N.Y. Comp. Codes R. & Regs. tit. 20 § 529.10

Current through Register Vol. 46, No. 45, November 2, 2024

Section 529.10 - Rural electric cooperatives

Tax Law, § 1116(a)(8); Rural Electric Cooperative Law, § 66

(a)General.

(1) Cooperative and foreign corporations doing business in this State pursuant to the Rural Electric Cooperative Law (hereinafter referred to as rural electric cooperatives) are exempt from the sales and use taxes imposed by sections 1105, 1109 and 1110 of the Tax Law and imposed pursuant to the authority of article 29 of the Tax Law on the purchase or use of tangible personal property, services, food and drink, hotel occupancy or admissions and dues. Such corporations will be required to collect sales and use tax upon making sales of tangible personal property and services, as provided in subdivision (e) of this section. Such corporations shall be subject with respect to their purchases and uses to the municipal assistance sales and compensating use taxes imposed by sections 1107 and 1108 of the Tax Law.

(2) In order to establish its exempt status, it is necessary for a rural electric cooperative to file an application form as set forth in subdivision (b) of this section and prove that it meets the statutory requirements.

(3) Rural electric cooperatives qualifying for exemption will be issued an exempt organization certificate as set forth in subdivision (b) of this section.

(b)Application for exempt status.

(1) A rural electric cooperative, in order to establish its status as an organization exempt from the sales and use tax, must submit to the Taxpayer Assistance Bureau, W.A. Harriman Campus, Albany, NY 12227, for review, a completed application for an exempt organization certificate.

(2) In addition to the application, the rural electric cooperative must also submit the following documents which will be retained as part of the request for the exemption.

(i) A copy of the articles of incorporation, with any amendments thereto, and filing receipt(s) from an appropriate governmental entity.

(ii) A copy of the bylaws or other similar code of regulations, with a copy of any amendments.

(iii) A statement of activities. This statement must fully describe the services provided to members and others and include the location of plants and systems, with a description of the equipment maintained there.

(iv) A statement of receipts and expenditures for the most recent fiscal year of operation, or for the period for which the corporation was in existence, if less than a year. This statement should clearly reflect the nature and amount of receipts and the purpose and amount of expenditures.

(v) A statement of assets and liabilities as of the end of the most recent fiscal year of operation, or as of the date of the filing of an application, if the organization was in existence for less than a year.

(3) In addition to the information specifically called for by this section, the Department of Taxation and Finance may require any additional information deemed necessary for a proper determination of whether the corporation is exempt under section 1116 (a)(8) of the Tax Law and may prescribe the form in which the proof of exemption is to be furnished.

(4) The application, of which all supporting documents are a part, must contain or be verified by a written declaration that it is understood that any willfully false representation may be subject to the criminal penalties prescribed by section 1817 of the Tax Law and the Penal Law.

(5) Upon the approval of the application by the Taxpayer Assistance Bureau, the bureau will issue to the applicant a numbered exempt organization certificate.

Cross-reference:

For applicable general regulations, including denials, see subdivision (j) of section 529.1 of this Part.

(c)Amendments and revocation.

(1) The exempt organization certificate must be returned to the Sales Tax Exempt Organization Section, Taxpayer Assistance Bureau, W.A. Harriman Campus, Albany, NY 12227, if the rural electric cooperative changes its purposes, activities or organizational structure. A reappraisal of the corporation's exempt status will be made provided it submits a copy of the applicable amended organizing document or statement of activities.

(2) A rural electric cooperative which changes its structural form (e.g., a corporation consolidates with another corporation) must submit a request and supporting documents for an exempt organization certificate in order to establish the new entity's status for sales tax exemption.

(3) An exempt organization certificate may be revoked for any reason constituting misuse of the exemption granted, or if it is discovered that the corporation's application contained misleading or deceptive information, or if the corporation has changed its purposes, activities or organizational structure without notifying the bureau as provided by this subdivision. Where the Department of Taxation and Finance determines it to be appropriate, for example, in the case of fraud, international misuse and other similar misuses, such revocation may be effective retroactivley to the date of such misuse or deception.

Cross-reference:

For misuse and revocation, see subdivision (j) of section 529.1 of this Part.

(d)Sales to rural electric cooperatives.

(1) Any sale or amusement charge to or any use or occupancy by a rural electric cooperative to which an exempt organization certificate has been issued is exempt from sales and use taxes except for sales and use taxes imposed pursuant to sections 1107 and 1108 of the Tax Law.

(2) In order to exercise its right to exemption, the rural electric cooperative must be the direct purchaser, occupant or patron of record. It must also be the direct payer of record and must furnish its vendors with a properly completed exempt organization certification. Direct purchaser, occupant or patron as used in this paragraph includes any agent or employee authorized by the rural electric cooperative to act on its behalf in making such purchases, provided the corporation and its agent or employee are both identified on any bill or invoice. A rural electric cooperative is the direct payer of record where direct payment is made by the corporation or from its funds directly to the vendor.

(3) An exempt organization certification is deemed to be properly completed when it contains the:

(i) name and address of the vendor;

(ii) name and address of the exempt rural electric cooperative;

(iii) number assigned to the exempt organization certificate;

(iv) signature of a responsible officer of the exempt rural electric cooperative; and

(v) date the certification was executed.

(4) Sales to any member, officer or employee of an exempt rural electric cooperative are subject to the sales and use tax when the sales are for the personal use of the purchaser rather than the corporation.

Cross-reference:

Sales by contractors, see sections 528.16, 528.17 and Part 541 of this Title.

(e)Sales by exempt rural electric cooperatives.

(1) Sales of tangible personal property and services by exempt rural electric cooperatives are subject to sales and use tax, except where the purchaser is a person or organization exempt from tax as described in this Part.

(2) An exempt rural electric cooperative making taxable sales is required to register as a vendor, collect the appropriate tax, and file timely sales tax returns.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 529.10