[HISTORY: Adopted by Common Council of City of North Tonawanda as L. L. No. 1, 1937; became a law 7-15-1937. Amendments noted where applicable.]
By section 20-b of the General City Law, as added by chapter 331 of the laws of 1937, cities were authorized to enact local laws imposing a tax such as is imposed by section 186-a of the Tax Law. Pursuant to such authority, this city enacted local law number one of 1937 modeled upon said section 186-a. Said section was enacted upon the recommendation of the governor of the state as an emergency measure to aid in financing the extraordinary cost of relief. It was intended thereby and likewise by the local law enacted in this city pursuant to the above mentioned authority, to impose a tax on utility services whether rendered by utilities in the strict sense or not, and whether such services were in the main or incidental part of their business and regardless of whether the public streets were used in any manner. Accordingly, such a utility was defined for the purposes of the tax, as including every person subject to the supervision of the department of public service and every other person furnishing utility services. It was intended to include persons and corporations which were directly in competition with ordinary utilities, such as, landlords and submeterers, who buy their services from the other utilities and, in turn, resell such services. For that reason the tax was imposed on receipts from sales to ultimate consumers. Receipts from the sale of such utility services to submeterers were not taxed, but receipts of submeterers from their own customers were intended to be taxed. Any other construction would have resulted in a complete exemption from taxation of utility services sold or furnished by this particular method. Furthermore, these submeterers or landlords, prior to a decision of the appellate courts construing section 186-a of the Tax Law, which decided that submeterers were not subject to tax, considered themselves subject to tax and took into consideration in computing their operating cost the additional burden of the tax.
In view of the fact that these landlords or submeterers have considered themsleves as subject to tax, have based their charges to their customers in consideration of the tax and are in competition with ordinary utilities, this local law, making it clear that they are required to include in gross operating income receipts from sales or services similar to those rendered by ordinary utilities, is made retroactive to the original enactment of this tax.
Furthermore, it is believed that submeterers have common characteristics that distinguish them from other businesses and justify the conclusion that the method, character and nature of their business, in this aspect, is substantially similar to the business of an ordinary utility and requires similar treatment for purposes of the tax. This conclusion is strongly fortified by the fact that such landlords and submeterers are in direct competition with ordinary utilities, and hence should bear similar tax burdens in order to avoid inequality of treatment.
Editor's Note: Added by L.L. No. 1, 1941, which became a law 7-8-1941. Filed in Department of State 5-1-1948.
Tax imposed. Pursuant to the authority granted by section 20-b of the General City Law of the state of New York, a tax equal to 1% of its annual gross income, from and after July first, 1937, is hereby imposed upon every utility doing business in the city of North Tonawanda, which is subject to the supervision of the state department of public service, which has a gross income for the 12 months ending May 31st in excess of $500, except motor carriers or brokers, subject to such supervision under article three-b of the Public Service Law, and a tax equal to 1% of its gross operating income is hereby imposed, from and after July first, 1937, upon every other utility doing business in the city of North Tonawanda which has a gross income for the 12 months ending May 31st in excess of $500 which taxes shall have application only within the territorial limits of the city of North Tonawanda, and shall be in addition to any and all other taxes and fees imposed by any other provision of law for the same period. Such taxes shall not be imposed on any transaction originating or consumated outside of the territorial limits of the city of North Tonawanda, notwithstanding that some act be necessarily performed with respect to such transaction within such limits.
[As amended by L.L. No. 1-1950]
So in original. [Word misspelled.]
Definitions. As used in this section, (a) the word "Utility" includes every person subject to the supervision of either division of the state department of public service, except persons engaged in the business of operating or leasing sleeping and parlor railroad cars or of operating railroads other than street surface, rapid transit, subway and elevated railroads, and also includes every person who sells gas, electricity, steam, water, refrigeration, telephony or telegraphy, delivered through mains, pipes or wires, or furnishes gas, electric, steam, water, refrigerator, telephone or telegraph service, by means of mains, pipes, or wires; regardless of whether such activities are the main business of such person or are only incidental thereto, or of whether use is made of the public streets; (b) the word "person" means persons, corporations, companies, associations, joint-stock associations, co-partnerships, estates, assignee of rents, any person acting in a fiduciary capacity, or any other entity, and persons, their assignees, lessees, trustees or receivers, appointed by any court whatsoever, or by any other means, except the state municipalities, political and civil subdivisions of the state or municipality, and public districts; (c) the word "gross income" means and include receipts received in or by reason of any sale, conditional or otherwise, made or services rendered for ultimate consumption or use by the purchaser in the city of North Tonawanda, including cash, credits, and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or services or other costs, interest or discount paid, or any other expense whatsoever; also profits from the sale of securities; also profits from the sale of real property growing out of the ownership or use of or interest in such property; also profit from the sale of personal property; also receipts from interest, dividends, and royalties, derived from sources within the city of North Tonawanda other than such as are received from a corporation a majority of whose voting stock so owned by the taxpaying utility, without any deduction therefrom for any expenses whatsoever incurred in connection with the receipt thereof, and also profits from any transaction within the city of North Tonawanda whatsoever; and (d) the words "gross operating income" mean and include receipts received in or by reason of any sale, conditional or otherwise, made for ultimate consumption or use by the purchaser of gas, electricity, steam, water, refrigeration, telephony or telegraphy, or in or by reason of the furnishing for such consumption or use of gas, electric, steam, water, refrigerator, telephone or telegraph service in the city of North Tonawanda, including cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or services or other costs, interest or discount paid, or any other expenses whatsoever.
