Replacing Property Taxes on Utility Generation with Revenues from a Carbon-Based Tax: a Minnesota Tax Shift Opportunity I
Memo: To: Michael Noble, ME3 From: John Bailey, David Morris, ILSR (Tel: 612-379-3815) Date: 11/15/98 Re: Replacing Property Taxes on Utility Generation With Revenues from a Carbon-Based Tax: A Minnesota Tax Shift Opportunity I. Introduction Electric utilities in Minnesota pay four types of taxes: income tax, franchise fee (or gross receipts tax), sales tax, property tax.1 The total amount paid in each category is shown in Table 1. In 1995, the total came to $375 million. Table 1. Electric Utility Tax Paid in Minnesota in 1995 Property Tax MN Sales Tax MN Income Tax Franchise Fee Total NSP $152,078,365 $65,076,000 $31,709,000 $25,505,000 $274,368,365 Minnesota Power $34,706,493 $5,963,664 $3,843,817 $700,000 $45,213,974 Otter Tail $7,152,715 $4,197,450 $1,370,067 $233,643 $12,953,875 Interstate $3,670,381 $1,935,124 $573,770 $569,969 $6,749,244 Anoka Elec. Coop $3,179,055 $4,658,862 $0 $534,379 $8,372,296 Dakota Elec. Assoc. $4,742,500 $4,487,719 $0 $144,025 $9,374,244 Cooperative Power $7,095,000 $0 $0 $0 $7,095,000 United Power Assoc. $10,827,954 $0 $5,000 $0 $10,832,954 Total $223,452,463 $86,318,819 $37,501,654 $27,687,016 $374,959,952 Source: Minnesota Department of Public Service, 1996 Energy Policy and Conservation Report, December 1996 Recently, Minnesota has re-examined the utility tax structure in light of the restructuring of electricity occurring throughout the country.
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