Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Energy Resources Surcharge Annotations

CONSTITUTIONAL EXEMPTION

Consular Officials

Qualified consular officials and employees, representing a country which is a signatory of the Vienna Convention on Consular Relations, are exempt from payment of the Energy Resources Surcharge. 3/22/82.

Federally Owned Buildings

Contractor taxpayer provides comprehensive commercial facility management services at three federally owned buildings. The services required for these buildings include all utility services for which the contractor is responsible for payment in behalf of the Federal Government. The electric utility lists the contractor and not the Federal Government as the purchaser. The contractor neither owns nor leases the buildings and apparently does not occupy or have the right to occupy them. The consumer of the electric energy is the Federal Government. Therefore, the sale of the electric energy is exempt from the surcharge. 2/16/89.

Job Corps Center

Charges to a contractor, who is also the operator of a Job Corps Center, are exempt from the Energy Resources Surcharge as exempt sales to the U.S. Government. If the contractor is not the operator but simply a supplier or a consultant, the exemption does not apply. 7/27/93.

Insurance Company

An insurance company which is subject to taxation under the California Constitution, Article XIII, Section 28 is exempt from the Energy Resources Surcharge.

An insurance company is the sole owner of four buildings in this state and contracts with a property realty group to manage the buildings. The electric utility bills are in the name of the fictitious business name in care of the property realty group and the bills are paid by the property realty group. The buildings are occupied by both the insurance company staff and third-party lessees.

The identity of the party who writes the checks for the utility bill is not the issue. The issue is who is legally responsible for the utility services for the buildings. In other words, who is the consumer of the utility services? If the lease contract includes the utility service, the landlord is the consumer and if it does not, the tenant is the consumer. Since the utility bills are paid by the realty property manager, who is acting as an agent for the insurance company, the amounts are exempt from the surcharge. 4/8/94.

Insurance Company

An insurance company owns a farm which is operated by a farm management company. Because the insurance company is contractually responsible for the monthly utility bills, the utility charges incurred by the farm management company acting on behalf of the insurance company are exempt from the Energy Resources Surcharge under the California Constitution Article XIII, Section 28. 3/25/96.