When a condo association sub-meters electricity to bill unit owners for their actual usage, does it have to collect sales tax on those charges, and at what rate?

Plain-English summary

A Brooklyn condominium association ("Condo") with 42 residential units and 2 commercial units buys electricity from Con Edison through a single master meter that covers the residential units and all shared common areas (elevators, hallway lighting, and the like); the commercial units have their own separate meters and are billed directly by Con Ed. Condo had sub-meters installed to track each residential unit's actual usage, then bills each owner for their metered electricity, plus a 7.5% administrative fee and a flat $4 sub-meter fee, while paying for common-area electricity out of everyone's regular monthly common charges.

New York taxes utility services as a distinct commodity, but only when a utility charge is a genuine, separately identifiable sale based on actual usage — not when it's just baked into an undifferentiated flat charge. Because Condo's sub-meters accurately track each residential unit's real consumption and bill accordingly, the Department found Condo is truly reselling electricity to those unit owners, which makes Condo a "vendor" required to register and collect sales tax — but at the reduced (currently zero-percent state) residential energy rate, leaving only the New York City local rate to collect. By contrast, the electricity Condo buys and uses in the shared common areas isn't separately metered or billed to anyone by usage, so it's not a sale at all — it's an expense embedded in flat common charges, and Condo (not the unit owners) owes tax on that portion when it buys it from Con Ed, allocated between the residential-use share (reduced/exempt rate) and the commercial-use share (full rate) using any reasonable measurement method, like relative square footage or lighting fixtures.

What this means for you

Condominium and co-op associations that sub-meter utilities

If you install sub-meters and bill owners based on their actual measured usage, that's a real utility resale — you must register as a sales tax vendor and collect tax, but you get to charge the lower residential rate (which nets out the state portion in most areas), not the commercial rate. You can also credit the sales tax you already paid Con Ed on the resold portion against what you collect from residents, so you're not double-taxed on the same electricity.

Associations billing common-area electricity through flat common charges

If you're not separately metering or billing owners by actual common-area usage — just splitting the cost through the regular monthly charge — that's not a taxable resale to the unit owners at all; it's simply part of your operating costs (like additional rent). You, the association, owe the sales tax on that electricity purchase directly, and need a reasonable allocation method to split residential (lower rate) from commercial (full rate) common-area usage if your building has mixed-use tenants.

Mixed residential/commercial buildings more broadly

The residential-vs-commercial split matters for rate purposes even within "common areas" shared by both types of units — you can't treat a mixed-use common area as automatically residential just because most units are residential; a documented, reasonable allocation (square footage, fixture count, etc.) is expected.

Common questions

Q: Do we need to register as a sales tax vendor just because we sub-meter electricity to residents?
A: Yes — once you bill based on actual measured usage, that's a genuine resale of a taxable utility service, and you must register, collect, and remit sales tax on those charges (at the reduced residential rate).

Q: What rate applies to sub-metered residential electricity?
A: The reduced "residential purposes" rate under Tax Law § 1105-A, which zeroes out the statewide portion; in New York City you'd still owe the local NYC rate on those charges.

Q: Is common-area electricity paid through flat monthly charges taxable to unit owners?
A: No — if it's not separately metered or billed by actual usage, it's not a distinct sale to the owners at all; the association itself pays tax on that purchase, allocated between residential- and commercial-use portions.

Q: Can the association get credit for sales tax it already paid to the utility on electricity it resells?
A: Yes — the association can credit the tax it paid the utility on the resold portion against what it collects from residents on its own return, remitting only the net difference.

Citations and references

Statutes and rules:

• Tax Law § 1101(b)(3), (8) (receipt, vendor definitions)
• Tax Law § 1105(b) (utility service sales tax)
• Tax Law § 1105-A (residential energy rate reduction)
• Tax Law § 1107, § 1109 (NYC local tax; MCTD tax)
• Tax Law § 1132(c) (presumption of taxability)
• 20 NYCRR 526.5(e); 527.2(a); 527.13 (utility tax imposition, allocation, and collection rules)

Case law and prior advisory opinions relied on:

