the generation and transmission or\ndistribution of electricity or the distribution of electricity or gas\nand at least ninety-five percent of the assets of which are so devoted,\nprovided, that, if the service area or district of the authority is less\nthan the entire state, the excluded receipt shall be limited to receipts\nderived from the sale of transportation, transmission or distribution of\ngas or electricity, which electricity or gas will be sold by such\nauthority at retail within its service area or district; where, as the\ncase may be, such utility or authority purchasing such transportation,\ntransmission or distribution sells the gas or electricity being so\ntransported, transmitted or distributed, (ii) sales of the\ntransportation, transmission or distribution of electricity to a\nmunicipality where the electricity being transported has been purchased\nby such municipality and has been generated solely by and purchased\nsolely from the state or a public authority of the state (except where\nthe electricity being transported constitutes temporary substitution\npower being supplied during outages or periods of reduced output) and\nwhere such municipality purchasing such transportation, transmission or\ndistribution, sells solely at retail, solely within its respective\njurisdiction, the electricity being so transported, transmitted or\ndistributed, (iii) sales of the transportation, transmission or\ndistribution of gas or electricity to corporations and associations\nwhich are organized and operated exclusively for religious, charitable\nor educational purposes, no part of the net earnings of which inures to\nthe benefit of any private shareholder or individual, and which are\ndescribed in paragraph four of subdivision (a) of section eleven hundred\nsixteen of this chapter where such organization resells such\ntransportation, transmission or distribution as part of a bundled gas or\nelectric service as landlord to its tenants in buildings owned by such\norganization, or (iv) sales of the transportation, transmission or\ndistribution of gas or electricity, not otherwise excluded, to\nnonresidential customers, but only in accordance with the following\nschedule: for the sales during the calendar years two thousand and two\nthousand one, zero percent of the receipts from such sales shall be\nexcluded; for the sales during the calendar year two thousand two,\ntwenty-five percent of the receipts from such sales shall be excluded;\nfor sales during the calendar year two thousand three, fifty percent of\nthe receipts from such sales shall be excluded; for sales during the\ncalendar year two thousand four, seventy-five percent of the receipts\nfrom such sales shall be excluded; and for sales thereafter, one hundred\npercent of such sales shall be excluded. For the purposes of this\nclause, the term "nonresidential customers" means those customers whose\nuse of gas or electricity, or gas or electric service does not qualify\nfor the reduced rate of sales and compensating use tax on gas,\nelectricity, or gas or electric service under section eleven hundred\nfive-A of article twenty-eight of this chapter.\n (2) Provided, further, receipts received from the sale of the\ntransportation, transmission or distribution of gas or electricity shall\nmean the receipts received from customers representing the noncommodity\ncharges for gas or electric service.\n (3) Provided, further, gross income with respect to a provider of\ntelecommunication services shall not include receipts from the sale of\ntelecommunication services as such services are defined in section one\nhundred eighty-six-e of this article.\n (4) Provided, further, sales of gas, electricity, steam, water or\nrefrigeration or gas, electric, steam, water or refrigerator service to\na landlord that is a person as defined in this subdivision for resale by\nsuch landlord to a tenant, for consumption by such tenant as an incident\nto such landlord's activity of renting premises to such tenant, shall be\nsubject to the tax imposed under this section even though such sales are\nnot for ultimate consumption by such landlord. Provided, further,\nreceipts derived by a landlord from the resale for such gas,\nelectricity, steam, water or refrigeration or furnishing gas, electric,\nsteam, water or refrigerator service to such tenant shall be\nconclusively presumed to be equal to such landlord's cost of the same,\nand, if the tax under this section was imposed on the sale to such\nlandlord, no additional tax under this section shall be owing on the\nsale by such landlord to such tenant. If, however, the tax under this\nsection was not imposed on such sale to the landlord, then such landlord\non the sale to its tenant shall file a return hereunder based on such\nlandlord's cost (including any associated transportation cost) of such\ngas, electricity, steam, water or refrigeration or gas, electric, steam,\nwater or refrigerator service.