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1999 SESSION

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SB 1286 Taxation of electric utilities.

Introduced by: John C. Watkins | all patrons    ...    notes | add to my profiles | history

SUMMARY AS ENACTED WITH GOVERNOR'S RECOMMENDATION:

Taxation of electric utilities. Eliminates the state gross receipts tax, the State Corporation Commission special assessment tax, and the local gross receipts tax on electric suppliers. In place of these taxes, consumers of electricity will pay a declining block consumption tax and corporations will be subject to corporate income tax. The consumption tax, which contains components for a state gross receipts tax, SCC regulatory tax, and local consumption tax, will be levied at rates of (i) $0.00155 for the first 2,500 kWh consumed; (ii) $0.00099 for between 2,500 and 50,000 kWh; and (iii) $0.00075 for power consumed in excess of 50,000 kWh. These combined rates may be reduced to reflect lower SCC regulatory charges and to omit the local tax component in localities served by municipal-owned electric utilities that opt not to assess the local tax. In addition, most electric suppliers will pay a net corporate income tax. Electric cooperatives are not subject to the corporate income tax except to the extent sales are made to nonmember customers. Electric suppliers will report real and personal property to the State Corporation Commission, which will centrally assess their property. These changes are in anticipation of federal deregulation of the electric utility industry. The effective date of the legislation is January 1, 2001.

SUMMARY AS PASSED:

Taxation of electric utilities. Eliminates the state gross receipts tax, the State Corporation Commission special assessment tax, and the local gross receipts tax on electric suppliers. In place of these taxes, consumers of electricity will pay a declining block consumption tax and corporations will be subject to corporate income tax. The consumption tax, which contains components for a state gross receipts tax, SCC regulatory tax, and local consumption tax, will be levied at rates of (i) $0.00155 for the first 2,500 kWh consumed; (ii) $0.00099 for between 2,500 and 50,000 kWh; and (iii) $0.00075 for power consumed in excess of 50,000 kWh. These combined rates may be reduced to reflect lower SCC regulatory charges and to omit the local tax component in localities served by municipal-owned electric utilities that opt not to assess the local tax. In addition, most electric suppliers will pay a net corporate income tax. Electric cooperatives are not subject to the corporate income tax except to the extent sales are made to nonmember customers. Electric suppliers will report real and personal property to the State Corporation Commission, which will centrally assess their property. These changes are in anticipation of federal deregulation of the electric utility industry. The effective date of the legislation is January 1, 2001.

SUMMARY AS PASSED SENATE:

Taxation of electric utilities. Eliminates the state gross receipts tax, the State Corporation Commission special assessment tax, and the local gross receipts tax on electric suppliers. In place of these taxes, consumers of electricity will pay a declining block consumption tax. The consumption tax , which contains components for a state tax, SCC regulatory tax, and local consumption tax, will be levied at rates of (i) $0.00155 for the first 2,500 kWh consumed; (ii) $0.00099 for between 2,500 and 50,000 kWh; and (iii) $0.00075 for power consumed in excess of 50,000 kWh. These combined rates may be reduced to reflect lower SCC regulatory charges and to omit the local tax component in localities served by municipal-owned electric utilities that opt not to assess the local tax. In addition, most electric suppliers will pay a net corporate income tax. Electric suppliers operating on a cooperative basis are not subject to the corporate income tax except to the extent sales are made to nonmember customers. Electric suppliers will report real and personal property to the State Corporation Commission, which will centrally assess their property. These changes are in anticipation of federal deregulation of the electric utility industry.

SUMMARY AS INTRODUCED:

Taxation of electric utilities. Eliminates electric suppliers from paying the state gross receipts tax, the State Corporation Commission special assessment tax, and the local gross receipts tax. In place of these taxes, a declining block consumption tax paid by residential, commercial, and industrial users of electric power and a net corporate income tax paid by most electric suppliers will be imposed. Electric suppliers operating on a cooperative basis are not subject to the corporate income tax except to the extent sales are made to nonmember customers. Provides that electric suppliers will no longer report real and personal property to the State Corporation Commission and will no longer be centrally assessed and will not be subject to special regulatory tax. These changes are in anticipation of federal deregulation of the electric utility industry. The declining block consumption tax paid by residential, commercial, and industrial users of electric power will be at rates ranging from $0.00161/kWh for up to 2,500 kWh used per month to $0.000079/kWh for more than 50,001 kWh per month.