[As amended by L.L. No. 1-1941, filed 5-1-1948]
Note: In the event that the amendments made to § 87-1B by this local law are declared by a court of competent jurisdiction to be invalid to the extent that they are made retroactive to July 15, 1937, then the tax imposed or continued by such amendments shall be applicable to recent transactions since January first, 1940.
Records to be kept. Every utility subject to tax under this section shall keep such records of its business and in such form as the city treasurer may require, and such records shall be preserved for a period of three years, except that the city treasurer may consent to their destruction within that period or may require that they be kept longer.
Returns to be filed; forms; affidavits. Every utility subject to tax hereunder shall file, on or before September 25th, December 25th, March 25th, and June 25th, a return for the three-calendar months preceding each return date including any period for which the tax imposed hereby or by an amendment is effective, each of which returns shall state the gross income or gross operating income for the period covered by each return. Returns shall be filed with the city treasurer on a form to be furnished by him for such purpose and shall contain such other data, information or matters as the city treasurer may require to be included therein. Notwithstanding the foregoing provisions of this section any utility whose average gross income or average gross operating income, as the case may be for the aforesaid three-months' period is less than $1,500, may file a return annually on June 25th for the twelve-preceding calendar months. The city treasurer, in order to insure payment of the tax imposed, may require at any time a further supplemental return which shall contain any data that may be specified by the city treasurer. Every return shall have annexed thereto an affidavit of the head of the utility making same, or of the owner of a copartner thereof, or of a principal officer of the corporation, if such business be conducted by a corporation to the effect that the statements contained therein are true.
[As amended by L.L. No. 1-1950]
Payment of tax. At the time of filing a return as required by this section, each utility shall pay to the city treasurer the tax imposed by this section for the period covered by such return. Such tax shall be due and payable at the time of filing the return or, if a return is not filed when due, on the last day of which the return is required to be filed.
Insufficent returns; hearing; review. In case any return filed pursuant to this section shall be insufficient or unsatisfactory to the city treasurer, and if a corrected or sufficient return is not filed within 20 days after the same is required by notice from the city treasurer, or if no return is made for any period, the city treasurer shall determine the amount of tax due from such information as he is able to obtain, and, if necessary, may estimate the tax on the basis of external indices or otherwise. The city treasurer shall give notice of such determination to the person liable for such tax. Such determination shall finally and irrevocably fix such tax, unless the person against whom it is assessed shall, within 30 days after the giving of notice to such determination, apply to the city treasurer for a hearing, or unless the city treasurer, of his own motion shall reduce the same. After such hearing, the city treasurer shall give notice of his decision to the person liable for the tax. The decision of the city treasurer may be reviewed by a proceeding under article 78 of the Civil Practice Act of the state of New York, if application therefor is made within 30 days after the giving of notice of such decision. An order to review such decision shall not be granted unless the amount of any tax sought to be reviewed, with interest and penalties thereon, if any, shall be first deposited with the city treasurer and an undertaking filed with him, in such amount and with such sureties as a justice of the Supreme Court shall approve, to the effect that if such proceeding be dismissed or the tax confirmed, the applicant will pay all costs and charges which may accrue in the prosecution of such proceeding, or at the option of the applicant, such undertaking may be in a sum sufficient to cover the tax, interest, penalties, costs and charges aforesaid, in which event the application shall not be required to pay such tax, interest and penalties as a condition precedent to the granting of such order.
[As amended by L.L. No. 1-1940]
So in original. [Evidently should be "applicant."]
Mailing of notice; presumption; time. Any notice authorized or required under the provisions of this section may be given by mailing the same to the person for whom it is intended, in a postpaid envelope, addressed to such person at the address given by him in the last return filed by him under this section, or, if no return has been filed, then to such address as may be obtainable. The mailing of such notice shall be presumptive evidence of the receipt of the same by the person to whom addressed. Any period of time, which is determined according to the provisions of this section by the giving of notice, shall commence to run from the date of mailing of such notice.
