(a) Gross operating income includes receipts from sales of gas, electricity, steam, water, refrigeration, telephony or telegraphy, and from the furnishing of gas, electric, steam, water, refrigerator, telephone or telegraph service, for ultimate consumption or use within this State. It also includes receipts from transportation originating in, terminating in or traversing this State, by omnibuses having a seating capacity of more than seven persons, allocated within this State on a passenger mileage basis.

Manufacturing plants sometimes have a surplus of gas, electricity, steam, water or refrigeration, which they dispose of by selling to others. Are such plants within the definition of utilities and subject to tax on the receipts from such sales? Answer: Yes.

The owner or lessee of an apartment house or office building purchases gas, electricity, steam, water or refrigeration and resells the same to tenants either at flat or metered rates. Is the owner or lessee subject to tax on the receipts from such sales? Answer: Yes.

Does it make any difference whether the owner or lessee of the apartment house or office building resells the entire quantity purchased, or only a portion thereof consuming the balance? Answer: No. Where the owner or lessee uses or consumes a portion of the commodity or service purchased, his vendor is taxable on its receipts from such portion.

(b) Utilities in the second class are required to report all purchases of commodities which form the basis for the tax, regardless of whether they resell all that they purchase or only a portion thereof. If they resell any part of the quantity they purchase, they will be required to show in the detailed schedule of the tax return the places where sales were made or services rendered, together with the quantities sold and the amounts received on account of such sales, as well as the quantities consumed by them.

(c) In order that the apartment house, office building or other utility, which resells some part or all of the utility service purchased, may support its claim that all such service was not resold and that the utility which made the original sale may support its deduction of the quantity resold by its purchaser, it is necessary for the apartment house, office building or other utility so reselling utility services to report to its vendor, as of the end of its billing period, the quantity resold. In the city of New York, sales tax remission certificates may be accepted as such a report.

A utility sells 15,000 kilowatt hours of electricity to an office building between June 29, 1950, and July 25, 1950, which is billed as follows:

The average price per K.W.H. is, therefore, four cents. The office building, during a period ended in July, 1950, uses 6,000 K.W.H. and resells 8,000 K.W.H. to its tenants for $400. What amount is taxable as gross operating income of the office building? Answer: The office building will be subject to tax on its receipts of $400.

(d) Where a hotel or apartment house supplements for its guests or tenants the telephone service supplied them by the telephone company and makes a charge therefor, the amount of such charge, i.e., the excess above the charge of the telephone company, is required to be included in gross operating income of the hotel or apartment house. Where the telephone company graduates its charges for local messages according to the number emanating from the hotel or apartment house, the average charge of the telephone company for the reporting period shall be employed in determining the amount of the supplemental charge made by the hotel or apartment house.

A hotel or apartment house makes available to its guests or tenants telephone service furnished by the telephone company. If the telephone company charges five cents for its services in connection with a local message and the hotel or apartment house 10 cents for its supplemental services, what amount is the hotel or apartment house required to include in its gross operating income? Answer: Ten cents per message.

A guest of a New York City hotel calls San Francisco, Cal., and Buffalo, N. Y. The telephone company charges $12 for the San Francisco call and $1.80 for the Buffalo call. The hotel, for its supplemental service, adds 60 cents to the telephone charge for the San Francisco call and 10 cents to the charge for the Buffalo call. What amount is the hotel required to include in its gross operating income? Answer: Seventy cents, that being its supplemental charge for telephone services rendered its guest.