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NYC Department of Finance Notices and Demands for Payment of Utility Taxes May Have Been Sent in Error

August 16, 2017
Peter M. Metzger
New York

The New York City Department of Finance recently sent a “Notice and Demand” to a number of taxpayers requiring them to pay New York City utility taxes (also known as NYC excise taxes or NYC gross receipts taxes) on certain energy commodity sales they made to NYC customers in past years. The payments sought under these Notices and Demands include not only the principal utility tax deemed to be owing (calculated at a rate of 2.35%), but also additional, significant interest and penalty charges. The Notices usually also state that the failure to pay the amount due and owing on or before the date stated in the Notice may result in the docketing of a warrant against the taxpayer with the County Clerk. A warrant is a lien on non-exempt real and personal property.

Some of these Notices were sent to taxpayers in error. If you have received a Notice and Demand or have any questions about this subject, please feel free to contact Peter Metzger at (212) 510-2273 or via email at pmetzger@cullenanddykman.com, or via regular mail at Cullen and Dykman LLP, 44 Wall Street, New York, NY 10005.

Cullen and Dykman represents gas and electric energy service companies (ESCOs); gas, electric, and water utilities, electric generation companies, gas pipeline companies, and other energy industry participants in connection with state and local sales and use taxes, gross receipts/utility/excise taxes, transfer taxes, other taxes unique to the energy industry, corporate income taxes, multi-state corporate taxation, commercial rent taxes, and related matters. The firm provides a full array of state and local tax assistance and advocacy, including tax planning, proposed transaction evaluation, securing advisory opinions, representation during state and local tax audits, negotiation with state and local tax authorities, tax litigation before state and local administrative agencies and state, trial and appellate courts, advice concerning tax policy and legislation, and general state and local tax advice.