\n (5) "Gross income" also includes profits from the sale of securities;\nalso profits from the sale of real property growing out of the ownership\nor use of or interest in such property; also profit from the sale of\npersonal property (other than property of a kind which would properly be\nincluded in the inventory of the taxpayer if on hand at the close of the\nperiod for which a return is made); also receipts from interest,\ndividends, and royalties, derived from sources within this state other\nthan such as are received from a corporation a majority of whose voting\nstock is owned by the taxpaying utility, without any deduction therefrom\nfor any expenses whatsoever incurred in connection with the receipt\nthereof, also profits from any transaction (except sales for resale and\nrentals) within this state whatsoever;\n (d) the words "gross operating income" mean and include receipts\nreceived in or by reason of any sale, conditional or otherwise, made for\nultimate consumption or use by the purchaser of gas, electricity, steam,\nwater or refrigeration, or in or by reason of the furnishing for such\nconsumption or use of gas, electric, steam, water or refrigerator\nservice in this state, including cash, credits and property of any kind\nor nature, without any deduction therefrom on account of the cost of the\nproperty sold, the cost of materials used, labor or services or other\ncosts, interest or discount paid, or any other expenses whatsoever.\nProvided, however, there shall be excluded from gross operating income\nreceipts representing the amount received from the resale of the\ntransportation, transmission or distribution of gas or electricity in\nthis state where such transportation, transmission or distribution being\nresold is provided by a utility subject to tax under paragraph (b) of\nsubdivision one of this section; the receipts representing the amount\nreceived from resale of such transportation, transmission or\ndistribution shall be the amount received for such transportation,\ntransmission or distribution by such utility which initially provided\nsuch transportation, transmission or distributions. Provided, further,\nsales of gas, electricity, steam, water or refrigeration or gas,\nelectric, steam, water or refrigerator service to a landlord that is a\nperson as defined in this subdivision for resale by such landlord to a\ntenant, for consumption by such tenant as an incident to such landlord's\nactivity of renting premises to such tenant, shall be subject to the tax\nimposed under this section even though such sales are not for ultimate\nconsumption by such landlord. Provided, further, receipts derived by a\nlandlord from the resale of such gas, electricity, steam, water or\nrefrigeration or furnishing gas, electric, steam, water or refrigerator\nservice to such tenant shall be conclusively presumed to be equal to\nsuch landlord's cost of the same, and, if the tax under this section was\nimposed on the sale to such landlord, no additional tax under this\nsection shall be owing on the sale by such landlord to such tenant. If\nthe tax under this section was not imposed on such sale to the landlord,\nthen such landlord on the sale to its tenant shall file a return\nhereunder based on such landlord's cost (including any associated\ntransportation cost) of such gas, electricity, steam, water or\nrefrigeration or gas, electric, steam, water or refrigerator service;\n (e) the term "telecommunication services" shall have the same meaning\nas such term is defined in section one hundred eighty-six-e of this\narticle;\n (f) The word "premises" means and includes any real property or part\nthereof, and any structure thereon or space therein; and\n (g) the word "tenant" means and includes a person paying, or required\nto pay, rent for premises as a lessee, sublessee, licensee or\nconcessionaire.\n 2-a. Tax adjustment for utilities with financial resource asset for\ntaxable years commencing on and after January first, nineteen hundred\nninety-two. Notwithstanding any provision of this section to the\ncontrary, in the event that a utility which is taxable under this\nsection is an electric corporation, as defined in subdivision thirteen\nof section two of the public service law, which, on or before the\neffective date of this subdivision, has been permitted by the public\nservice commission to establish for ratemaking purposes a financial\nresource asset (which asset shall represent, in an amount approved by\nthe public service commission on or before the effective date of this\nsubdivision, the present value of a stream of future cash flows, rather\nthan actual land, land rights, physical structures, improvements or\nother physical items, franchises or intangible plant), such an electric\ncorporation shall be allowed an adjustment by way of the allowance of a\ndeduction from its gross income subject to tax under subdivision one of\nthis section equal to the amount by which (a) that portion of gross\nincome received in any year after nineteen hundred ninety-one which\nrepresents the total return authorized by the public service commission\nto be recovered in rates on the financial resource asset, including\namortization, exceeds (b) that portion of gross income received in the\ntwelve-month period immediately preceding the month in which the\nfinancial resource asset is established pursuant to authorization of the\npublic service commission and which represents (i) the total revenue\nderived from any financial stability adjustment and (ii) the total\nreturn on interest-bearing construction work in progress in the rate\nbase permitted by the public service commission. No electric corporation\nshall be allowed the tax adjustment authorized by this subdivision until\nit shall file, together with the return required to be filed pursuant to\nsubdivision four of this section, a certificate for the period covered\nby the return from the department of public service verifying that the\ncalculation of such tax adjustment complies with this subdivision. The\nadjustment to gross income allowed by this subdivision shall not be\napplicable in calculating any other tax imposed or authorized to be\nimposed by this chapter or any other law, and the amount of tax\nsurcharge equal to seventeen per centum imposed pursuant to section one\nhundred eighty-six-c of this article, and the amount of the tax\nsurcharge imposed under section one hundred eighty-eight of this\narticle, shall be calculated and payable as if the adjustment provided\nin this subdivision were not allowed.