S143 (Maziarz) / A5138 (Ceretto)

As part of the 2009-10 New York State Budget, a temporary assessment surcharge was placed on churches and other non-profits. This law stipulates that the surcharge is applicable to New York State gas, electric, steam and water corporations, and similar municipal entities subject to the state's Public Service Commission’s jurisdiction. The surcharge is currently scheduled to remain in effect until March 31, 2014. All monies collected from this assessment will be transferred to New York State for the state’s General Fund.

This surcharge is collected at a rate of 2% of gross operating revenues and third-party suppliers in New York. The assessment is applied to customer usage; therefore the actual bill impact for each customer will vary significantly depending upon individual customer consumption.

New York State Tax Law § 1116 lists any corporation or association organized  and  operated exclusively for religious, charitable, or  educational  purposes, as one of the organizations exempt from payment of state sales tax. Electricity is a commodity, and this temporary assessment is simply a sales tax placed upon churches and other non-profit religious organizations.

According to the New York State Constitution, Article XVI, § 1, “Exemptions from taxation may be granted only by general laws. Exemptions may be altered or repealed except those exempting real or personal property used exclusively for religious, educational or charitable purposes as defined by law and owned by any corporation or association organized or conducted exclusively for one or more of such purposes and not operating for profit.”

The New York State Constitution specifically forbids the taxation of churches. New Yorkers for Constitutional Freedoms (NYCF) believes the utility tax was an oversight on behalf of the New York State Legislature, and is seeking correction of this oversight in the 2011-12 budget process.

Should an amendment fail to be included in this year’s State Budget, NYCF strongly backs S143 (Maziarz)/A5138 (Ceretto) to correct this legislative oversight.