Central Clarifies State Tax Law Changes for Members
January 6th, 2014
By Heather Vaughan
Sanford, N.C., January 6, 2014 –As many of you know new tax legislation on the horizon will increase sales tax on electricity seven percent January 1 to investor owned utilities. This will not happen at Central Electric until July 1, 2014, because we are a not –for-profit cooperative. Central EMC hopes to eliminate as much confusion as possible regarding the change.
Currently, all power providers give the state of North Carolina a Gross Receipts Franchise Itemized energy sales tax of electricity sales, which is a little over three percent; this unseen tax is embedded in the rates charge for energy use. Co-op members also pay three percent, which is instantly handed over to the state.
The new measure, effective this summer, will omit the need for Gross Receipts and simply raise the sales tax on power. With the elimination of the previous measure, the general rate of seven percent will fall on the consumer. This will continuously be itemized on bills as a NC state tax. Central Electric will be responsible by law to collect and remit the payment to the state.
While we hope this release clears up any uncertainties, the November issue of Carolina Country may also help co-op members understand what lies ahead. Here is a link to the article:
**Members will also see various articles regarding the updates in upcoming monthly newsletters. **