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June 11, 1998 

Electricity resale tax

The Council is urging legislators to pass a bill to nullify a tax on the re-sale of electricity-a tax that is an unintended effect of the deregulation of New York's electricity markets.

The sale of electricity is now subject to a one-time tax of .75 percent, said Kevin Lanahan, The Council's specialist in energy issues.

Before the market became competitive, power typically changed hands only once, and this tax was, as intended, a one-time levy, he said.

Now, the changing market means that new marketers, brokers, and energy service companies could trade power many times before it is sold to consumers, with each transaction subject to the same tax.

"This unintended tax increase runs counter to the intent of competition in electricity markets," he said.

Lanahan noted that state and local taxes included on utility bills in New York are already excessive and burdensome relative to other states in the Northeastern region and the rest of the country.