2010 New York Code
TAX - Tax
Article 13-A - (300 - 315) TAX ON PETROLEUM BUSINESSES
301-I - Energy business.

§  301-i.  Energy  business. (a) Imposition of tax. For taxable months
  commencing on and after July  first,  nineteen  hundred  ninety-one  and
  ending  before  September  first,  nineteen hundred ninety-one, there is
  hereby imposed on every energy business for the privilege of engaging in
  business, doing business, employing capital, owning or leasing property,
  or maintaining an office in this state, a monthly tax for  each  or  any
  part  of  a  taxable  month  equal  to  the  energy  business  component
  determined pursuant to subdivision (b) of  this  section.  In  no  event
  shall  the  tax imposed by this section be less than twenty-five dollars
  for each or any part of a taxable month.
    (b) Energy business component. The energy business component shall  be
  determined  by  multiplying the energy business rate times the number of
  thousand cubic feet (hereinafter abbreviated as "Mcf") of natural gas or
  fraction thereof sold or used in this state by an energy business during
  the month covered by the return under this  section.  The  basic  energy
  business  rate  shall be forty-four and one-half cents per Mcf. The rate
  shall be adjusted at the same times as the rates of  the  components  of
  the  tax  on petroleum businesses imposed by section three hundred one-a
  of this article, and the method of  making  adjustments  to  the  energy
  business  rate  shall be performed in the same manner as the method used
  with respect to such rates for  petroleum  businesses  except  that  the
  adjustment  of  the energy business rate shall be gauged by reference to
  the monthly producer price index (unadjusted) published by the bureau of
  labor statistics of the  United  States  department  of  labor  for  the
  commodity  category designated "natural gas". The provisions relating to
  publication and rounding of rate relating to the rates of the  petroleum
  business tax contained in subdivision (h) of section three hundred one-a
  of this article shall apply to the energy business rate adjustments. The
  surcharge  imposed  pursuant  to  section  three  hundred  one-g of this
  article shall apply to tax imposed by this section.
    (c) Definitions. As used in this section, the term  "energy  business"
  means  every  corporation  and  unincorporated  business  (i)  importing
  natural gas or causing natural gas to be imported into  this  state  for
  use,  distribution,  storage  or  sale  in  the  state,  (ii) producing,
  extracting or manufacturing natural gas in the state, or (iii) making  a
  sale or use of natural gas in the state other than a self-use of natural
  gas  which  has  been the subject of a retail sale in this state to such
  corporation or unincorporated  business.  The  term  "energy  business",
  without intending to otherwise limit the definitions of "corporation" or
  "unincorporated  business" contained in subdivision (a) of section three
  hundred  of  this  article,  includes  every  corporation,   joint-stock
  company,  consortium  or association whether or not ownership thereof or
  interest therein is evidenced by stock or whether or  not  operated  for
  the  purpose  of  making  a profit or whether or not it is operated on a
  cooperative basis. Provided, however, the term "energy  business"  shall
  not  include  an  individual  who  produces,  extracts,  or manufactures
  natural  gas  in  this  state  exclusively  for  such  individual's  own
  residential  use.  The  term  "nonutility  electric generator" means any
  energy  business  which  is  a  cogeneration  facility  as  defined   in
  subdivision  two-a  of  section  two  of the public service law, or is a
  qualifying facility defined by section two hundred  one  of  the  Public
  Utility Regulatory Policies Act of 1978 (Public Law 95-617), or that has
  executed  or will execute a contract for the sale of electricity through
  negotiation or through an auction conducted by an  electric  corporation
  pursuant  to  a  competitive bidding plan approved by the public service
  commission.

(d) Exemptions. The following  quantities  of  natural  gas  otherwise
  includable  in  the  measure of the tax imposed by this section shall be
  exempt from the measure of such tax:
    (1)  Natural  gas  sold  by  an  energy  business  to  an organization
  described in paragraph one or two of subdivision (a) of  section  eleven
  hundred  sixteen  of this chapter where such natural gas is used by such
  organization for its own use or consumption.
    (2) Sales of natural gas other than retail sales by an energy business
  registered under this article  to  another  energy  business  registered
  under this article.
    (3)  Sales  of  natural  gas  by  an  energy business to consumers for
  residential purposes exclusively, and natural gas used or consumed by an
  energy business for residential purposes exclusively.
