State tax law changes will affect your cooperative beginning July 1, 2014
Changes in state tax law enacted by the General Assembly and Gov. Pat McCrory in July will affect taxes paid by families, individuals and businesses, including your electric cooperative.
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 increases the sales tax on electricity to 7%, effective July 1, 2014. For homeowners with an average monthly bill of $100, the net increase in their bill attributable to the tax law changes is expected to be less than $1.
The new tax legislation also eliminated the “state tax holiday” on buying efficient Energy Star-labeled appliances, effective in 2014.
For specific information on the 2013 state tax law and its impact on you or your business, consult a tax professional.