| |
NATURAL GAS
IMPORT TAX LITIGATION/LEGISLATION
The
Governor signed into law S.5824/A.9458 and S.5828/A.9459 as
chapters 382 and 383 respectively on October 29, 2001.
Of
interest to the Energy Committee was the creation of a credit
against the Gas Importation Privilege Tax (Section 189); this
newly established credit was made retroactive to August 1,
1991 in order to foil the Court of Appeals' finding in Tennessee
Gas Pipeline v. Urbach. Therein, the Court found
Section 189 to be unconstitutional on its face due to the
theoretical possibility of gas importers being taxed at a
higher rate than the rate on in-State gas purchasers. The
new credit was set equal to the Section 186 Gross Receipts
Tax rate in effect (Note: the Section 186 rate was 0.75% until
January 1, 2000 when it was repealed.) and is only available
to gas importers who actually paid a Section 186-like tax
to another state. Since no other state had a Section 186-like
tax, the retroactive credit costs New York nothing, but, if
accepted by the Court, it would prevent some $75 million of
potential refunds to taxpayers who before January 1, 2000
imported gas for use within New York. Besides the retroactivity
issue, the legislation did not address the period of October
1, 1998 through December 31, 1999 (Tennessee Gas Pipeline
v. Urbach dealt with a five-year period ending in 1996)
when the GIPT rate on out-of-State purchasers was 4.25%, while
the in-State combined rate of Sections 186 and 186-a was 4.0%.
Last
updated: November 16, 2001
|
| |
|
