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House Co-Sponsorship Memoranda
House of Representatives
Session of 2019 - 2020
Regular Session
MEMORANDUM
| Posted: | September 19, 2019 05:13 PM |
|---|---|
| From: | Representative Rob W. Kauffman |
| To: | All House members |
| Subject: | Clarification of GRT Exemption for Municipal Electric Companies |
| In the near future, I plan to introduce legislation that will amend the Borough Code to state unequivocally that all electric energy supplied to borough electric systems for sale within the borough limits is exempt from the imposition of Pennsylvania’s Gross Receipts Tax (GRT). Under Pennsylvania’s Tax Code, electric energy supplied to borough electric systems for resale within borough limits has long been recognized as exempt from Pennsylvania’s GRT. This principal is enshrined in the Tax Code and is a position that the Department of Revenue has affirmatively acknowledged and has historically applied. Indeed, boroughs that purchase wholesale power pursuant to long-term power purchase agreements have relied upon this exemption and have designed those power purchase agreements based upon the understanding that GRT does not apply to the transaction. Recently, the Department of Revenue has revised its position and is choosing to ignore the existing law. It is attempting to assess GRT on wholesale suppliers that sell electric energy to borough electric systems for resale to borough customers. Revenue’s interpretation of the law and renewed efforts to assess GRT in this manner are contrary to Pennsylvania law. Borough electric systems, their ratepayers, and borough taxpayers now face the prospect of carrying the substantial burden of paying for costs associated with Revenue assessing this tax. My legislation will clarify any uncertainty that may exist with respect to the non-application of GRT to sales by wholesale electric suppliers to borough electric systems for resale. The Borough Code will be amended to definitively state that the GRT exemption applies to the sale of electric energy to borough electric systems for resale. Please join me in cosponsoring this legislation. Thank you. |