Electricity

What Sales and Use Tax is Due?

Gross receipts derived from the sale of electricity are subject to the 7.00% combined general rate of sales and use tax.

Gross Receipts Subject to Tax

The gross receipts derived from the retail sale of electricity is the total amount or consideration for which electricity is sold. The gross receipts must be valued in money, whether paid in money or otherwise.

Charges or Fees that are Part of Gross Receipts Subject to Tax

The gross receipts include all charges for items provided in the production and delivery of electricity to customers, notwithstanding that some charges may be billed separately from the charge for the metered service.

Examples of charges included in the gross receipts include charges for the following:

  • Electric service meters 
  • Basic service to the customer, whether or not the customer uses metered service.
  • When a company first supplies electricity under any applicable metered rate schedule.
  • Construction to new customers for extending facilities to these customers including contribution in aid of construction charges.
  • Underground service to residential, commercial, and industrial customers who are served by underground facilities.
  • Installing and removing a service of a temporary nature.
  • Temporary service that are collected prior to meter installation and customer account establishment. If the amount charged to the customer is in excess of the amount due by the customer for this service, it shall be refunded to the customer, including the sales tax.
  • Providing customers additional facilities to furnish service, notwithstanding that the facilities are requested by the customers.
  • Transformers that constitute charges for additional equipment furnished as part of the electric service.
  • Area lighting service that is available to customers for the purpose of lighting private streets, private driveways, and other outdoor areas.
  • Residential subdivision street lighting services supplied in the lighting of residential dedicated public streets.
  • Reconnecting service to customers after service has been terminated for nonpayment.
  • Interconnection.
  • Repair, maintenance, installation services.

Charges or Fees that are Not Part of Gross Receipts Subject to Tax

The following are charges or fees that are not part of the gross receipts subject to tax:

  • Charges to customers for supplying information through energy or time pulses if the customer already has the facilities for electric service in place.
  • Demand profile charges or pulse data charges for demand information as requested by a customer.
  • Energy audit amounts charged to customers for a comprehensive energy audit provided by a utility.
  • Late payment charges billed on a balance that was not paid on the previous month's bill.
  • Charges related to electronic fund transfers or checks for payment of an account that are returned by the bank because of insufficient funds.
  • Home energy loan amounts that represent the amount due under the Home Energy Loan Program and late payment charges for an amount due under the loan program that are not paid in accordance with the loan agreement.
  • Security deposit interest paid to customers on deposits.

How to File and Pay?

Gross receipts derived from sales of electricity and the 7.00% combined general rate of sales and use tax thereon are to be reported to the Department on Form E-500E, Combined General Rate Sales and Use Tax Return.

File and Pay Now

How Do I Find More Resources?

Off