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 44 - Definition Of Utility › Section 44.2 - Classes of utilities

Current through Register Vol. 46, No. 28, July 10, 2024
(a) In
				  the first class is "every utility doing business in this State which is subject
				  to the supervision of the State Department of Public Service," except a utility
				  "engaged in the business of operating or leasing sleeping and parlor railroad
				  cars or of operating railroads other than street surface, rapid transit, subway
				  and elevated railroads". Such utilities are taxable on gross income. Utilities
				  in this class are mainly street surface, rapid transit, subway and elevated
				  railroads, and all other nonoperating railroads which lease their property to
				  others, omnibus lines, gas, electric, steam, water, telephone, telegraph,
				  bridge, express, baggage, transfer and freight terminal companies. However, the
				  law exempts motor carriers or brokers subject to the supervision of the State
				  Department of Public Service under article 3-b of the Public Service Law. This
				  provision does not exempt motor carriers or brokers who are subject to such
				  supervision under other provisions of law.
(b)
(1) In
				  the second class, is "every other utility doing business in this state", which
				  includes every "person" (as defined in the law) "engaged in the business of
				  operating one or more omnibuses having a seating capacity of more than seven
				  passengers, and every person * * * who sells gas, electricity, steam, water,
				  refrigeration, telephony or telegraphy, delivered through mains, pipes or
				  wires, or furnishes gas, electric, steam, water, refrigerator, telephone or
				  telegraph service, by means of mains, pipes, or wires; regardless of whether
				  such activities are the main business of such person or are only incidental
				  thereto, or of whether use is made of the public streets". Such utilities are
				  taxable on gross operating income. The word person is defined as "persons,
				  corporations, companies, associations, joint-stock associations,
				  co-partnerships, estates, assignee of rents, any person acting in a fiduciary
				  capacity, or any other entity, and persons, their assignees, lessees, trustees
				  or receivers, appointed by any court whatsoever, or by any other means, except
				  the State, municipalities, political and civil subdivisions of the State or
				  municipality, and public districts".
(2) Utilities in the second class are mainly
				  those which, generally speaking, would not be classed as utilities but which
				  are made utilities by statute for the purpose of this tax. Ordinarily, although
				  there are exceptions, such as omnibuses, utilities in this group resell utility
				  services which are purchased from utilities in the first class.
(3) The following questions and answers are
				  illustrative of utilities in this class:
Question 1:Is the owner or lessee of a hotel, apartment
					 house or office building, who purchases gas, electricity, steam, water,
					 refrigeration or telephony and resells any part of all of the same to tenants,
					 subject to tax? Answer: Yes.
Question 2:A tenant in a hotel apartment house or office
					 building pays a lump sum as monthly rental, which includes gas, electric,
					 steam, water and telephone services or any one or more of such services. Is the
					 landlord subject to the tax? Answer: No. The landlord becomes taxable only if
					 he sells one or more of such utility services at identifiable, flat or metered
					 rates.
Question 3:Is a mutual telephone company, not subject to
					 public service regulation, subject to tax? Answer: Yes.
Question 4:Is a hotel subject to tax where it supplies
					 telephone services to its guests and makes a charge therefor? Answer:
					 Yes.
Question 5:A stock quotation company sells telegraph ticker
					 service to brokers in various localities, using wires leased from a telegraph
					 company. Is it engaged in the sale of telegraphy so as to be subject to the
					 tax? Answer: Yes.
Question 6:Is a cold storage plant, which stores perishable
					 foods or other articles for others, but does not deliver refrigeration to
					 others through mains or pipes, subject to tax? Answer: No.
Question 7:Is a concern that supplies refrigeration to
					 others by transmitting refrigeration fluid from a central point to the premises
					 of such other individuals, corporations or entities subject to tax? Answer:
					 Yes.
Question 8:A gas tank is installed on the premises of a
					 householder and connected with household outlets by a pipe, through which gas
					 is sold to him, either at metered rates or otherwise. The tank is refilled from
					 time to time. Is the householder's seller taxable? Answer: No.