New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter I - Franchise and Certain Business Taxes › Subchapter F - Tax On The Furnishing Of Utility Services › Part 46 - Gross Operating Income › Section 46.3 - Inclusions in gross operating income

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Gross operating income includes receipts
				  from sales of gas, electricity, steam, water, refrigeration, telephony or
				  telegraphy, and from the furnishing of gas, electric, steam, water,
				  refrigerator, telephone or telegraph service, for ultimate consumption or use
				  within this State. It also includes receipts from transportation originating
				  in, terminating in or traversing this State, by omnibuses having a seating
				  capacity of more than seven persons, allocated within this State on a passenger
				  mileage basis.
Question 66:
Manufacturing plants sometimes have a surplus of gas,
					 electricity, steam, water or refrigeration, which they dispose of by selling to
					 others. Are such plants within the definition of utilities and subject to tax
					 on the receipts from such sales?
Answer:
Yes.
Question 67:
The owner or lessee of an apartment house or office
					 building purchases gas, electricity, steam, water or refrigeration and resells
					 the same to tenants either at flat or metered rates. Is the owner or lessee
					 subject to tax on the receipts from such sales?
Answer:
Yes.
Question 68:
Does it make any difference whether the owner or lessee of
					 the apartment house or office building resells the entire quantity purchased,
					 or only a portion thereof consuming the balance?
Answer:
No.
					 Where the owner or lessee uses or consumes a portion of the commodity or
					 service purchased, his vendor is taxable on its receipts from such
					 portion.
(b) Utilities in
				  the second class are required to report all purchases of commodities which form
				  the basis for the tax, regardless of whether they resell all that they purchase
				  or only a portion thereof. If they resell any part of the quantity they
				  purchase, they will be required to show in the detailed schedule of the tax
				  return the places where sales were made or services rendered, together with the
				  quantities sold and the amounts received on account of such sales, as well as
				  the quantities consumed by them.
(c) In order that the apartment house, office
				  building or other utility, which resells some part or all of the utility
				  service purchased, may support its claim that all such service was not resold
				  and that the utility which made the original sale may support its deduction of
				  the quantity resold by its purchaser, it is necessary for the apartment house,
				  office building or other utility so reselling utility services to report to its
				  vendor, as of the end of its billing period, the quantity resold. In the city
				  of New York, sales tax remission certificates may be accepted as such a report.
Question 69:
A utility sells 15,000 kilowatt hours of electricity to an
					 office building between June 29, 1950, and July 25, 1950, which is billed as
					 follows:
Demand charge .......
$100
10,000 K.W.H. at four cents .......
400
5,000 K.W.H at two cents .......
100
$600
The average price per K.W.H. is, therefore, four cents. The
					 office building, during a period ended in July, 1950, uses 6,000 K.W.H. and
					 resells 8,000 K.W.H. to its tenants for $400. What amount is taxable as gross
					 operating income of the office building?
Answer:
The office
					 building will be subject to tax on its receipts of $400.
(d) Where a hotel or apartment house
				  supplements for its guests or tenants the telephone service supplied them by
				  the telephone company and makes a charge therefor, the amount of such charge,
i.e.,
the excess above the charge of the telephone company, is
				  required to be included in gross operating income of the hotel or apartment
				  house. Where the telephone company graduates its charges for local messages
				  according to the number emanating from the hotel or apartment house, the
				  average charge of the telephone company for the reporting period shall be
				  employed in determining the amount of the supplemental charge made by the hotel
				  or apartment house.
Question 70:
A hotel or apartment house makes available to its guests or
					 tenants telephone service furnished by the telephone company. If the telephone
					 company charges five cents for its services in connection with a local message
					 and the hotel or apartment house 10 cents for its supplemental services, what
					 amount is the hotel or apartment house required to include in its gross
					 operating income?
Answer:
Ten cents per message.
Question 71:
A guest of a New York City hotel calls San Francisco, Cal.,
					 and Buffalo, N. Y. The telephone company charges $12 for the San Francisco call
					 and $1.80 for the Buffalo call. The hotel, for its supplemental service, adds
					 60 cents to the telephone charge for the San Francisco call and 10 cents to the
					 charge for the Buffalo call. What amount is the hotel required to include in
					 its gross operating income?
Answer:
Seventy cents, that being
					 its supplemental charge for telephone services rendered its guest.
(e)
(1) In determining gross operating income, as
				  in determining gross income, receipts include "cash, credits and property of
				  any kind or nature, with-out 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".
(2) Reference is made to section
				  45.5  and questions and answers 24
				  to 33, inclusive, for illustrations of the application of the provisions of the
				  law quoted in the last preceding paragraph.