Penalty for late return. Any person failing to file a return or corrected return, or to pay any tax or any portion thereof, within the time required by this section shall be subject to a penalty of 5% of the amount of tax due, plus 1% of such tax for each month of delay or fraction thereof, excepting the first month, after such return was required to be filed or such tax became due; but the city treasurer, if satisfied that the delay was excusable, may remit all or any portion of such penalty.
Refunds. If, within one year from the payment of any tax or penalty, the payer thereof shall make application for a refund thereof and the city treasurer or the court shall determine that such tax or penalty or any portion thereof was erroneously or illegally collected, the city treasurer shall refund the amount so determined. For like cause and within the same period, a refund may be so made on the initiative of the city treasurer. However, no refund shall be made of a tax or penalty paid pursuant to a determination of the city treasurer as hereinbefore provided unless the city treasurer, after a hearing as hereinbefore provided, or on his own motion, shall have reduced the tax or penalty or it shall have been established in a proceeding under article 78 of the Civil Practice Act of the state of New York that such determination was erroneous or illegal. All refunds shall be made out of moneys collected under this section. An application for a refund, made as hereinbefore provided, shall be deemed an application for the revision of any tax or penalty complained of and the city treasurer may receive additional evidence with respect thereto. After making this determination, the city treasurer shall give notice thereof to the person interested, and he shall be entitled to an order to review such determination under said article 78, subject to the provisions hereinbefore contained relating to the granting of such an order.
[As amended by L.L. No. 1-1940]
By whom tax to be paid. The tax imposed by this section shall be charged against and be paid by the utility and shall not be added as a separate item to bills rendered by the utility to customers or others but shall constitute a part of the operating costs of such utility.
Action to enforce payment; lien. Whenever any person shall fail to pay any tax or penalty imposed by this section, the city attorney shall, upon the request of the city treasurer, bring an action to enforce payment of the same. The proceeds of any judgment obtained in any such action shall be paid to the city treasurer. Each such tax and penalty shall be a lien upon the property of the person liable to pay the same, in the same manner and to the same extent that the tax and penalty imposed by section 186 A of the Tax Law is made a lien.
Administration. In the administration of this section the city treasurer shall have power to make such reasonable rules and regulations, not inconsistent with law, as may be necessary for the exercise of his powers and the performance of his duties, and to prescribe the form of blanks, reports and other records relating to the administration and enforcement of the tax, to take testimony and proofs, under oath, with reference to any matter within the line of his official duty under this section, and to subpoena and require the attendance of witnesses and the production of books, papers and documents.
Confidential nature of returns; exceptions. Except in accordance with the proper judicial order or as otherwise provided by law, it shall be unlawful for the city treasurer, or any agent, clerk or employee of the city of North Tonawanda to divulge or make known in any manner the amount of gross income or gross operating income, or any particulars set forth or disclosed in any return under this section. The officer charged with the custody of such returns shall not be required to produce any of them or evidence of anything contained in them in any section or proceeding in any court, except on behalf of the city of North Tonawanda in an action or proceeding under the provisions of this section, or on behalf of the state tax commission in an action or proceeding under the provisions of the Tax Law of the state of New York, or on behalf of any party to any action or proceeding under the provisions of this section when the returns or facts shown thereby are directly involved in such action or proceeding, in either of which events the court may require the production of, and may admit in evidence, so much of said returns or of the facts shown thereby, as are pertinent to the action or proceeding, and no more. Nothing herein shall be construed to prohibit the delivery to a person, or his duly authorized representative, of a copy of any return filed by him, nor to prohibit the publication of statistics so classified as to prevent the identification of particular returns and the items thereof, or the publication of delinquent lists showing the names of persons who have failed to pay their taxes at the time and in the manner provided for by this section, together with any relevant information which in the opinion of the city treasurer may assist in the collection of such delinquent taxes; or the inspection by the city attorney or other legal representatives of the city of North Tonawanda of the return of any person who shall bring action to set aside or review the tax based thereon, or against whom an action has been instituted in accordance with the provisions of this section.
Any offense against the foregoing secrecy provisions shall be punishable by a fine not exceeding $1,000 or by imprisonment not exceeding six months, or both, and if the offender be an officer, agent, clerk or employee of the city of North Tonawanda he shall be dismissed from office, and shall be incapable of holding any office or employment in the city of North Tonawanda for a period of five years thereafter.
Notwithstanding any provisions of this section the city treasurer may exchange with the chief fiscal officer of any other city in the state of New York information contained in returns filed under this section, provided such other city grants similar privileges to the city of North Tonawanda, and provided such information is to be use for tax purposes only, and the city treasurer shall, upon request, furnish the state tax commission with any information contained in such returns.
Disposition of taxes and penalties. [As amended by L.L. No. 1, 1950] All taxes and penalties received by the city treasurer for taxes heretofore and hereafter imposed under this section shall be credited and deposited by him in the general fund of the city.
This local law shall take effect immediately.