A market participant's transactions in the New York Independent System Operator (NYISO) virtual electric market are not sales of electricity or electric service subject to sales tax. Virtual bids are separate from bids for the physical purchase and sale of electricity in the NYISO physical markets. The taxpayer does not purchase or sell any taxable items or services when the taxpayer merely buys or sells in a NYISO virtual transaction. In addition, when the taxpayer acts solely as a participant in the NYISO virtual market, the taxpayer is not a vendor and is not required to register as a vendor for sales tax purposes.
TSB-A-07(20)S, New York Commissioner of Taxation and Finance, July 26, 2007.