2006 Ohio Revised Code - 5727.81. Kilowatt hour tax imposed on electric distribution company; self-assessing commercial or industrial purchaser.

§ 5727.81. Kilowatt hour tax imposed on electric distribution company; self-assessing commercial or industrial purchaser.
 

(A)  For the purpose of raising revenue for public education and state and local government operations, an excise tax is hereby levied and imposed on an electric distribution company for all electricity distributed by such company beginning with the measurement period that includes May 1, 2001, at the following rates per kilowatt hour of electricity distributed in a thirty-day period by the company through a meter of an end user in this state: 
 
  
KILOWATT HOURS
DISTRIBUTED TO                                             RATE PER
AN END USER                                                KILOWATT HOUR
         For the first 2,000                            $.00465
     For the next 2,001 to 15,000                       $.00419
         For 15,001 and above                           $.00363

 

If no meter is used to measure the kilowatt hours of electricity distributed by the company, the rates shall apply to the estimated kilowatt hours of electricity distributed to an unmetered location in this state. 
 

The electric distribution company shall base the monthly tax on the kilowatt hours of electricity distributed to an end user through the meter of the end user that is not measured for a thirty-day period by dividing the days in the measurement period into the total kilowatt hours measured during the measurement period to obtain a daily average usage. The tax shall be determined by obtaining the sum of divisions (A)(1), (2), and (3) of this section and multiplying that amount by the number of days in the measurement period: 

(1) Multiplying $0.00465 per kilowatt hour for the first sixty-seven kilowatt hours distributed using a daily average; 

(2) Multiplying $0.00419 for the next sixty-eight to five hundred kilowatt hours distributed using a daily average; 

(3) Multiplying $0.00363 for the remaining kilowatt hours distributed using a daily average. 

Until January 1, 2003, except as provided in division (C) of this section, the electric distribution company shall pay the tax to the treasurer of state in accordance with section 5727.82 of the Revised Code. Beginning January 1, 2003, except as provided in division (C) of this section, the electric distribution company shall pay the tax to the tax commissioner in accordance with section 5727.82 of the Revised Code, unless required to remit each tax payment by electronic funds transfer to the treasurer of state in accordance with section 5727.83 of the Revised Code. 

Only the distribution of electricity through a meter of an end user in this state shall be used by the electric distribution company to compute the amount or estimated amount of tax due. In the event a meter is not actually read for a measurement period, the estimated kilowatt hours distributed by an electric distribution company to bill for its distribution charges shall be used. 

(B)  Except as provided in division (C) of this section, each electric distribution company shall pay the tax imposed by this section in all of the following circumstances: 

(1) The electricity is distributed by the company through a meter of an end user in this state; 

(2) The company is distributing electricity through a meter located in another state, but the electricity is consumed in this state in the manner prescribed by the tax commissioner; 

(3) The company is distributing electricity in this state without the use of a meter, but the electricity is consumed in this state as estimated and in the manner prescribed by the tax commissioner. 

(C) (1)  As used in division (C) of this section: 

(a) "Total price of electricity" means the aggregate value in money of anything paid or transferred, or promised to be paid or transferred, to obtain electricity or electric service, including but not limited to the value paid or promised to be paid for the transmission or distribution of electricity and for transition costs as described in Chapter 4928. of the Revised Code. 

(b) "Package" means the provision or the acquisition, at a combined price, of electricity with other services or products, or any combination thereof, such as natural gas or other fuels; energy management products, software, and services; machinery and equipment acquisition; and financing agreements. 

(c) "Single location" means a facility located on contiguous property separated only by a roadway, railway, or waterway. 

