§ 12-264 — Tax on gross earnings. Registration of gas sellers. Return.

Connecticut § 12-264

• Jurisdiction: Connecticut
• Title 12: Taxation
• Ch. 212: Utility Companies Tax

Text

(a)(1) Prior to July 1, 2022, each (A) municipality, or department or agency thereof, or district manufacturing, selling or distributing gas to be used for light, heat or power, (B) company the principal business of which is manufacturing, selling or distributing gas or steam to be used for light, heat or power, including each foreign electric company, as defined in section 16-246f, that holds property in this state, and (C) company required to register pursuant to section 16-258a, shall pay a quarterly tax upon gross earnings from such operations in this state. (2) On and after July 1, 2022, each company described under subparagraphs (B) and (C) of subdivision (1) of this subsection shall pay a quarterly tax upon gross earnings from such operations in this state. (3) Gross earnings, prior to July 1, 2022, from such operations under subparagraphs (A) and (B) of subdivision (1) of this subsection, and on and after July 1, 2022, from such operations under subparagraph (B) of said subdivision, shall include, as determined by the Commissioner of Revenue Services, (A) all income included in operating revenue accounts in the uniform systems of accounts prescribed by the Public Utilities Regulatory Authority for operations within the taxable quarter and, with respect to each such company, (B) all income identified in such uniform systems of accounts as income from merchandising, jobbing and contract work, (C) all revenues identified in such uniform systems of accounts as income from nonutility operations, (D) all revenues identified in such uniform systems of accounts as nonoperating retail income, and (E) receipts from the sale of residuals and other by-products obtained in connection with the production of gas, electricity or steam. (4) Gross earnings from such operations under subparagraph (C) of subdivision (1) of this subsection shall be gross income from the sales of natural gas, provided gross income shall not include income from the sale of natural gas to an existing combined cycle facility comprised of three gas turbines providing electric generation services, as defined in section 16-1 , with a total capacity of seven hundred seventy-five megawatts, for use in the production of electricity. (5) Gross earnings of a gas company, as defined in section 16-1 , shall not include income earned in a taxable quarter commencing prior to June 30, 2008, from the sale of natural gas or propane as a fuel for a motor vehicle. No deductions shall be allowed from such gross earnings for any commission, rebate or other payment, except a refund resulting from an error or overcharge and those specifically mentioned in section 12-265 . Gross earnings of a company, as described in subparagraph (B) of subdivision (1) of this subsection, shall not include income earned in any taxable quarter commencing on or after July 1, 2000, from the sale of steam. (b) (1) (A) Each company described under subparagraphs (B) and (C) of subdivision (1) of subsection (a) of this section shall, on or before the last day of January, April, July and October of each year, render to the Commissioner of Revenue Services a return on forms prescribed or furnished by the commissioner and signed by its treasurer or the person performing the duties of treasurer, or by an authorized agent or officer, specifying (i) the name and location of such company or municipal utility, (ii) the amount of gross earnings from operations for the quarter ending with the last day of the preceding month, (iii) the gross earnings from the sale or rental of appliances using water, steam, gas or electricity and the cost of such appliances sold, cost to be interpreted as net invoice price plus transportation costs of such appliances, (iv) the gross earnings from all sales for resale of water, steam, gas and electricity, whether or not the purchasers are public service corporations, municipal utilities, located in the state or subject to the tax imposed under this chapter, (v) the number of miles of water or steam pipes, gas mains or electric wires operated by such company or municipal utility within this state on the first day and on the last day of the calendar year immediately preceding, and (vi) the number of miles of water or steam pipes, gas mains or electric wires wherever operated by such company or municipal utility on said dates. Gas pipeline and gas transmission companies that do not manufacture or buy gas in this state for resale in this state shall be subject to the provisions of chapter 208 and shall not be subject to the provisions of this chapter and chapter 212a. (B) Each municipality, or department or agency thereof, or district manufacturing, selling