    (4) Sales  or  uses  of  natural  gas  by  an  energy  business  under
  circumstances  whereby  such  natural  gas  is subject to taxation under
  section three hundred one-a of this article as part of  the  motor  fuel
  component thereof.
    (5)  Natural  gas  sold  to  an  electric corporation, as described in
  subdivision (a) of section three hundred one-d of this article which  is
  registered  with  the  department of taxation and finance as a petroleum
  and other energy business tax direct pay permittee,  and  used  by  such
  electric corporation to fuel generators for the purpose of manufacturing
  or producing electricity where such electric corporation provides a copy
  of  a  direct  pay  permit  authorized and issued by the commissioner of
  taxation and finance, to the energy business making  such  sale.  If  so
  registered,  such corporation shall be a taxpayer under this article and
  (i) such electric corporation shall file a return monthly  and  pay  the
  applicable  tax  under  this article, after the application of allowable
  credits, on all such purchases directly to the commissioner,  (ii)  such
  electric  corporation  shall be subject to all of the provisions of this
  article relating to the responsibilities and  liabilities  of  taxpayers
  under  this  article with respect to such natural gas. The provisions of
  paragraphs two and three of subdivision (f)  of  section  three  hundred
  one-b  of  this  article  shall  apply  to  all  sales  relating to this
  paragraph.
    (6) Natural gas sold to a co-generation  facility,  as  such  term  is
  defined  in  subdivision two-a of section two of the public service law,
  or a qualifying facility which is a co-generation facility, as such term
  is defined by section two hundred one of the Public  Utility  Regulatory
  Policies  Act  of  1978  (Public  Law  95-617),  and  used  to  generate
  electricity and/or steam produced by such facility when such electricity
  or steam is supplied to and used by a thermal energy host located at  or
  near  the project site, provided, that the portion of natural gas exempt
  shall be determined by multiplying the total amount of natural gas  used
  by  such facility by a fraction, the numerator of which is the Btu value
  of the steam used by such host plus the Btu  value  of  the  electricity
  used by such host and the denominator of which is the total Btu value of
  all the useful steam and electricity produced by the facility.
    (7)  Natural  gas  which is produced, extracted or manufactured in the
  state by an energy business and which is used exclusively  for  its  own
  use and consumption, provided that this exemption shall not apply to any
  person who makes sales of natural gas in the regular course of business.
    (e)  Utility  credit  or  reimbursement.  (1) Natural gas eligible for
  credit  or  reimbursement.  An  electric  corporation,  as  defined   in
  subdivision  thirteen  of section two of the public service law, subject
  to the supervision of the department of public service or  a  nonutility
  electric  generator,  shall  be  entitled  to  a  credit against the tax

imposed by this section or a reimbursement of such tax with  respect  to
  the following quantities of natural gas:
    (A)  Credit.  Natural  gas  (i)  imported into this state or produced,
  extracted or manufactured in the state by such electric  corporation  or
  nonutility  electric  corporation  where  the  tax  liability under this
  section is imposed on such electric corporation and where  such  natural
  gas  is  used  by  such  electric  corporation  or  nonutility  electric
  corporation to fuel generators  for  the  purpose  of  manufacturing  or
  producing electricity for residential purposes or (ii) purchased in this
  state by such electric corporation or nonutility electric corporation by
  the  use  of  a  valid  direct  payment  permit  whereby  such  electric
  corporation or nonutility electric generator assumed full liability  for
  tax  with  respect to such product and where such natural gas is used by
  such electric corporation  or  nonutility  electric  generator  to  fuel
  generators for the purpose of manufacturing or producing electricity for
  residential  purposes. For the purpose of this paragraph the quantity of
  natural  gas  imported,  manufactured  or  produced  to  manufacture  or
  generate  electricity for residential purposes shall be the total amount
  of natural gas used during the  reporting  period  for  the  purpose  of
  manufacturing  or producing all electricity multiplied by a fraction the
  numerator of which is the amount of electricity sold during such  period
  by   such   electric   corporation  for  residential  purposes  and  the
  denominator of which is  the  total  amount  of  all  electricity  sold,
  exclusive  of  sales  for  resale,  during  such period by such electric
  corporation, whether for residential or other purposes. With respect  to
  a  nonutility  electric  generator,  the  amount  shall be the amount of
  natural gas  used  during  the  reporting  period  for  the  purpose  of
  manufacturing  or  producing electricity sold to an electric corporation
  multiplied by a fraction  the  numerator  of  which  is  the  amount  of
  electricity  sold  during  such  period for residential purposes by such
  electric corporation  which  is  purchasing  such  electricity  and  the
  denominator  of which is the total amount of all electricity sold during
  such period by such electric corporation, exclusive of sales for resale,
  whether for residential or other purposes.   The purpose of  the  credit
  created  by  this  paragraph  is to hold residential ratepayers harmless
  from the burden of the tax imposed by this section. In  accordance  with
  that  intent,  the  public  service commission shall, in its rate making
  capacity, ensure that residential ratepayers do not bear such tax burden
  under this section and do not bear any of the tax surcharge  imposed  by
  section  three  hundred-one-g of this article in the cost of electricity
  to such residential ratepayers.