(2) Division (C) of this section applies to any commercial or industrial purchaser's receipt of electricity through a meter of an end user in this state or through more than one meter at a single location in this state in a quantity that exceeds forty-five million kilowatt hours of electricity over the course of the preceding calendar year, or any commercial or industrial purchaser that will consume more than forty-five million kilowatt hours of electricity over the course of the succeeding twelve months as estimated by the tax commissioner. The tax commissioner shall make such an estimate upon the written request by an applicant for registration as a self-assessing purchaser under this division. Such a purchaser may elect to self-assess the excise tax imposed by this section at the rate of $.00075 per kilowatt hour on the first five hundred four million kilowatt hours distributed to that meter or location during the registration year, and four per cent of the total price of all electricity distributed to that meter or location. A qualified end user that receives electricity through a meter of an end user in this state or through more than one meter at a single location in this state and that consumes, over the course of the previous calendar year, more than forty-five million kilowatt hours in other than its qualifying manufacturing process, may elect to self-assess the tax as allowed by this division with respect to the electricity used in other than its qualifying manufacturing process. Until January 1, 2003, payment of the tax shall be made directly to the treasurer of state in accordance with divisions (A)(4) and (5) of section 5727.82 of the Revised Code. Beginning January 1, 2003, payment of the tax shall be made directly to the tax commissioner in accordance with divisions (A)(4) and (5) of section 5727.82 of the Revised Code, or the treasurer of state in accordance with section 5727.83 of the Revised Code. If the electric distribution company serving the self-assessing purchaser is a municipal electric utility and the purchaser is within the municipal corporation's corporate limits, payment shall be made to such municipal corporation's general fund and reports shall be filed in accordance with divisions (A)(4) and (5) of section 5727.82 of the Revised Code, except that "municipal corporation" shall be substituted for "treasurer of state" and "tax commissioner." A self-assessing purchaser that pays the excise tax as provided in this division shall not be required to pay the tax to the electric distribution company from which its electricity is distributed. If a self-assessing purchaser's receipt of electricity is not subject to the tax as measured under this division, the tax on the receipt of such electricity shall be measured and paid as provided in division (A) of this section. 

(3) In the case of the acquisition of a package, unless the elements of the package are separately stated isolating the total price of electricity from the price of the remaining elements of the package, the tax imposed under this section applies to the entire price of the package. If the elements of the package are separately stated, the tax imposed under this section applies to the total price of the electricity. 

(4) Any electric supplier that sells electricity as part of a package shall separately state to the purchaser the total price of the electricity and, upon request by the tax commissioner, the total price of each of the other elements of the package. 

(5) The tax commissioner may adopt rules relating to the computation of the total price of electricity with respect to self-assessing purchasers, which may include rules to establish the total price of electricity purchased as part of a package. 

(6) An annual application for registration as a self-assessing purchaser shall be made for each qualifying meter or location on a form prescribed by the tax commissioner. The registration year begins on the first day of May and ends on the following thirtieth day of April. Persons may apply after the first day of May for the remainder of the registration year. In the case of an applicant applying on the basis of an estimated consumption of forty-five million kilowatt hours over the course of the succeeding twelve months, the applicant shall provide such information as the tax commissioner considers to be necessary to estimate such consumption. At the time of making the application and by the first day of May of each year, excluding May 1, 2000, a self-assessing purchaser shall pay a fee of five hundred dollars to the tax commissioner, or to the treasurer of state as provided in section 5727.83 of the Revised Code, for each qualifying meter or location. The tax commissioner shall immediately pay to the treasurer of state all amounts that the tax commissioner receives under this section. The treasurer of state shall deposit such amounts into the kilowatt hour excise tax administration fund, which is hereby created in the state treasury. Money in the fund shall be used to defray the tax commissioner's cost in administering the tax owed under section 5727.81 of the Revised Code by self-assessing purchasers. After the application is approved by the tax commissioner, the registration shall remain in effect for the current registration year, or until canceled by the registrant upon written notification to the commissioner of the election to pay the tax in accordance with division (A) of this section, or until canceled by the tax commissioner for not paying the tax or fee under division (C) of this section or for not meeting the qualifications in division (C)(2) of this section. The tax commissioner shall give written notice to the electric distribution company from which electricity is delivered to a self-assessing purchaser of the purchaser's self-assessing status, and the electric distribution company is relieved of the obligation to pay the tax imposed by division (A) of this section for electricity distributed to that self-assessing purchaser until it is notified by the tax commissioner that the self-assessing purchaser's registration is canceled. Within fifteen days of notification of the canceled registration, the electric distribution company shall be responsible for payment of the tax imposed by division (A) of this section on electricity distributed to a purchaser that is no longer registered as a self-assessing purchaser. A self-assessing purchaser with a canceled registration must file a report and remit the tax imposed by division (A) of this section on all electricity it receives for any measurement period prior to the tax being reported and paid by the electric distribution company. A self-assessing purchaser whose registration is canceled by the tax commissioner is not eligible to register as a self-assessing purchaser for two years after the registration is canceled. 