or distributing gas to be used for light, heat or power shall, on or before the last day of January, April, July and October of each year until and including July 31, 2022, render to the Commissioner of Revenue Services a return on forms prescribed or furnished by the commissioner and signed by its treasurer or the person performing the duties of treasurer, or by an authorized agent or officer, specifying the information set forth in subparagraphs (A)(i) to (A)(vi), inclusive, of this subdivision. (2) No person, firm, corporation or municipality that is chartered or authorized by this state to transmit or sell gas within a franchise area shall transmit gas for any person that sells gas to be used for light, heat or power to an end user or users located in this state, unless such seller has registered with the Department of Revenue Services for purposes of the tax imposed under this chapter. The provisions of this subdivision shall not apply to the transmission of gas for any seller that is a gas company, as defined in section 16-1 , municipal gas utility established under chapter 101 or any other gas utility owned, leased, maintained, operated, managed or controlled by any unit of local government under any general statute or any public or special act, or a gas pipeline or gas transmission company subject to the provisions of chapter 208. (3) The Commissioner of Revenue Services may make public the names and addresses of each person that sells gas to be used for light, heat or power to an end user or users located in this state and has registered with the Department of Revenue Services for purposes of the tax imposed under this chapter, and that is not a gas company, as defined in section 16-1 , a municipal gas utility established under chapter 101 or any other gas utility owned, leased, maintained, operated, managed or controlled by any unit of local government under any general statute or any public or special act, or a gas pipeline or gas transmission company subject to the provisions of chapter 208. (c) (1) Each electric distribution company, as defined in section 16-1 , or municipality, or department or agency thereof, or district manufacturing, selling or distributing electricity to be used for light, heat or power, providing electric transmission services, as defined in section 16-1 , or electric distribution services, as defined in section 16-1 , shall pay a quarterly tax upon its gross earnings in each calendar quarter at the rate of (A) eight and one-half per cent of its gross earnings from providing electric transmission services or electric distribution services allocable to other than residential service, and (B) six and eight-tenths per cent of such gross earnings from providing electric transmission services or electric distribution services allocable to residential service. (2) For purposes of this subsection, gross earnings from providing electric transmission services or electric distribution services shall include (A) all income classified as income from providing electric transmission services or electric distribution services, as determined by the Commissioner of Revenue Services in consultation with the Public Utilities Regulatory Authority, and (B) the competitive transition assessment collected pursuant to section 16-245g , other than any component of such assessment that constitutes transition property as to which an electric distribution company has no right, title or interest pursuant to subsection (a) of section 16-245h , the systems benefits charge collected pursuant to section 16-245 l , the conservation adjustment mechanisms charged under section 16-245m , and the assessments charged under section 16-245n . Such gross earnings shall not include income from providing electric transmission services or electric distribution services to a company described in subsection (c) of section 12-265 . (3) Each electric distribution company and municipality, or department or agency thereof, or district manufacturing, selling or distributing electricity to be used for light, heat or power shall, on or before the last day of January, April, July and October of each year, render to the Commissioner of Revenue Services a return on forms prescribed or furnished by the commissioner and signed by its treasurer, or the person performing the duties of treasurer, or of an authorized agent or officer, with such other information as the Commissioner of Revenue Services deems necessary. (d) The tax imposed by this chapter is due and payable to the Commissioner of Revenue Services quarterly on or before the last day of the month next succeeding each calendar quarter. See chapter 138c re tax credits for donations to Rental Housing Assistance Trust Fund. See Secs. 12-268d and 12-268e re failure to pay tax when due, re fraudulent returns and re penalties.

