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PA Bulletin, Doc. No. 01-2144

NOTICES

DEPARTMENT OF REVENUE

Revised Revenue-Neutral Reconciliation Rate Notice

[31 Pa.B. 6586]

   Section 2810(a) of 66 Pa.C.S. provides ''It is the intention of the General Assembly that the restructuring of the electric industry be accomplished in a manner that allows Pennsylvania to enjoy the benefits of competition, promotes the competitiveness of Pennsylvania's electric utilities and maintains revenue neutrality to the Commonwealth. This section is not intended to cause a shift in proportional tax obligations among customer classes or individual electric distribution companies. It is the intention of the General Assembly to establish this revenue replacement at a level necessary to recoup losses that may result from the restructuring of the electric industry and the transition thereto.''

   Section 2810(c) of 66 Pa.C.S. requires the Secretary of Revenue to publish the rate of the revenue-neutral reconciliation (RNR) tax in the form of a notice in the Pennsylvania Bulletin by December 1, 1998, and each October 1 thereafter until and including October 1, 2002. The tax rate established in 66 Pa.C.S. § 2810(c) shall be imposed upon gross receipts as provided in 66 Pa.C.S. § 2810(b) for the period beginning the next January 1. In the event the RNR tax rate is negative, a credit is provided under 66 Pa.C.S. § 2810(c)(5). This credit is available only to a taxpayer upon which tax is imposed under 66 Pa.C.S. § 2810(b).

   This notice is a revision of the original RNR tax rate calculation for tax year 2002 of +0.016 that was published at 31 Pa.B. 5507 (September 29, 2001). The revision was necessary for two reasons. First, the Pennsylvania Public Utility Commission submitted revised electric industry gross receipts data for calendar year 2000 to the Department of Revenue (Department) on November 8, 2001. Second, electric industry officials submitted additional information to the Department for consideration in calculating the RNR after the original publication of the RNR rate. Based on the industry information, the Department identified additional tax payments that should be included in the RNR calculation.

   Based on the Department's revised calculation, the result of the RNR calculation provided in 66 Pa.C.S. § 2810 is +0.015 for tax periods beginning on or after January 1, 2002. Therefore, the combined utility gross receipts tax rate for electric distribution companies and electric generation suppliers is effectively 0.059 for tax periods beginning on or after January 1, 2002, rather than 0.044.

   The utility gross receipts tax rate, however, remains 0.050 for all gross receipts taxable under section 1101(a) of the TRC (72 P. S. § 8101(a)).

LARRY P. WILLIAMS,   
Secretary

[Pa.B. Doc. No. 01-2144. Filed for public inspection November 30, 2001, 9:00 a.m.]


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