\n 3. Every utility subject to tax under this section shall keep such\nrecords of its business and in such form as the tax commission may\nrequire, and such records shall be preserved for a period of three\nyears, except that the tax commission may consent to their destruction\nwithin that period or may require that they be kept longer.\n 4. Every utility subject to tax hereunder shall file, on or before\nMarch fifteenth of each year, a return for the year ended on the\npreceding December thirty-first, for taxable years beginning before\nJanuary first, two thousand sixteen, except that the year ended on\nDecember thirty-first, nineteen hundred seventy-six shall be deemed, for\nthe purposes of this subdivision, to have commenced on June first,\nnineteen hundred seventy-six, and shall file, on or before April\nfifteenth of each year, a return for the year ended on the preceding\nDecember thirty-first, for taxable years beginning on or after January\nfirst, two thousand sixteen, including any period for which the tax\nimposed hereby or by any amendment hereof is effective, each of which\nreturns shall state the gross income or gross operating income for the\nperiod covered by each such return. Returns shall be filed with the\ncommissioner of taxation and finance on a form to be furnished by the\ncommissioner for such purpose and shall contain such other data,\ninformation or matter as the commissioner may require to be included\ntherein. Notwithstanding the foregoing provisions of this subdivision,\nthe commissioner may require any utility to file an annual return, which\nshall contain any data specified by the commissioner, regardless of\nwhether the utility is subject to tax under this section; and the\ncommissioner may require a landlord selling to a tenant gas, electric,\nsteam, water or refrigeration or furnishing gas, electric, steam, water\nor refrigerator service, where the same has been subjected to tax under\nthis section on the sale to such landlord, to file, on or before the\nfifteenth day of March of each year, for taxable years beginning before\nJanuary first, two thousand sixteen, and on or before the fifteenth day\nof April of each year, for taxable years beginning on or after January\nfirst, two thousand sixteen, an information return for the year ended on\nthe preceding December thirty-first, covering such year in such form and\ncontaining such data as the commissioner may specify. Every return shall\nhave annexed thereto a certification by the head of the utility making\nthe same, or of the owner or of a co-partner thereof, or of a principal\nofficer of the corporation, if such business be conducted by a\ncorporation, to the effect that the statements contained therein are\ntrue.\n 5. If any provision of this section conflicts with any other provision\ncontained in this article, the provision of this section shall control,\nbut the provisions of this article which do not conflict with the\nprovisions of this section shall apply with respect to the taxes under\nthis section, so far as they are, or may be made applicable.\n 6. The tax imposed by this section shall be charged against and be\npaid by the utility and may be added as a separate item to bills\nrendered by the utility to customers. Upon request the utility shall\nfurnish a statement of the amount of tax imposed by this section to its\ncustomers for bills rendered on or after January first, two thousand.\n 7. Notwithstanding any other provision contained in this or any other\nlaw, in the event the city of New York shall enact a local law imposing\na tax on utilities, such as it imposed by this section, except as to the\nrate of tax, the tax commission, in its discretion, may arrange with the\nchief fiscal officer of said city for the collection by him of the tax\nimposed by this section with respect to items that enter into the tax\nbase for both the tax imposed by said city and that imposed pursuant to\nthis section, and for the remittance by him of the tax imposed by this\nsection to the tax commission for disposition as in this article\nprovided. If such an arrangement be made, all the provisions of the\nlocal law of said city imposing the local tax shall apply with respect\nto the tax imposed by this section in the same manner as if the local\ntax rate had included the tax imposed by this section.\n 9. Notwithstanding any other provision contained in this chapter or\nany other law, any surcharge collected or any administrative fee\nretained by any telephone corporation acting as collection agent for a\nmunicipality pursuant to the provisions of article six of the county law\nshall not be considered as nor included in the determination of gross\nincome or gross operating income of or by such corporation.\n