Legislative History

(1949 Rev., S. 1950; 1951, S. 1112d; 1961, P.A. 604, S. 14; 1963, P.A. 2, S. 1; P.A. 73-442, S. 7; P.A. 74-329; P.A. 75-486, S. 29, 69; P.A. 76-114, S. 11, 21; P.A. 77-614, S. 139, 162, 610; P.A. 80-482, S. 20, 348; P.A. 84-458, S. 1, 2; P.A. 94-101, S. 1, 3; May Sp. Sess. P.A. 94-4, S. 12, 85; P.A. 95-114, S. 2, 3, 5; 95-160, S. 64, 69; 95-172, S. 1, 2, 4; 95-359, S. 14, 15, 19; P.A. 96-205, S. 1, 3; P.A. 98-28, S. 54, 117; 98-244, S. 13, 35; P.A. 99-173, S. 43, 44, 65; P.A. 00-174, S. 27, 56, 83; June Sp. Sess. P.A. 01-6, S. 21, 85; May 9 Sp. Sess. P.A. 02-4, S. 9; P.A. 04-180, S. 5, 6; 04-231, S. 4; P.A. 05-288, S. 214; P.A. 06-186, S. 68; P.A. 11-80, S. 1; P.A. 17-147, S. 27; P.A. 18-50, S. 11; P.A. 22-118, S. 433.) History: 1961 act included municipal utilities and steam companies, and changed dates for annual return and for computing mileage of pipes, mains and wires; 1963 act specified gross earnings provision applied to all sales for resale to any public service corporation or municipal utility; P.A. 73-422 included foreign municipal electric utilities and specified “Connecticut” municipalities and districts; P.A. 74-329 made technical changes; P.A. 75-486 substituted public utilities control authority for public utilities commission; P.A. 76-114 revised section so that tax charged on quarterly rather than annual basis, effective July 1, 1976, and applicable to gross earnings in calendar quarter commencing January 1, 1977, and each calendar quarter thereafter; P.A. 77-614 substituted commissioner of revenue services for tax commissioner and division of public utility control within the department of business regulation for public utilities control authority, effective January 1, 1979; P.A. 80-482 made division of public utility control a separate department and deleted reference to abolished department of business regulation; P.A. 84-458 added exemption for systems of water works which do not fall within the definition of water company in section 16-1, effective June 11, 1984, and applicable with respect to calendar quarters commencing July 1, 1984, and thereafter; P.A. 94-101 divided section into Subsecs. (a) and (b) and further divided Subsec. (a) into Subdivs. and added provision re sale of natural gas as a fuel for a motor vehicle, effective July 1, 1994, and applicable to calendar quarters commencing on or after that date; May Sp. Sess. P.A. 94-4 deleted provision which had exempted certain companies operating water works but which are not water companies as defined in Sec. 16-1 from provisions of this chapter and chapter 212a, effective July 1, 1996, and applicable to calendar quarters commencing on or after said date; P.A. 95-114 divided Subsecs. (a) and (b) into Subdivs., changing former Subdivs. of Subsec. (a) to Subparas., and adding Subdiv. (3) re companies required to register pursuant to Sec. 16-258a and amended Subsec. (b)(4), expanding sales for resale to all purchasers, effective July 1, 1995; P.A. 95-160 changed effective date of May Sp. Sess. P.A. 94-4, S. 12 to July 1, 1997, and applicable to calendar quarters commencing on or after that date; P.A. 95-172 excluded income earned from the sale of propane as a fuel for motor vehicles from gross earnings of a gas company prior to January 1, 2000, effective July 1, 1995, and applicable to calendar quarters on or after that date; P.A. 95-359 amended Subsec. (a) to provide that gross earnings from operations under Subdiv. (3) shall be gross income from sales of natural gas and made technical changes, effective July 13, 1995; P.A. 96-205 amended Subsec. (a) to exempt sales of steam on or after July 1, 2000, effective July 1, 1996; P.A. 98-28 amended Subsec. (a)(2) by deleting reference to companies manufacturing, selling or distributing electricity, added new Subsec. (c) requiring electric distribution companies to pay gross earnings tax and added new Subsec. (d) concerning when tax is due and payable, effective January 1, 2000, and applicable to calendar quarters commencing on or after January 1, 2000; P.A. 98-244 amended Subsec. (b) to eliminate notarization requirement, effective June 8, 1998, and applicable to calendar quarters commencing on or after October 1, 1998; P.A. 99-173 amended Subsec. (a) to extend sunset from January 1, 2000, to January 1, 2002, effective June 23, 1999; P.A. 00-174 amended Subsec. (b) to designate existing provisions as Subdiv. (1), to add Subdiv. (2) re registration of sellers of gas and to add Subdiv. (3) re publishing of information re sellers of gas, effective July 1, 2000, and applicable to calendar quarters commencing on or after that date, and amended Subsec. (c)(3) to delete requirement that return be under oath and add