New York – Taxability of Residential Energy Sources and Services

SALT Report 1723 – The New York Department of Taxation issued a tax bulletin regarding the exemption for residential energy sources and services. According to the bulletin, the following energy sources and services, when used for residential purposes, are exempt from the 4% state sales and use tax as well as certain local taxes:

  • Natural gas,
  • Propane sold in containers of 100 pounds or more,
  • Electricity,
  • Steam,
  • Fuel oil,
  • Non-highway diesel motor fuel,
  • Coal,
  • Wood, including wood pellets and other compressed wood products, used for heating purposes only, and
  • Gas, electric, or steam services

Please note that local tax rates may apply to the items listed above.  Publication 718-R, Local Sales and Use Tax Rates on Residential Energy Sources and Services, provides a list of the localities and school districts that impose tax on residential energy sales.

The bulletin also discusses how the sales and use tax exemption applies to products and services when they are used for both residential and nonresidential purposes, such as mixed-used properties.  Generally, when a qualified energy source or service is used on a mixed-use property that has a single meter or a single storage tank, you must determine the percentage of the property that is used for residential purposes.  Form TP-385, Certification of Residential Use of Energy Purchases provides the formula along with other guidelines that should be used when claiming an exemption for mixed-use properties.

For Further Information:

New York Department of Taxation and Finance – TB-ST-775