Use taxes on electricity look more and more likely as states look for ways to make up for loss of other tax revenue from deregulation

Use taxes on electricity look more and more likely as states look for ways to make up for loss of other tax revenue from deregulation

November 01, 1998 | By Keith Martin in Washington, DC

Use taxes on electricity look more and more likely as states look for ways to make up for loss of other tax revenue from deregulation.

The idea of imposing use taxes is often part of a plan to cut property taxes on regulated utilities and put them on an equal footing with independent generators. A Minnesota study last summer found that property taxes on just two utilities in 1995 would have dropped from $222 million to $35 million if utility property was assessed the same as other taxpayers. Ohio utilities proposed at the end of August to cut utility property taxes but make up the revenue by imposing an electricity use tax on a cents-per-kWh basis. The tax would be paid by consumers, but be collected by electric distribution companies.