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 45.6 - Installment and conditional sales

(a) Utilities frequently sell or lease merchandise on installment, conditional sale and rental contracts which contain a variety of different provisions. Some provide that when a certain number of payments have been made, the article sold or leased becomes the property of the purchaser or lessee and others provide that at any time during the life of the contract the lessee has the option to purchase. Some rental contracts stipulate that when the option is exercised, all rental payments shall be applied to the purchase price, and others condition that some percentage of the rental paid shall be so applied. It is understood that the utility on the accrual basis accrues and includes in gross income the total consideration of a pure installment sale and that practices differ with regard to the accounting treatment given to the various forms of the conditional sale and rental contracts. For purposes of accounting and reporting under this law, it is immaterial whether the contract be a pure installment sale, some form of conditional sale, or rental contract.

(b) A utility reporting on the accrual basis shall include in gross income the amounts accrued and included in gross income, according to the system of accounting employed. Where such practice is followed a utility will be permitted to deduct sums not actually received on contracts which are cancelled where the merchandise is repossessed but not to exceed the remainder of the accrual. Such deductions will be permitted regardless of when the contract was made. A utility reporting on the cash basis shall include in gross income all receipts from installment, conditional sales and rental contracts regardless of when the contract was made.