• Matter of Mutual Redevelopment Houses, Inc. v Roth, 307 AD2d 422 (3d Dept 2003) (presumption of taxability for sub-metered utility resales)
• Debevoise & Plimpton v New York State Dept. of Taxation & Fin., 80 NY2d 657; Empire State Bldg. Co. v New York State Dept. of Taxation & Fin., 81 NY2d 1002 (non-separately-billed utility charges as rent, not resale)
• Cynthia Havey, TSB-A-00(31)S (common areas closed to the public treated as residential)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2005.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a05_8s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-05(8)S
Sales Tax
March 18, 2005

Office of Tax Policy Analysis
Technical Services Division
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S030827A

On August 27, 2003, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Bruce A. Mekul, CPA, c/o Firooznia & Mekul, 111 Brook Street,
Scarsdale, New York, 10583-5151.
The issue raised by Petitioner, Bruce A. Mekul, CPA, is whether Petitioner’s client, an
unincorporated condominium management association (hereinafter Condo) is required to collect
sales tax on the sub-metered electric charges to the unit owners, and, if so, what is the correct
rate of sales tax to be charged.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Condo is an unincorporated condominium management association that was organized
under Article 9-B of the New York State Real Property Law. The condominium is located in
Brooklyn, New York, and consists of 42 residential apartment condominium units and 2
commercial condominium units. Each owner of a unit is a member of Condo.
The commercial units are separately metered and billed directly by Consolidated Edison
Company of New York, Inc. (hereinafter ConEd) for their electric usage. ConEd sends Condo a
single bill for purchases of electricity which are consumed by the residential units and in the
common areas. The electricity purchased by Condo runs through a master meter that monitors
the total usage for the building including common areas of the condominium (elevators, hallway
lighting, and the like shared by all residential and commercial units) and the residential units.
ConEd’s bill includes a separate charge for sales tax.
Condo has engaged a company which has installed sub-meters to monitor the usage of
each of the residential units. The usage for the residential units is billed to the unit owners by
Condo based on actual usage as determined by the sub-metering. The sub-metering company
provides Condo with a written report each month that details the amount to be charged to each
unit based upon each unit’s actual consumption of electricity. The amount billed to each
residential unit includes, in addition to the actual cost of the electricity as purchased from ConEd
(including the sales tax charged by ConEd), a 7.5% administrative fee computed on the unit’s
electric usage bill including the sales tax charged by ConEd, and a $4 sub-meter fee that is used
to defray the expense of the sub-metering fee paid by Condo to the sub-metering firm.
Condo pays for the portion of the electricity purchased from ConEd and consumed in the
common areas of the condominium out of the monthly common charges that are paid to Condo
by all of the unit owners for various services received by the unit owners.

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Applicable law and regulations
Section 1101(b) of the Tax Law provides, in part:
When used in this article for the purposes of the taxes imposed by subdivisions
(a), (b), (c) and (d) of section eleven hundred five and by section eleven hundred ten, the
following terms shall mean:
*

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*

(3) Receipt. The amount of the sale price of any property and the charge for any
service taxable under this article, including gas and gas service and electricity and electric
service of whatever nature, valued in money, whether received in money or otherwise,
including any amount for which credit is allowed by the vendor to the purchaser, without
any deduction for expenses or early payment discounts and also including any charges by
the vendor to the purchaser for shipping or delivery, and, with respect to gas and gas
service and electricity and electric service, any charges by the vendor for transportation,
transmission or distribution, regardless of whether such charges are separately stated in
the written contract, if any, or on the bill rendered to such purchaser and regardless of
whether such shipping or delivery or transportation, transmission, or distribution is
provided by such vendor or a third party, but excluding any credit for tangible personal
property accepted in part payment and intended for resale. . . .
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*

(8) Vendor. (i) The term "vendor" includes:
(A) A person making sales of tangible personal property or services, the receipts
from which are taxed by this article; . . .
Section 1105 of the Tax Law provides, in part:
Imposition of sales tax On and after June first, nineteen hundred seventy-one,
there is hereby imposed and there shall be paid a tax . . . upon:
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(b)(1) The receipts from every sale, other than sales for resale, of the following:
(A) gas, electricity, refrigeration and steam, and gas, electric, refrigeration and steam
service of whatever nature; . . .
Section 1105-A of the Tax Law provides, in part:

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Reduced tax rate on certain energy sources and services (a) Notwithstanding
any other provisions of this article, but not for purposes of the taxes imposed by section
eleven hundred seven or eleven hundred eight or authorized pursuant to the authority of
article twenty-nine of this chapter, the taxes imposed by subdivision (a) or (b) of section
eleven hundred five on . . . the receipts from every sale, other than for resale, of . . .
electricity . . . and . . . electric . . . services used for residential purposes shall be paid at
the rate of . . . zero percent on and after October first, nineteen hundred eighty. . . .
Section 1107 of the Tax Law provides, in part:
Temporary municipal assistance sales and compensating use taxes for cities
of one million or more (a) General. On the first day of the first month following the
month in which a municipal assistance corporation is created under article ten of the
public authorities law for a city of one million or more, in addition to the taxes imposed
by sections eleven hundred five and eleven hundred ten, there is hereby imposed on such
date, within the territorial limits of such city, and there shall be paid, additional taxes . . .
which except as provided in subdivision (b) of this section, shall be identical to the taxes
imposed by sections eleven hundred five and eleven hundred ten. Such sections and the
other sections of this article, including the definition and exemption provisions, shall
apply for purposes of the taxes imposed by this section in the same manner and with the
same force and effect as if the language of those sections had been incorporated in full
into this section and had expressly referred to the taxes imposed by this section.
Section 1109 of the Tax Law provides, in part:
Sales and compensating use taxes for the metropolitan commuter
transportation district (a) General. In addition to the taxes imposed by sections eleven
hundred five and eleven hundred ten of this article, there is hereby imposed within the
territorial limits of the metropolitan commuter transportation district created and
established pursuant to section twelve hundred sixty-two of the public authorities law,
and there shall be paid, additional taxes, at the rate of one-quarter of one percent, which
shall be identical to the taxes imposed by sections eleven hundred five and eleven
hundred ten of this article. Such sections and the other sections of this article, including
the definition and exemption provisions, shall apply for purposes of the taxes imposed by
this section in the same manner and with the same force and effect as if the language of
those sections had been incorporated in full into this section and had expressly referred to
the taxes imposed by this section.
Section 526.5(e) of the Sales and Use Tax Regulations provides, in part:
Expenses. All expenses, including telephone and telegraph and other service
charges, incurred by a vendor in making a sale, regardless of their taxable status and
regardless of whether they are billed to a customer are not deductible from the receipts.

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Section 527.2(a) of the Sales and Use Tax Regulations provides, in part:
Sale of utility and similar services. (a) Imposition. (1) Section 1105(b) of the
Tax Law imposes a tax on the receipts from every sale, except a sale for resale . . . of
(i) gas, electricity, refrigeration and steam, and gas, electric, refrigeration and
steam service of whatever nature; . . . .
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*

(2) Although this tax is generally known as the "consumer's utility tax," the
intention of the statute is to tax the enumerated sales and services whether or not rendered
by a company subject to regulation as a utility company. The words "of whatever nature"
indicate that a broad construction is to be given the terms describing the items taxed. The
inclusion of the word "service" indicates an intent to tax, under this provision, items that
are furnished as a continuous supply while the vendor-vendee relationship exists.
Section 527.13 of the Sales and Use Tax Regulations provides, in part:
(a) Reduction in rate. (1) Section 1105-A of the Tax Law provides for a reduction
in the . . . statewide sales tax rate imposed under sections 1105(a) and 1105(b) of the Tax
Law and in the . . . statewide compensating use tax rate imposed under section 1110(a) of
the Tax law, as set forth in subdivision (c) of this section, on the receipts from every sale,
other than for resale, used for residential purposes of:
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*

(vi) electricity;

(viii) . . . electric . . . services.
For purposes of this regulation, the term energy sources is used to describe the
above-mentioned tangible personal property and services.
(2) The reduction in the sales and compensating use tax rates does not apply to
those tax rates imposed by localities, pursuant to article 29 of the Tax Law, nor to the
four-percent sales and compensating use tax rate in New York City which is imposed by
section 1107 of the Tax Law. . . .
*

