Connecticut State Department of Revenue Services

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SN 93(27)

1993 Legislative Amendments Affecting the
Utilities Company Tax

PURPOSE: This Special Notice describes amendments affecting the Utility Companies Tax Act made during the 1993 session of the Connecticut General Assembly.

EFFECTIVE DATE: Effective upon issuance and applicable to calendar quarters commencing on or after January 1, 1994, with the exception of the deduction from gross earnings of the federal B.T.U. energy tax.

STATUTORY AUTHORITY: Conn Gen. Stat. Section 12-265, as amended by 1993 Conn. Pub. Acts 74, Sections 11, 50, and 65, and Conn. Pub. Acts 332, Section 8.

DEDUCTION FOR FEDERAL B.T.U. ENERGY TAX: The 1993 B.T.U. energy tax, although given serious consideration by Congress, did not become law; therefore, the deduction from gross earnings for any such tax included in adjustment clause and base-rate revenues is inoperative. (Had Congress passed the B.T.U. tax, it would have been effective for calendar quarters commencing on or after January 1, 1993.).

TAX RATE DECREASES: Gross earnings from the sale, furnishing or distribution of electricity or natural gas to a company which is engaged in a manufacturing production process that is described in Classifications 2000 through 3999, inclusive, of the Standard Industrial Classification Manual, United States Office of Management and Budget, 1987 Edition, are taxed at a lower rate, even if none of the electricity or natural gas is used in the manufacturing production process, as follows:

  • For calendar Quarter commencing on or after January 1, 1994 but before January 1, 1995 the tax rate is 4%.
  • For calendar Quarter commencing on or after January 1, 1995 but before January 1, 1996 the tax rate is 3%.
  • For calendar Quarter commencing on or after January 1, 1996 but before January 1, 1997 the tax rate is 2%.
  • For calendar Quarter commencing on or after January 1, 1997 the tax rate is 0%.
Utility companies will be entitled to taxation of their gross earnings at a lower rate as long as a utility customer is engaged in a manufacturing production process:
  • even if not so engaged at a particular location to which utility service is furnished,
    and
  • even if not so engaged in Connecticut.

Utility companies should substantiate their entitlement to taxation of their gross earnings at a lower rate by obtaining and retaining a written statement from every customer which is engaged in a manufacturing production process that is described in Classifications 2000 through 3999, inclusive, of the Standard Industrial Classifications Manual, United States Office of Management and Budget, 1987 Edition, certifying that the customer is engaged in such a process.

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 93(27)
Utility companies tax
Issued: 12/9/93