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PA Bulletin, Doc. No. 01-1783


Revenue-Neutral Reconciliation Rate Notice for the Tax Year Beginning January 1, 2002

[31 Pa.B. 5507]

   Title 66 Pa.C.S. § 2810(a) 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.''

   Title 66 Pa.C.S. § 2810(c) 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).

   The result of the revenue-neutral reconciliation calculation provided in 66 Pa.C.S. § 2810 is +0.016 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 0.060 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 72 P. S. § 8101(a).


[Pa.B. Doc. No. 01-1783. Filed for public inspection September 28, 2001, 9:00 a.m.]

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