If you’ve never heard of the Nursing Home Utility Tax Exemption, you might be overpaying on your taxes. In New York State nursing homes are eligible for a tax exemption on the portion of their utilities that are used for residential purposes. Based on the allocation of space between residential and nonresidential use, a sales tax reduction and petroleum business tax (PBT) exemption can be applied to the purchase of utilities such as gas, electricity, coal, refrigeration, steam and wood.

It’s on you to apply for the exception

It’s up to you to make sure your nursing home gets those tax breaks. In order to qualify and to stop the utility companies from charging you sales tax, you’ll need to complete and submit Form TP-385 ‘Certification of Residential Use of Energy Purchases’ to the utility company or fuel dealer from whom you purchase energy.

If you’re not sure if you are being charged sales tax, take a quick look at your utility bill. This is actually a good thing to do periodically. Even if you had previously requested an exemption, a change in ownership or name change can re-trigger the imposition of sales tax. If that happens, a new exemption may have to be requested.

Refunds are available for overpaid taxes

If you look at your utility bill and see that you have been overpaying sales tax, don’t despair. It is possible to get a refund of previously paid sales tax providing you complete the Form AU-11 ‘Application for Credit or Refund of Sales or Use Tax’ within three years from the date the tax was due.

If you’d like to learn more about the financial impact of this exemption for your facility or want help completing the forms, schedule a call with us today.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.


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