requirement that return be signed, effective July 1, 2000; June Sp. Sess. P.A. 01-6 amended Subsec. (a) to exclude from gross earnings under section earnings of a gas company from sales of propane or natural gas for use in motor vehicles for taxable quarters commencing prior to June 30, 2002, effective July 1, 2001; May 9 Sp. Sess. P.A. 02-4 amended Subsec. (a) to extend the sunset for the deduction for sales of natural gas or propane as motor vehicle fuel to June 30, 2004, and to make a technical change, effective July 1, 2002; P.A. 04-180 amended Subsec. (a) to add proviso re the exclusion of income from the sale of natural gas to certain combined cycle facilities, effective May 1, 2003, and amended Subsec. (c)(2) to add “other than any component of such assessment that constitutes transition property as to which an electric distribution company has no right, title or interest pursuant to subsection (a) of section 16-245h”, effective June 1, 2004; P.A. 04-231 amended Subsec. (a) to extend the sunset date for exemption re sale of natural gas or propane as motor vehicle fuel from June 30, 2004, to June 30, 2008, effective July 1, 2004; P.A. 05-288 made a technical change in Subsec. (a), effective July 13, 2005; P.A. 06-186 amended Subsec. (c)(1) and (3) by making municipalities or districts manufacturing, selling or distributing electricity responsible for payment of tax and filing of return, and amended Subsecs. (a)(1) and (b)(1) by making technical changes, effective July 1, 2006; pursuant to P.A. 11-80, “Department of Public Utility Control” was changed editorially by the Revisors to “Public Utilities Regulatory Authority” in Subsecs. (a) and (c), effective July 1, 2011; P.A. 17-147 substantially amended Subsec. (a) including by replacing provision re foreign municipal electric utility with provision re foreign electric company in Subdiv. (2), adding “as determined by the Commissioner of Revenue Services”, replacing reference to income classified as operating revenues with reference to income included in operating revenue accounts in Subpara. (A), replacing “classified” with “identified” in Subpara. (B), adding “all revenues identified in said uniform systems of accounts as” in Subpara. (C), and replacing “revenues from lease of physical property not devoted to utility operation” with “all revenues identified in said uniform systems of accounts as nonoperating retail income” in Subpara. (D), amended Subsec. (c) by replacing provision re income classified by Public Utilities Regulatory Authority with provision re income as determined by Commissioner of Revenue Services in consultation with Public Utilities Regulatory Authority in Subdiv. (2)(A), and made technical changes; P.A. 18-50 amended Subsec. (c)(2)(B) by adding “the conservation adjustment mechanisms charged under section 16-245m,” and replacing “sections 16-245m and” with “section”, effective January 1, 2020; P.A. 22-118 substantially revised Subsecs. (a) and (b)(1) re applicability of tax, effective July 1, 2022. Effect of words “the principal business of which is”. 90 C. 452. “Gross earnings” under former statute. Id; 131 C. 1. Corporation operating a system of dams and gates for conservation of water for benefit of lower riparian stockholders, but not owning the water, is not taxable under section. 92 C. 38. Cited. 106 C. 580; 134 C. 299. History of statute discussed. 150 C. 578. Where plaintiff received 75 per cent of its gross earnings from furnishing steam for heat, this was its principal business and it was subject to the tax imposed by section rather than to the corporate business tax on net income imposed by Sec. 12-214. 151 C. 688. Where public utility water company which also sold produce and nursery stock claimed expenses of its orchard and nursery operations should be deducted from its gross earnings by virtue of a system of accounts prescribed by the public utilities commission, held that statute may not be modified by a regulation of the commission and the company was not entitled to such deduction. 152 C. 674, 675. Amendments to uniform system of accounts after 1945 have no effect on tax base stated in statute; “gross earnings from operations” are all items contemplated by sections 600 through 615 of 1941 uniform system of accounts prescribed for electrical utilities and other receipts which fall under any of listed categories. 161 C. 145. Since “transmission receipts” are not classified as “operating revenues” in the uniform system of accounts, or in any other accounts enumerated in section, they are not taxable under chapter. 169 C. 58. Cited. 202 C. 583. A combination of various factors, not conclusive individually, determine the “principal” business of a company. 26 CS 277.