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*

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(d) Definitions. (1) The term residential purposes means any use of a structure or
part of a structure as a place of abode, maintained by or for a person, whether or not
owned by such person, on other than a temporary or transient basis with the exclusion of
accommodations subject to tax under subdivision (e) of section 1105 of the Tax Law.
(2) The term nonresidential purposes means any use other than for residential
purposes, as defined in paragraph (l) of this subdivision, including any use in the conduct
of a trade, business or profession, whether such trade, business or profession is carried on
by the owner of the structure or some other person.
(3) The term common area means any area of the premises of a structure used
without distinction for both residential and nonresidential purposes.
(e) Certification and allocation. (1) Purchases of energy sources used exclusively
for residential purposes shall receive the reduced tax rate without the necessity of
certification.
(2) Where energy sources billed on a single meter or in a lump sum are used for
both residential and nonresidential purposes, and the residential purposes constitute 75
percent or more of the usage, the entire amount billed shall be taxed at the reduced sales
tax rate without certification. See paragraph (5) of this subdivision to determine the
percentage of residential use.
(3) Where energy sources billed on a single meter or in a lump sum are used for
both residential and nonresidential and less than 75 percent of the usage is for residential
purposes, the purchaser is entitled to the reduced tax rate on only the percentage of
energy sources used for residential purposes. This percentage shall be determined in
accordance with paragraph (5) of this subdivision and shall be rounded off to the nearest
10 percent. A certificate shall be filed in the form provided and shall be given by the
purchaser to the supplier of the energy sources. In the absence of such a certificate, the
supplier of energy sources shall collect the full tax on the entire usage.
(4) Where a structure is exclusively used for nonresidential purposes, no
certification or statement is required, since no eligibility for a reduced sales tax rate shall
exist for purchases of energy sources and services.
(5) To determine the percentage of the area of a structure used for residential
purposes, the following formula shall be used by the purchaser of the energy sources and
services: total area of space used for residential purposes, excluding common areas,
divided by the total area (residential and nonresidential), excluding common areas, equals
the percentage rounded off to the nearest 10 percent applicable to use for residential
purposes. Thus, if the percentage before rounding is 74.9 percent, the percentage when
rounded is 70 percent.

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(6) Certifications, when needed, may be obtained from the Taxpayer's Assistance
Bureau at the State Campus in Albany, from any district tax office or from the supplier of
the energy sources and services.
(f) Customer classification. (1) Vendors of energy sources which are regulated by
the New York State Public Service Commission and which have on file therewith a tariff
or rate schedule which classifies its customer either as residential or nonresidential, may
request from the Department of Taxation and Finance approval to use such classifications
for determining the eligibility of its customer for a reduced sales tax rate without
certification.
(2) All other vendors of energy sources may use from their records any
classifications presently in use which classifies a customer as either a residential or
nonresidential customer. If there is no such classification, the vendor is required to make
a visual inspection of the structure to determine his customer's classification in
accordance with subdivision (e) of this section for eligibility for a reduced sales tax rate
without certification.
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(4) Where a customer is eligible for the reduced tax rate, as a residential customer
described in paragraph (1) or (2) of subdivision (e) of this section, but the supplier of
energy sources has not classified him as a residential user, the customer should furnish
the supplier with a certification.
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*

(g) Collection of tax. (l) Every vendor, making a sale of energy sources to a
customer who is classified as a residential customer, shall collect the sales tax at the
reduced sales tax rate on such customer's total purchase.
(2) Every supplier of energy sources who has received from his customer a
certification shall collect the sales tax at the reduced rate on the portion of the purchase
shown as being used for residential purposes and shall collect the tax at the full rate on
the remainder which is used for nonresidential purposes.
(3) Every vendor making sales of energy sources which are used for
nonresidential purposes shall collect the sales tax at the full rate.
Opinion
Petitioner’s client (Condo) is an unincorporated condominium management association.
The condominium is located in Brooklyn, New York, and consists of 42 residential apartment

