| Matter of Brooklyn Navy Yard Cogeneration Partners, L.P. v TaxAppeals Trib. of State of N.Y. |
| 2007 NY Slip Op 10423 [46 AD3d 1247] |
| December 27, 2007 |
| Appellate Division, Third Department |
| In the Matter of Brooklyn Navy Yard Cogeneration Partners, L.P.,Petitioner, v Tax Appeals Tribunal of State of New York et al.,Respondents. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Julie S. Mereson of counsel), forrespondents.
Rose, J. Proceeding pursuant to CPLR article 78 (initiated in this Court pursuant to Tax Law§ 2016) to review a determination of respondent Tax Appeals Tribunal which sustained anatural gas import tax assessment imposed under Tax Law former § 189 (6).
Petitioner imported natural gas used by it to generate steam and electricity at its cogenerationfacility. It then sold the steam and electricity to a thermal energy host. Because the host was apublic utility, it in turn resold that steam and electricity to its own customers. Tax Law former§ 189 (6) provided an exemption from the tax imposed by Tax Law former § 189 (2)on natural gas imported by a cogeneration facility, such as petitioner, and "used to generateelectricity and/or steam produced by such facility when such electricity or steam [was] suppliedand used by a thermal energy host located at or near the project site" (emphasis added).Respondent Tax Appeals Tribunal (hereinafter respondent) determined that petitioner was notexempt from taxation on the natural gas it imported because the utility, although qualifying as "athermal energy host located at or near the project site," had not used the steam and electricitywithin the meaning of Tax Law former § 189 (6). Petitioner contends that respondent[*2]misinterpreted the statute's words "and used by" when itconcluded that they do not include a resale of the electricity and steam to the host's customers.
To prevail over respondent's construction of the statute, petitioner must demonstrate thatrespondent's reading is irrational and its own is the only reasonable construction (see Matterof Federal Deposit Ins. Corp. v Commissioner of Taxation & Fin., 83 NY2d 44, 49 [1993]).Petitioner has not satisfied this burden. Rather, we are persuaded that respondent's interpretationis reasonable because it is consistent with the plain meaning of the words "and used by" (seeMatter of 1605 Book Ctr. v Tax Appeals Trib. of State of N.Y., 83 NY2d 240, 244 [1994],cert denied 513 US 811 [1994]). Giving "used" its "usual and commonly understoodmeaning" in the context of the phrase "and used by" (McKinney's Cons Law of NY, Book 1,Statutes § 232), it may be read to mean "employed for a purpose; utilized," "put intoservice" or "to expend or consume in use" (Random House Webster's Unabridged Dictionary2097 [2d ed 2001]). Since the resale of electricity and steam here does not expend or consumethe energy they contain, but only passes it along for a fee for use by others, it was reasonable toview the resold energy as not having been "used." In addition, we find nothing in the statute or itslegislative history suggesting that "used" was intended to include a resale. As petitioner has notshown respondent's reading to be irrational or inconsistent with the statute, it must be confirmed(see Matter of Siemens Corp. v Tax Appeals Trib., 89 NY2d 1020, 1022 [1997];Dental Socy. of State of N.Y. v New York State Tax Commn., 110 AD2d 988, 991[1985], affd 66 NY2d 939 [1985]).
Mercure, J.P., Mugglin, Lahtinen and Kane, JJ., concur. Adjudged that the determination isconfirmed, without costs, and petition dismissed.