    (B) Reimbursement.  Natural  gas  purchased  in  this  state  by  such
  electric  corporation where the tax imposed by this section with respect
  to such natural gas was paid and the electric corporation absorbed  such
  tax in the purchase price of such natural gas and where such natural gas
  is  used by such electric corporation to fuel generators for the purpose
  of manufacturing or producing electricity for residential purposes.  For
  the  purpose of this paragraph the quantity of natural gas purchased for
  residential purposes shall be the  total  amount  of  natural  gas  used
  during  the  reporting  period  for  the  purpose  of  manufacturing  or
  producing all electricity multiplied by  a  fraction  the  numerator  of
  which  is  the  amount  of  electricity  sold during such period by such
  electric corporation for residential purposes  and  the  denominator  of
  which  is  the  total amount of all electricity sold, exclusive of sales
  for resale, during such period by such electric corporation, whether for
  residential or other purposes.  The purpose of the reimbursement created
  by this paragraph is to hold residential ratepayers  harmless  from  the
  burden  of  the  tax  imposed  by  this section. In accordance with that

intent,  the  public  service  commission  shall,  in  its  rate  making
  capacity,  ensure that residential ratepayers do not bear the tax burden
  under this section and do not bear any of the tax surcharge  imposed  by
  section  three  hundred-one-g of this article in the cost of electricity
  to such residential ratepayers.
    (2) Calculation. The amount of the credit or  reimbursement  shall  be
  determined  by multiplying the number of Mcf of natural gas eligible for
  the credit or reimbursement times the basic credit or reimbursement  per
  Mcf  of forty-four and one-half cents. The basic credit or reimbursement
  per Mcf shall be adjusted at the same time and in the same manner as the
  rate of tax on energy business is as provided in subdivision (b) of this
  section.  The  credit  or  reimbursement  determined  pursuant  to  this
  subdivision shall be rounded to the nearest tenth of a cent.
    (f) All the provisions of this article relating to the administration,
  collection,  review  and  disposition  of  the  tax imposed on petroleum
  businesses, including the provisions relating to  definitions,  returns,
  personal  liability  for  the  tax  and  the  registration provisions of
  section three  hundred  two  of  this  article  applicable  to  residual
  petroleum  product  businesses,  shall  apply to the tax imposed by this
  section and the registration under this  article  of  energy  businesses
  with  such  modification  as  may  be  necessary  in  order to adapt the
  language of  such  provisions  to  the  tax  imposed  by  this  section,
  provided,  specifically,  that,  as used in section three hundred two of
  this article, the term "residual petroleum product"  shall  be  read  as
  "natural  gas"  and the term "residual petroleum product business" shall
  be read as "energy business". When reference in this article is made  to
  "the  tax  imposed  under this article" or where words of similar import
  are used, unless the context clearly indicates otherwise, such reference
  shall include the tax imposed under this section.  The  tax  imposed  by
  this  section  may be administered jointly in conjunction with, and as a
  part of, the tax imposed on petroleum businesses as if the provisions of
  subdivision (a) of this section, imposing the tax  under  this  section,
  were  made  a part of the imposition provisions of section three hundred
  one-a,  except  where  not  applicable  to  or  inconsistent  with   the
  provisions  of  this  section. Provided, further, that the provisions of
  section three hundred five shall not apply to the tax imposed under this
  section.  Provided,  further,  that  all  tax,  interest  and  penalties
  collected or received with respect to the tax imposed under this section
  shall  be  deposited  and  disposed  of  pursuant to section one hundred
  seventy-one-a of this chapter. The department of public service and  the
  public  service  commission  shall  cooperate  with  the  department  of
  taxation and finance and assist such department of taxation and finance,
  including the provision of relevant information,  in  matters  affecting
  the administration of the taxes relating to energy businesses imposed by
  this section.