Connecticut State Department of Revenue Services

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SN 95(9)

1995 Legislative Amendments Affecting the
Utility Companies Tax

PURPOSE: This Special Notice describes the amendments made to the Connecticut utility companies tax during the 1995 session of the Connecticut General Assembly.

STATUTORY AUTHORITY: 1995 Conn. Pub. Acts 26, §§5, 6, 7 and 8; 1995 Conn. Pub. Acts 114; 1995 Conn. Pub. Acts 172, §§1 and 2; and 1995 Conn. Pub. Acts 359, §§14, 15 and 16.

EFFECTIVE DATE: 1995 Conn. Pub. Acts 26, §§5, 6, 7 and 8 are effective July 1, 1995 and are applicable to taxes due or owing on or after July 1, 1995, whether or not those taxes were due before said date. 1995 Conn. Pub. Acts 359, §§14 and 16 are effective June 7, 1995. 1995 Conn. Pub. Acts 114, §§1, 2 and 4 and 1995 Conn. Pub. Acts 172, §1 are effective for calendar quarters beginning on or after July 1, 1995. 1995 Conn. Pub. Acts 114, §3, 1995 Conn. Pub. Acts 172, §2 and 1995 Conn. Pub. Acts 359, §15 are effective for calendar quarters beginning on or after July 1, 1996.

DEFINITIONS:

MARKETER OF NATURAL GAS means any corporation, company, association, joint stock association, partnership or person, or lessee thereof, which sells natural gas and is not (1) a gas company as defined in Conn. Gen. Stat. §16-1, (2) a municipal gas utility established under chapter 101 of the Connecticut General Statutes or any other gas utility owned, leased, maintained, operated, managed, or controlled by any unit of local government under any Connecticut General Statute or any public or special act, or (3) a gas pipeline or gas transmission company subject to the provisions of chapter 208 of the Connecticut General Statutes. 1995 Conn. Pub. Acts 114, §1.

MUNICIPAL UTILITY means any Connecticut municipality or department or agency thereof, or Connecticut district, manufacturing, selling or distributing gas or electricity to be used for light, heat or power, including each foreign municipal electric utility as defined in Conn. Gen. Stat. §12-59 and given authority to engage in business in this state pursuant to the provisions of Conn. Gen. Stat. §16-246c. Conn. Gen. Stat. §12-264(a).

PUBLIC UTILITY COMPANY means any company the principal business of which is manufacturing, selling or distributing gas, electricity or steam to be used for light, heat or power, but does not include a municipal utility. Conn. Gen. Stat. §12-264(a).

PUBLIC SERVICE COMPANY means a public service company, as defined in Conn. Gen. Stat. §16-1(a)(4).

WATER COMPANY means any company operating a system of water works for selling and distributing water for domestic or power purposes, provided such company is a water company as that term is defined in Conn. Gen. Stat. §16-1. Conn. Gen. Stat. §12-264(a).

MARKETERS BECOME SUBJECT TO THE UTILITY COMPANIES TAX: Effective July 1, 1995, any marketer of natural gas selling natural gas in Connecticut to an end user on or after July 1, 1995 becomes subject to the utility companies tax and is required to register with the Connecticut Department of Public Utility Control (DPUC) prior to making any sale of natural gas in Connecticut. In order to register with the DPUC, marketers of natural gas must complete and file with the DPUC the Natural Gas Seller Registration Form that is prescribed by the DPUC. (For more information on registering with the DPUC, contact the Consumer Services Division of the DPUC at 1-800-382-4586 (in-state) or 203-827-2622). Marketers of natural gas, if not previously assigned a Connecticut Tax Registration Number by the Department of Revenue Services, must complete and file with the Department of Revenue Services a Form REG-1, Application for Tax Registration Number.

MEASURE OF THE UTILITY COMPANIES TAX ON MARKETERS: 1995 Conn. Pub. Acts 359, §15 provides that a marketer of natural gas, as defined in 1995 Conn. Pub. Acts 114, §1, is subject to the utility companies tax on its gross earnings from sales of natural gas.

SALES OF PROPANE EXCLUDED FROM GROSS EARNINGS: 1995 Conn. Pub. Acts 172 allows gas companies, as defined in Conn. Gen. Stat. §16-1, to exclude sales of propane as a motor fuel from their gross earnings subject to the utility companies tax. Specifically, the act amends the definition of "gross earnings" in Conn. Gen. Stat. §12-264(a) so that "gross earnings" of a gas company do not include "income earned in a taxable year commencing prior to January 1, 2000, from the sale of propane as a fuel for a motor vehicle."

Section 1 of 1994 Conn. Pub. Acts 101 had amended gross earnings of a gas company, as defined in Conn. Gen. Stat. §16-1, to exclude income earned in a taxable year commencing prior to January 1, 2000, from the sale of natural gas as a fuel for a motor vehicle. See SN 94(11).

DEDUCTIONS FOR SALES FOR RESALE: Effective June 7, 1995, for calendar quarters beginning on or after July 1, 1995, section 15 of 1995 Conn. Pub. Acts 359 provides that any company subject to the utility companies tax can deduct from gross earnings all sales for resale of gas to marketers of natural gas that are registered with the DPUC under 1995 Conn. Pub. Acts 114, §1. In addition, a deduction from gross earnings is allowed for sales for resale of water, steam, gas and electricity to:

  • public service corporations, whether or not they are Connecticut public service companies and whether or not they are subject to the utility companies tax, and
  • municipal utilities, whether or not they are Connecticut municipal utilities and whether or not they are subject to the utility companies tax.

APPORTIONMENT OF GROSS EARNINGS OF MARKETERS: 1995 Conn. Pub. Acts 359, §16, provides that, in the case of a marketer of natural gas registered with the DPUC, gross earnings, as determined under Conn. Gen. Stat. §12-264(a), are to be apportioned based on the ratio of sales in Connecticut to end users during the taxable quarter to total sales everywhere to end users during such quarter.

CHANGES TO INTEREST RATES: 1995 Conn. Pub. Acts 26 reduces the rate of interest payable on late payments and audit assessments from 1 2/3% to 1% per month or fraction thereof. The act also reduces the interest payable on refunds from 9% per year to 2/3% per month or fraction thereof.

FORM UCT 212: Form UCT 212, Water, Gas, Electric & Steam Companies Gross Earnings Tax Return, will be modified to reflect the 1995 legislative amendments. The Department will issue an Announcement when Form UCT 212, as modified, is available.

EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in state or federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners.

SN 95(9)
Utility companies tax
Issued: 7/20/95