Gov. Tom Wolf recently signed a bill clarifying the existing tax code for borough electric systems into law.
Act 28 of 2020 stipulates power supplied to borough electric systems for sale within borough limits will continue to be exempt from the state’s Gross Receipts Tax. In the past, the tax has not been applied, but the Department of Revenue recently interpreted the law differently and had begun taxing borough electric systems.
“Government overreach is unfortunate, especially when a flawed interpretation like this can impact so many communities across Pennsylvania,” state Sen. Doug Mastriano (R-Adams County), who introduced Senate Bill 958, said. “My measure resolves any uncertainties and ambiguities that may exist with the applicability of this tax, in boroughs that have these types of electric systems.”
Senate Bill 958 was advanced unanimously through the Senate Local Government and Appropriations committees.
Language from the bill was amended into House Bill 1036, and it was this version of the bill that was signed into law.
The House bill was introduced by state Rep. Dan Moul (R-Adams County).
The PA Municipal Electric Association, the PA State Association of Boroughs, and the PA Municipal League endorsed the bill.
There are 35 borough electric systems statewide.