State tax law changes will affect your cooperative

State tax law changes will affect your cooperative

Changes in state tax law enacted by the General Assembly and Gov. Pat McCrory last summer will affect taxes paid by your electric cooperative beginning July 1.

Currently, electric cooperatives pay the state a "franchise tax" of 3.22% on their electricity sales. Because co-ops consider the franchise tax a cost of doing business, it is incorporated into your electric bill even though there is not a specific line item for it. What does appear on your power bill as a line item is the 3% state sales tax.

The new tax legislation eliminates the franchise tax on electric utilities, including co-ops, and raises to 7% the sales tax on electricity, effective July 1. Co-ops may make the adjustment in different ways, but in most cases an average monthly electric bill of $100 is expected to see a net increase of less than $1.

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