Schenectady, NY Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Tax rate
- 1% of gross or gross operating income
- Minimum threshold
- $500 gross income in prior 12 months
- Filing deadlines
- Sept. 25, Dec. 25, Mar. 25, June 25
- Late penalty
- 5% plus 1% per month of delay
- Collecting officer
- Director of Finance
- Can't pass through
- May not be billed separately to customers
Summary
Schenectady imposes a 1% gross income tax on public utilities doing business in the city under City Code § 234-5, provided the utility's gross income for the preceding 12 months tops $500. The tax reaches only activity within city limits and comes on top of every other tax or fee the utility already owes.
Pursuant to the authority granted by § 20-b of the General City Law of the State of New York, a tax equal to 1% of its gross income from and after July 1, 1937, is hereby imposed upon every utility doing business in the City of Schenectady which is subject to the supervision of the State Department of Public Service which has a gross income for the 12 months ending May 31 in excess of $500 ... Such taxes shall not be imposed on any transaction originating or consummating outside the territorial limits of the City of Schenectady, notwithstanding that some act be necessarily performed with respect to such transaction within such limits.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: rev 4990798; v11 updated 2026-04-13; through 04-13-2026).
Full Breakdown
Chapter 234, Article IV of the City Code taxes utilities as a distinct business classification separate from the city's general commercial tax base. Section 234-5 levies a tax equal to 1% of gross income on any utility supervised by the State Department of Public Service whose gross income for the 12 months ending May 31 exceeds $500, and a matching 1% tax on gross operating income for other utilities meeting the same $500 threshold. The tax reaches only transactions completed within Schenectady's territorial limits; anything originating or finishing outside the city is excluded even if some part of the deal touches the city.
Section 234-6 defines "utility" broadly: any person under State Public Service Department supervision, plus anyone who sells or delivers gas, electricity, steam, water, refrigeration, telephone or telegraph service through mains, pipes or wires, whether or not that is their main business. "Gross income" sweeps in receipts from sales, services, securities profits, real estate profits, interest, dividends and royalties sourced in the city, computed without deducting any cost of doing business. Taxed utilities must file quarterly returns with the Director of Finance by September 25, December 25, March 25 and June 25 (§ 234-8), though a utility averaging under $1,500 per quarter may file annually instead. The tax is due when the return is filed (§ 234-9), and the utility, not its customers, must absorb it: § 234-14 bars passing the tax through as a separate line item on customer bills. Revenue collected goes into a dedicated account used for unemployment relief within the city (§ 234-18).
Violations & Fines
Failing to file a return, a corrected return, or to pay the tax on time draws a penalty of 5% of the tax due plus 1% for every month of delay after the first (§ 234-12), though the Director of Finance may waive the penalty if the delay was excusable. If a utility never files, the Director can estimate the tax owed from outside sources, and the Corporation Counsel can sue to collect and enforce the resulting lien on the utility's property (§§ 234-10, 234-15).
Frequently Asked Questions
Does Schenectady tax utility companies differently from other businesses?
Which utilities owe Schenectady's 1% gross income tax?
How often do utilities file returns for this tax?
Sources & Official References
Other rules in Schenectady
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