The Third Department upheld the NYS Tax Appeals Tribunal’s determination that the petitioner, Brooklyn Union Gas Company, was not entitled to an investment tax credit (ITC) because it was in the business of delivering natural gas, not producing or processing a product as those terms are construed for an ITC under the Tax Law:
The record amply supports, for purposes of our limited review, the Tribunal’s determination that petitioners’ integrated system was primarily one of distribution and delivery rather than processing or manufacturing. The vast majority of petitioners’ 11,000-mile system, both in terms of size and cost, is comprised of pipes and mains through which natural gas flows. No material change occurs to the natural gas while in the pipes and mains, as these serve as the primary means for delivering the product. Viewing the system as a whole, the modifications made by petitioners to the gas – while important – do not result in a significant change in the product. Matter of Brooklyn Union Gas Company v NYS Tax Appeals Tribunal, 514825, 3rd Dept, 6-6-13
