The New York State Telecommunications and Utility Service Tax
In New York, there is an excise tax that applies to the provision of certain telecommunications and utility services, called the Telecommunications and Utility Services Tax Return (CT-186-E). This tax is imposed on the gross receipts derived from providing these services to customers within the state. The tax rate varies depending on the type of service provided and the location of the customer, with the highest rate in the New York Metropolitan Commuter Transportation District (MCTD) area at 3.095%. Some examples of taxable telecommunications services include telephone service, telegram service, and teletypewriter exchange service. Some examples of taxable utility services include gas, electricity, steam, water, or refrigeration.
What Is Taxable?
The telecommunications excise tax is imposed on the gross receipts derived from providing taxable services to customers within the state. Gross receipts generally include all charges, fees, and other amounts billed to customers for the taxable services, including taxes, surcharges, and other fees imposed by the service provider or by state or local governments. However, certain amounts, such as federal excise taxes, are generally excluded from the definition of gross receipts for the purpose of calculating the telecommunications excise tax.
Who Is Responsible?
It is the responsibility of the service provider and / or seller of the service to collect and remit the tax to the State. They are responsible for registering with the state, obtaining a tax permit, and filing tax returns on a regular basis. Service providers that fail to comply with the tax laws and regulations are subject to penalties and interest.
Other Taxes/Fees May Apply
In addition to the telecommunications excise tax, there may be other taxes and fees that apply to the sale of telecommunications services in New York. For example, vendors may be subject to the state and local sales tax, telecommunications utility tax, and other taxes and fees that are imposed on telecommunications services. It’s important for customers to be aware of these additional taxes and fees, as they can have a significant impact on the overall cost of the services.
Source Advisors can assist service providers and sellers in becoming compliant with their New York Telecommunications Tax filing requirements. We can assist taxpayers in determining if their services are taxable, register your business if necessary, and assist with ongoing filing needs. If you have any questions or would like to get more information, please contact Source Advisors and we can help you with your sales tax compliance obligations.