What is the New York City Utility Excise Tax?
In New York City, the Utility Excise Tax (UXS) is a tax imposed on utility service providers that operate within the city. These providers include electricity, gas, steam, and telecommunications companies. Telecommunications services are defined as the transmission of voice, image, data, information, and paging using wire, cable, fiber optic, laser, microwave, radio wave, satellite, or similar media. This tax is in addition to any federal and state taxes that are imposed on utility service providers.
What Is Taxed?
The tax is calculated as a percentage of the utility service provider’s gross operating income from providing these services to customers within the city. The current tax rate for electric, gas, steam, water, refrigeration, and telecommunications services is 2.35%, and the tax rate for an omnibus operation is 1.17%. The revenue generated from this tax goes into the city’s general fund and is used to support a variety of public services and programs. Returns are only required semiannually for taxpayers whose utility tax liability is less than $100,000 for the preceding calendar year. When taxpayers first become subject to UXS, they must file monthly returns for every month of the calendar year in which they first become subject to the utility tax. Service providers that do not comply with tax laws and regulations are subject to penalties and interest.
Some tax exemptions exist, for example, for certain residential customers, government entities, and nonprofit organizations. Additionally, the tax may be subject to various deductions and credits, depending on the specific circumstances of the utility provider and customer. Lastly, certain types of income may be excluded from gross operating income, such as income from non-utility sources or income from certain types of customers (i.e. residential customers). The specific rules for calculating gross operating income can be complex and may be subject to interpretation by the relevant government agency. If you have questions about what is taxable under the New York City Utility Excise Tax, it would be valuable to consult with a tax professional such as PMBA.
PMBA can guide you through the New York City Utility Excise Tax calculation and return filing process. PMBA has assisted clients in calculating and filing these returns. If you have any questions or would like to get more information, please contact a PMBA professional to help assist you in getting started with your utility excise tax filings.