This is the finding I see missed most often, and it is missed because nothing on the bill hints at it.
In New York, utility service consumed directly in production, manufacturing or processing is exempt from sales tax under Tax Law section 1115(c)(1). The part people get wrong is scope. Since November 2000 the exemption covers the full composite rate in New York City, not just the state share. That is the whole 8.875 percent, made up of state, city and MCTD components. If you have been telling clients they can only recover the four percent, you have been understating the claim by more than half.
The exemption is not applied automatically. It requires a certificate on file, and until one is filed the utility bills the full rate and nothing on the statement indicates anything is wrong. The arithmetic is correct. The classification is correct. Only the exemption is missing, and the bill has no field for its absence.
Where this gets valuable is a site with two meters and two related entities. One meter is plant, the other is office or entrance. The plant meter often carries two or three times the consumption, and it is the one that qualifies.
Two cautions. File the certificate against the specific account number, not the street address, or you sweep the non-qualifying meter into the claim. And the recovery runs to the state tax authority, not to the utility — different forum, different clock.
In New York, utility service consumed directly in production, manufacturing or processing is exempt from sales tax under Tax Law section 1115(c)(1). The part people get wrong is scope. Since November 2000 the exemption covers the full composite rate in New York City, not just the state share. That is the whole 8.875 percent, made up of state, city and MCTD components. If you have been telling clients they can only recover the four percent, you have been understating the claim by more than half.
The exemption is not applied automatically. It requires a certificate on file, and until one is filed the utility bills the full rate and nothing on the statement indicates anything is wrong. The arithmetic is correct. The classification is correct. Only the exemption is missing, and the bill has no field for its absence.
Where this gets valuable is a site with two meters and two related entities. One meter is plant, the other is office or entrance. The plant meter often carries two or three times the consumption, and it is the one that qualifies.
Two cautions. File the certificate against the specific account number, not the street address, or you sweep the non-qualifying meter into the claim. And the recovery runs to the state tax authority, not to the utility — different forum, different clock.