N.Y. Comp. Codes R. & Regs. tit. 20 § 527.13

Current through Register Vol. 46, No. 45, November 2, 2024

Section 527.13 - Certain energy sources and services

Tax Law, § 1105-A

(a)Reduction in rate.

(1) Section 1105-A of the Tax Law provides for a reduction in the four-percent statewide sales tax rate imposed under sections 1105 (a) and 1105 (b) of the Tax Law and in the four-percent statewide compensating use tax rate imposed under section 1110 (a) of the Tax Law, as set forth in subdivision (c) of this section, on the receipts from every sale, other than for resale, used for residential purposes of:

(i) fuel oil (except diesel motor fuel);

(ii) coal;

(iii) wood (for heating purposes only);

(iv) propane (except when sold in containers of less than 100 pounds);

(v) natural gas;

(vi) electricity;

(vii) steam; and

(viii) gas, electric and steam services.

For purposes of this regulation, the term energy sources is used to describe the above- mentioned tangible personal property and services.

(2) The reduction in the sales and compensating use tax rates does not apply to those tax rates imposed by localities, pursuant to article 29 of the Tax Law, nor to the four-percent sales and compensating use tax rate in New York City which is imposed by section 1107 of the Tax Law. The applicable tax rates imposed by localities may be obtained from the Taxpayer's Assistance Bureau at the State Campus in Albany or from any district tax office.

(3) Nothing in this section shall be deemed to exempt from the tax imposed under section 1105 of the Tax Law any transaction which may not be subject to the reduced tax rates set forth in this section and under section 1105-A of the Tax Law.

(b)Transitional provisions.

(1) All sales of energy sources shall be subject to tax at the rate in effect on the date of delivery or transfer of possession, even if made or rendered under a contract entered into prior to the effective date of the tax rate reduction.

(2) Where energy sources are sold on a monthly, quarterly or other term basis and the bills for such sales are based on meter readings, the tax rate reduction shall not apply unless more than one half of the days included in the billing period are for days on and after the effective date of the tax rate reduction.

(c)Tax rates and effective dates.

The reduced State tax rates and effective dates are:

(1) 0 percent commencing on and after October 1, 1980;

(2) 21/2 percent commencing January 1, 1980 and ending September 30, 1980; and

(3) 3 percent commencing January 1, 1979 and ending December 31, 1979.

(d)Definitions.

(1) The term residential purposes means any use of a structure or part of a structure as a place of abode, maintained by or for a person, whether or not owned by such person, on other than a temporary or transient basis with the exclusion of accommodations subject to tax under subdivision (e) of section 1105 of the Tax Law.

(2) The term nonresidential purposes means any use other than for residential purposes, as defined in paragraph (1) of this subdivision, including any use in the conduct of a trade, business or profession, whether such trade, business or profession is carried on by the owner of the structure or some other person.

(3) The term common area means any area of the premises of a structure used without distinction for both residential and nonresidential purposes.

(e)Certification and allocation.

(1) Purchases of energy sources used exclusively for residential purposes shall receive the reduced tax rate without the necessity of certification.

(2) Where energy sources billed on a single meter or in a lump sum are used for both residential and nonresidential purposes, and the residential purposes constitute 75 percent or more of the usage, the entire amount billed shall be taxed at the reduced sales tax rate without certification. See paragraph (5) of this subdivision to determine the percentage of residential use.

(3) Where energy sources billed on a single meter or in a lump sum are used for both residential and nonresidential and less than 75 percent of the usage is for residential purposes, the purchaser is entitled to the reduced tax rate on only the percentage of energy sources used for residential purposes. This percentage shall be determined in accordance with paragraph (5) of this subdivision and shall be rounded off to the nearest 10 percent. A certificate shall be filed in the form provided and shall be given by the purchaser to the supplier of the energy sources. In the absence of such a certificate, the supplier of energy sources shall collect the full tax on the entire usage.

(4) Where a structure is exclusively used for nonresidential purposes, no certification or statement is required, since no eligibility for a reduced sales tax rate shall exist for purchases of energy sources and services.

(5) To determine the percentage of the area of a structure used for residential purposes, the following formula shall be used by the purchaser of the energy sources and services: total area of space used for residential purposes, excluding common areas, divided by the total area (residential and nonresidential), excluding common areas, equals the percentage rounded off to the nearest 10 percent applicable to use for residential purposes. Thus, if the percentage before rounding is 74.9 percent, the percentage when rounded is 70 percent.

(6) Certifications, when needed, may be obtained from the Taxpayer's Assistance Bureau at the State Campus in Albany, from any district tax office or from the supplier of the energy sources and services.

(f) Customer classification.

(1) Vendors of energy sources which are regulated by the New York State Public Service Commission and which have on file therewith a tariff or rate schedule which classifies its customer either as residential or nonresidential, may request from the Department of Taxation and Finance approval to use such classifications for determining the eligibility of its customer for a reduced sales tax rate without certification.

(2) All other vendors of energy sources may use from their records any classifications presently in use which classifies a customer as either a residential or nonresidential customer. If there is no such classification, the vendor is required to make a visual inspection of the structure to determine his customer's classification in accordance with subdivision (e) of this section for eligibility for a reduced sales tax rate without certification.

(3) Every supplier of energy sources who has received from his customer a certification claiming eligibility for a reduced sales tax rate shall not be held liable, except in the case of his fraud, for any misrepresentations made by the customer on the certification or for any tax not collected by granting the sales tax rate reduction based on such certification.

(4) Where a customer is eligible for the reduced tax rate, as a residential customer described in paragraph (1) or (2) of subdivision (e) of this section, but the supplier of energy sources has not classified him as a residential user, the customer should furnish the supplier with a certification.

(g)Collection of tax.

(1) Every vendor, making a sale of energy sources to a customer who is classified as a residential customer, shall collect the sales tax at the reduced sales tax rate on such customer's total purchase.

(2) Every supplier of energy sources who has received from his customer a certification shall collect the sales tax at the reduced rate on the portion of the purchase shown as being used for residential purposes and shall collect the tax at the full rate on the remainder which is used for nonresidential purposes.

(3) Every vendor making sales of energy sources which are used for nonresidential purposes shall collect the sales tax at the full rate.

(h)Reporting and remitting.

Every vendor making sales of energy sources which are taxed at a reduced rate shall, in addition to the usual reporting form, complete and file a Schedule B as part of its sales tax report and remit the appropriate tax therewith.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 527.13