Does the city charge sales tax on gas, water or electricity? What about sewer charges?
Cities must collect sales tax on the selling or furnishing of electricity, gas and water to commercial and residential customers. Sewer collection charges billed to nonresidential commercial operations are subject to sales tax. Nonresidential commercial operations are any industrial, commercial, agricultural or mining operation, including hotels and motels. The word commercial is not only a for profit operation, but refers to all organizations, including churches, charities and fraternal organizations that are involved in the buying and selling of goods and services in the marketplace. Residential customers, such as single and multi-family dwellings, mobile home parks and apartment complexes are exempt from sales tax on sewer service. Governmental entities, such as schools, do not pay sales tax on purchases and would, therefore, be exempt from sales tax on utility charges.