(7) If the tax commissioner cancels the self-assessing registration of a purchaser registered on the basis of its estimated consumption because the purchaser does not consume at least forty-five million kilowatt hours of electricity over the course of the twelve-month period for which the estimate was made, the tax commissioner shall assess and collect from the purchaser the difference between (a) the amount of tax that would have been payable under division (A) of this section on the electricity distributed to the purchaser during that period and (b) the amount of tax paid by the purchaser on such electricity pursuant to division (C)(2)(a) of this section. The assessment shall be paid within sixty days after the tax commissioner issues it, regardless of whether the purchaser files a petition for reassessment under section 5727.89 of the Revised Code covering that period. If the purchaser does not pay the assessment within the time prescribed, the amount assessed is subject to the additional charge and the interest prescribed by divisions (B) and (C) of section 5727.82 of the Revised Code, and is subject to assessment under section 5727.89 of the Revised Code. If the purchaser is a qualified end user, division (C)(7) of this section applies only to electricity it consumes in other than its qualifying manufacturing process. 

(D)  The tax imposed by this section does not apply to the distribution of any kilowatt hours of electricity to the federal government, to an end user located at a federal facility that uses electricity for the enrichment of uranium, to a qualified regeneration meter, or to an end user for any day the end user is a qualified end user. The exemption under this division for a qualified end user only applies to the manufacturing location where the qualified end user uses more than three million kilowatt hours per day in a qualifying manufacturing process. 
 

HISTORY: 148 v S 3 (Eff 7-6-99); 148 v S 287 (Eff 12-21-2000); 149 v H 94. Eff 6-6-2001.
 

Not analogous to former RC § 5727.81 (125 v 277; 126 v 645; 127 v 283; 128 v 736; 129 v 582(960); 130 v 1330; 138 v H 145), repealed 140 v H 291, § 2, eff 12-1-83.

The effective date is set by section 206 of HB 94. 

The provisions of § 12 of SB 287 (148 v  - ) read as follows: 

SECTION 12. The Department of Taxation, in conjunction with the Public Utilities Commission, shall study the effects, fairness, and structure of the kilowatt-hour tax imposed by section 5727.81 of the Revised Code, as amended by this act, with respect to commercial and industrial purchasers of electricity. 

Not later than September 30, 2007, the Department shall issue a report of its findings to the President of the Senate, the Speaker of the House of Representatives, the majority leaders of the Senate and the House of Representatives, the minority leaders of the Senate and the House of Representatives, and the chairpersons of the standing committee of the House of Representatives and the Senate that primarily considers tax legislation. 

The provisions of §§ 14 and 15 of SB 3 (148 v  - ) read as follows: 

SECTION 14. The tax levied under section 5727.81 of the Revised Code first applies on and after May 1, 2001. Before that date, any electric distribution company shall register with the Tax Commissioner in accordance with section 5727.93 of the Revised Code, as enacted by this act. 

SECTION 15. The intent of division (C) of section 5727.81 of the Revised Code, as enacted by this act, is to craft a revenue neutral solution for all customer classes, with any margin of error being resolved in favor of residential customers.