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 taximposed 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 thatintent, 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.