"Fees" on utilities imposed by local governments are struck down by state courts if they are in reality taxes on utility services.

Billings, Montana tried to collect a “fee” from utilities for using public rights of way. However, the fee was 4% of gross receipts from sales of utility services. Thus, the amount had nothing to do with the use a utility made of public rights of way. The Montana supreme court held in December that this was an illegal tax rather than a “fee.” It cited a similar decision by the supreme court in Florida striking down a 3% tax on utility gross revenue that a Florida county had claimed was an “electric utility privilege fee.” Taxes must be authorized by state legislatures. The Montana case is Montana-Dakota Utilities Co. v. Billings.

Keith Martin