Saying they are trying to keep electric rates low, South Dakota's rural electric co-ops are seeking to limit the growth of taxes they pay to schools. For decades, co-ops have paid tax on gross receipts from electricity sales in lieu of property taxes. Now they want the legislature to levy a tax per kilowatt hour sold, reports Bob Mercer of the Aberdeen News. The change would cut the growth in the co-ops' tax payments to an estimated 3.7 percent annually, compared to 6.7 percent without it.
Ed Anderson, executive director of the South Dakota Rural Electric Association, said changes are required because of new Environmental Protection Agency regulations which have forced two power plants that supply co-ops to retrofit at costs of $750 to $800 million. The costs become part of the rate base, and the basis for the gross-receipts tax. Lobbyists for the state's schools testified that schools are already "under financial strain" and can't afford to lose any revenue, but the committee voted 6-1 to send the bill to the full Senate. (Read more)
Ed Anderson, executive director of the South Dakota Rural Electric Association, said changes are required because of new Environmental Protection Agency regulations which have forced two power plants that supply co-ops to retrofit at costs of $750 to $800 million. The costs become part of the rate base, and the basis for the gross-receipts tax. Lobbyists for the state's schools testified that schools are already "under financial strain" and can't afford to lose any revenue, but the committee voted 6-1 to send the bill to the full Senate. (Read more)
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