61 Pa. Code § 60.23 - Electric utility services
(a)
General. Chapter 28 of 66 Pa.C.S. (relating to The Electricity
Generation Customers Choice and Competition Act) (act) became effective on
January 1, 1997. The act includes two major changes. First, section 2804 of the
act (relating to standards for restructuring of electric industry) gives the
retail customer the choice of an electric generation supplier. Second, section
2804 of the act gives the Pennsylvania Public Utility Commission the authority
to require the unbundling of electric utility services, tariffs and customer
bills to separate the charges for generation, transmission and distribution.
This statement of policy sets forth the policy of the Department in taxing
unbundled charges relating to the sale to or use of electricity by
nonresidential users under Article II of the TRC (72 P. S. §§
7201-7281.2).
(b)
Article II of the TRC.
(1) The TRC became effective on March 4,
1971. Article II of the TRC imposes Sales and Use Tax upon certain tangible
personal property and selected services.
(i)
Section 201(m) of the TRC (72 P. S. §
7201(m)) defines tangible
personal property to include "electricity for nonresidential use."
(ii) Section 202 of the TRC (72 P. S. §
7202) imposes Sales or Use Tax upon the
"purchase price" of each "sale at retail" or "purchase at retail" of tangible
personal property within this Commonwealth.
(iii) The term "sale at retail" is defined in
section 201(k) of the TRC as any transfer for a consideration, of the
ownership, custody or possession of tangible personal property.
(iv) The term "purchase at retail," is
defined in section 201(f) of the TRC as the acquisition for a consideration of
the ownership, custody or possession of tangible personal property when the
acquisition is made for the purpose of consumption or use.
(v) Section 201(g) of the TRC defines
"purchase price" as the total value of anything paid or delivered or promised
to be paid or delivered in the complete performance of a "sale at retail" or a
"purchase at retail."
(2)
Since the enactment of the TRC, the bundled charges for the generation,
transmission and distribution of "electricity for nonresidential use," together
with other charges representing reimbursements to the seller for taxes, fuel
adjustment costs and similar charges, have been subject to
tax.
(c)
Revenue-neutral reconciliation. Section 2810 of the act
(relating to revenue-neutral reconciliation) provides: "It is the intention of
the General Assembly that the restructuring of the electric industry be
accomplished in a manner that allows Pennsylvania to enjoy the benefits of
competition, promotes the competitiveness of Pennsylvania's electric utilities
and maintains revenue neutrality to the Commonwealth." In maintaining revenue
neutrality, section 2810 of the act further provides that it is the intention
of the General Assembly not "to cause a shift in proportional tax obligations
among customer classes or individual electric distribution companies" but "to
establish this revenue replacement at a level necessary to recoup losses that
may result from the restructuring of the electric industry and the transition
thereto." Among the taxes to which the General Assembly makes reference are the
sales and use taxes collected under Article II of the TRC. To maintain revenue
neutrality, both bundled and unbundled charges relating to the sale or use of
"electricity for nonresidential use" will continue to be subject to Sales and
Use Tax under Article II of the TRC to the same extent as receipts from bundled
charges for "electricity for nonresidential use" were taxable during the Fiscal
Year 1995-1996.
(d)
Taxability of unbundled charges. To fulfill its
responsibilities under Article II of the TRC, as well as, the recognition of
the intention of the General Assembly, as provided under the act, the
Department is required to impose Sales and Use Tax upon the total purchase
price charged upon each separate charge for the generation, transmission or
distribution in connection with providing nonresidential electric utility
services as well as all related charges, services or costs for the generation,
production, transmission or distribution of electricity whether or not the
total amount charged is billed as a single charge by one vendor or billed
separately by one or more vendors.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.