New York Codes, Rules and Regulations
Title 20 - DEPARTMENT OF TAXATION AND FINANCE
Chapter I - Franchise and Certain Business Taxes
Subchapter F - Tax On The Furnishing Of Utility Services
Part 45 - Gross Income
Section 45.5 - Deductions for costs

Universal Citation: 20 NY Comp Codes Rules and Regs ยง 45.5
Current through Register Vol. 46, No. 12, March 20, 2024

The law provides that receipts from sales or services shall include "cash, credits and property of any kind or nature * * * without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or services or other costs, interest or discount paid, or any other expense whatsoever".

Question 24:

An omnibus corporation expends $10,000 per month for motor fuel. May it deduct this amount from its gross receipts from transportation? Answer: No.

Question 25:

A gas company purchases one million cubic feet of gas at a cost of $600 and sells it to consumers for $1,100. In determining gross income, may any deduction be taken on account of the cost of the gas? Answer: No.

Question 26:

A utility sells an appliance which cost it $25, for $42.50. In determining gross income, may any deduction be taken on account of the cost of appliance? Answer: No.

Question 27:

An electric company carries motors as part of its stock in trade. It sells and installs a motor. May any deduction be taken on account of the cost of the motor or the expense of installation? Answer: No.

Question 28:

An electric company renders a bill of two dollars for electricity furnished a domestic consumer. May the company deduct the Federal tax imposed by section 3411(a) of the Internal Revenue Code? Answer: No. The Federal tax is imposed on the vendor and is a business expense, for which no deduction is allowable.

Question 29:

May a utility, which is subject to tax on its gross income under a local law of the city of Buffalo, deduct the amount of tax payable to said city in arriving at its gross income for the purpose of the State tax on utilities? Answer: No.

Question 30:

A telephone company receives $1.25 for a toll message, which includes 25 cents to cover the Federal tax imposed by section 3465(a) of the Internal Revenue Code. How much is required to be included in gross income? Answer: $1.00. The Federal tax is not part of the receipts of the company, which is merely a collecting agency of the United States.

Question 31:

May a utility deduct from its gross income the retail sales tax imposed by New York City? Answer: Yes. The New York City sales tax is imposed upon the purchaser, and the utility merely acts as a collecting agency of the city.

Question 32:

A telephone company installs pay stations in various premises, paying a commission on gross receipts for the privilege. May this commission be deducted in determining gross income? Answer: No.

Question 33:

May a telephone company deduct the cost of publishing its directory in determining gross income? Answer: No.

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