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Sales and Use Taxes on Electricity and Gas
According
to a Taxpayer Services Bureau memorandum issued by the
Department of Taxation & Finance,
June 9, 2000, (TSB-M-00(4)S), the implementation of a
sales tax on the transmission, transportation, and
distribution (TTD) of unbundled energy (electricity
and natural gas) as of 4/1/0 by administrative interpretation
is phased out legislatively along the following schedule;
- 25% on 9/1/0
- 50% on 9/1/1
- 75% on 9/1/2
- 100% on 9/1/3
Also, a Compensating Use
Tax (aka "use" tax) is created on out-of-state purchased energy (natural
gas and electricity) for use in New York State as of 6/1/0. This would impose
a use tax equal to the State sales tax (4%) and the prevailing local tax
rate (2% to 4.5%) on such energy purchases equal to their local sales tax.
These new administrative
actions supersede a series of Taxpayer Services Bureau memorandums issued
by the Department of Taxation & Finance on January 29, 1999 (TSB-M-99(1,
1.1,1.2,1.3,1.4)S) stating that the transportation of natural gas will
be subject to state and local sales tax effective April 1, 1999. This
policy allowed for current exemptions provided in the Tax Law for the
state portion on residential ratepayers bills, purchased by non-profit
organizations and purchases used directly and explicitly in the manufacturing
process. This aspect is carried over in the current administrative interpretation
as well.
Click
here for a documents providing pertinent details.
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