DALLAS, March 17, 2017 /PRNewswire/ -- The New York Division of Tax Appeals ("Division") denied petitions for refund of sales and use taxes filed by XO Communications Services LLC ("Petitioner"), a national provider of telecommunication services, on its purchases of electricity. Petitioner argued that the portion of the electricity it purchased to power equipment and carry the signal for its telecommunication services was purchased for resale and exempt from sales tax. The electricity was considered a component part of the telecommunication services sold to its customers.
The Division concluded that, because the Petitioner's purchases of electricity were not purchases of tangible personal property, the resale exclusion under Reg. Section 526.6(c) did not apply. In addition, although Reg. Section 527.2 provides a resale exclusion for electricity, it is limited to purchases of electricity "for resale as such." Petitioner's customers were not purchasing and paying for electricity. Petitioner was simply purchasing electricity to produce the telecommunication services sold. Petitioner did not bill its customers for electricity or measure the voltage received at the customers' locations. Additionally, Petitioner did not provide a resale certificate to its vendors.
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