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condominium units and 2 commercial condominium units. The commercial units have separate
electric meters and purchase electricity and electric service directly from ConEd.
Condo purchases electricity from ConEd through a master meter that monitors the total
non-commercial usage for the building including common areas of the condominium (elevators,
hallway lighting, and the like, shared by all residential and commercial units) and the residential
units. Condo has had separate sub-meters installed to monitor the electric usage of each of the
residential units. Condo bills the residential unit owners for their actual electric usage based on
the sub-metering. The amount billed to each residential unit as a charge for electricity includes
in addition to the actual cost of the electricity as purchased from ConEd (including the sales tax
charged by ConEd), an administrative fee and a sub-meter fee.
Condo pays for the portion of the electricity purchased from ConEd and consumed in the
common areas of the condominium out of the monthly common charges that are paid to Condo
by all of the unit owners for various services received by the unit owners.
Condo’s responsibility as vendor
Section 1105(b) of the Tax Law imposes the sales tax on utility services furnished as a
separate identifiable sales transaction as a commodity and applies to separate transactions which
have as their primary purpose the furnishing of utilities or utility services. Condo bills each of
the residential unit owners for electricity or electric service based on actual usage as determined
by sub-meter readings. Accordingly, Condo is making sales of electricity or electric service to
its residential unit owners through sub-metering, which sales are presumed to be subject to sales
tax unless the contrary is established. See section 1132(c) of the Tax Law and Matter of Mutual
Redevelopment Houses, Inc. v Arthur J. Roth, 307 AD 2d 422 (3d Dept 2003).
Section 1105-A of the Tax Law exempts energy sources and services used for residential
purposes from New York State sales and use tax (but not from tax imposed by localities).
Therefore, Condo’s sales of electricity or electric service to its residential unit owners are exempt
from the statewide portion of the tax as well as the tax imposed within the Metropolitan
Commuter Transportation District pursuant to section 1109 of the Tax Law. However, such
sales are subject to the local portion of the sales tax imposed within New York City under
section 1107 of the Tax Law.
Since Condo is a person making sales of electricity or electric service, the receipts from
which are taxed by Article 28 of the Tax Law, Condo is required to register as a vendor for sales
tax purposes and undertake the responsibilities of a registered vendor, including the collection
and remittance of the applicable sales tax upon its taxable sales.

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Tax treatment of electricity used in common areas
In the case of residential condominium associations, under the circumstances where
communal areas are closed to the general public, such as parking lots, play areas, community
buildings or club houses, swimming pools, hallways and stairways, these areas are considered
used for residential purposes. Energy sources and services purchased exclusively to heat or light
these communal areas are exempt from State sales and use taxes and will be subject to reduced
local rates or exempt from local taxes if the locality has elected to provide reduced rates or such
an exemption, as the case may be. See Cynthia Havey, Adv Op Comm T & F, August 22, 2000,
TSB-A-00(31)S.
A portion of Condo’s purchases of electricity or electric service from ConEd is used or
consumed in the common areas of the condominium shared by both residential and commercial
condominium units. These purchases are paid for by Condo from the monthly charges that are
paid to Condo by both the residential and commercial unit owners for various services received
by both these unit owners. These charges are not based on electric usage, actual or otherwise,
are not separately stated as charges for electricity or electric service on a bill or invoice to the
unit owners and are merely a part of Condo’s monthly charges to both the residential and
commercial unit owners and are not separately sold. Therefore, the purchase by Condo of this
portion of the electricity or electric service is not considered to be a purchase of electricity or
electric service for resale by Condo. See Debevoise & Plimpton v New York State Dept. of
Taxation & Fin., 80 NY2d 657; Empire State Bldg. Co. v New York State Dept. of Taxation &
Fin., 81 NY2d 1002. Since the unit owners are not separately billed for actual usage in this
instance, Condo should not collect sales tax on these monthly charges. However, the purchase
by Condo of the electricity used in such common areas is presumed to be subject to sales tax
unless the contrary is established. See section 1132(c) of the Tax Law.
In order to determine what rate of sales tax is to be paid where a condominium association
purchases electricity and electric service for use in its common areas, it is necessary to allocate
the portion of electricity and electric services attributable to residential purposes and the portion
attributable to nonresidential purposes. Condo is liable only for the residential rate of sales tax
(currently 4 ⅛% in New York City) on the portion of electricity or electric service attributable to
residential purposes. Condo is liable for the full rate of sales tax (currently 8⅝% in New York
City) on the portion of electricity or electric service attributable to commercial purposes.
In this case, the commercial units are metered and billed separately by ConEd. ConEd
sends Condo a single bill which includes Condo’s purchases of electricity consumed by its
residential units and in Condo’s common areas. Condo sub-meters the residential units, and is
therefore able to determine precisely the amount of electricity used in the common areas.
The provisions of section 527.13(e) of the Sales and Use Tax Regulations prescribe a
formula for allocating utility usage among a building's residential and nonresidential usage
where the utilities are purchased in bulk through a single meter. Petitioner has separate meters

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for its commercial (nonresidential) and residential users and separately measures its electrical
usage in common areas.
Under the circumstances described in this Advisory Opinion, where the only energy
source that needs to be allocated is the energy consumed in common areas used for residential
and nonresidential purposes, the formula described in section 527.13(e)(5) of the Sales and Use
Tax Regulations to determine an allocation for residential and nonresidential use does not apply.
Instead, Condo may allocate the electricity and electric service used in common areas by any
reasonable method which accurately reflects the usage in common areas (e.g., number and
wattage of lights in commercial hallways, entrances, etc., compared to number and wattage of
lights in residential hallways, entrances, etc.; or square footage of commercial hallways
compared to square footage of residential hallways). If a common area, such as a hallway, is
shared by both the residential and commercial unit owners, a method based on the total square
footage of the residential units (excluding the common areas) divided by the total square footage
of all units (excluding the common areas) might be used.
Payment and reporting of the sales tax
Electricity and electric service is purchased by Condo from ConEd on a master meter. A
portion of this electricity and electric service is consumed by Condo for use in the common areas
(which is a taxable purchase by Condo) and the other portion is resold by Condo to the
residential condominium owners. Such electricity and electric service is not exclusively
purchased for resale by Condo since a portion of the purchased electricity and service is
consumed in the common areas. Therefore, Condo cannot properly issue a resale certificate to
ConEd to make such purchase without payment of sales tax.
Pursuant to the provisions of section 527.13(f) of the Sales and Use Tax Regulations,
Condo’s purchases of the electricity and electric services being delivered through the master
meter may have previously been classified by ConEd as nonresidential, in which instance Condo
would currently be charged tax at the nonresidential rate. However, assuming 75% or more of
the total electricity and electric services purchased is consumed for residential purposes (i.e., the
sum of the electricity and electric service allocable to the residential portion of the common areas
plus the electricity and electric service resold to the residential unit owners), Condo may submit
a Certification of Residential Use of Energy Purchases (Form TP-385) stating that the total
residential use constitutes 75% or more of the service purchased by Condo from ConEd via the
master meter. ConEd would then bill Condo for all of the electricity and electric service
purchased through the master meter at the New York City residential rate.
If Condo has paid tax at the residential rate on its purchases of electricity used in the
common areas, Condo will be liable for the difference between the residential rate and the full
rate of tax on that portion of its purchase of electricity or electric service attributable to
nonresidential usage in the common areas. Condo should pay such additional sales tax at the
current rate of 4½% directly to the Tax Department on its periodic sales and use tax return.

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As mentioned above, Condo is also required to collect sales tax on electricity and electric
service sold to its sub-metered residential customers at the residential rate imposed in New York
City. Sales tax so collected must be remitted with Condo’s periodic sales and use tax return.
Since Condo will have already paid sales tax to ConEd on its purchases of the electricity or
electric service, including the service actually resold to its residential customers, Condo may
apply the sales tax it paid to ConEd on the portion of the electricity or electric service which
Condo resells to its residential customers as a credit against the sales tax collected from its
residential customers on its sales tax return. Condo will then remit with its sales tax return the
difference between the amount of tax it has collected from its residential customers and the
amount it has paid to ConEd on electricity or electric service which it resold. The taxable receipt
for electricity and electric service sub-metered and resold to the residential unit owners is based
on the amount Condo bills its customers. This amount includes Condo’s cost of such electricity
and electric service paid to ConEd, any administrative fee charged the unit owners for their
electric usage, the sub-meter fee that is used to defray the expense of the sub-metering fee paid
by Condo and any markup and fees billed the unit owners as part of such service. Condo is
entitled to apply any sales tax charged to Condo by ConEd on that portion of the electricity
resold by Condo to residential customers as a credit against the sales tax it is required to collect
from its customers. However, if Condo bills its customer for the amount of sales tax it was
charged by ConEd, such amount is considered included in Condo’s markup and, therefore, would
be a part of the taxable receipt charged by Condo to its customers. See section 526.5(e) of the
Sales and Use Tax Regulations.

DATED: March 18, 2005

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.