58.1-400.3 - Minimum tax on certain electric suppliers.
§ 58.1-400.3. Minimum tax on certain electric suppliers.
A. 1. An electric supplier, except for those organized as cooperatives andexempt from federal taxation under § 501 of the Internal Revenue Code of1986, as amended, shall be subject to a minimum tax imposed by this section,instead of the corporate income tax imposed by § 58.1-400 if applicable, netof any income tax credits that may be used to offset such tax, if the taximposed by § 58.1-400 is less than the minimum tax imposed by thissubsection. An electric supplier that is organized as a limited liability,partnership, corporation that has made an election under subchapter S of theInternal Revenue Code, or other entity treated as a pass-through entity shallbe subject to the minimum tax in the manner prescribed by regulation.
2. The minimum tax imposed by this subsection shall be equal to 1.45 percentof such electric supplier's gross receipts for the calendar year that endsduring the taxable year minus the state's portion of the electric utilityconsumption tax billed to consumers.
B. 1. An electric supplier that is organized as a cooperative and exempt fromfederal taxation under § 501 of the Internal Revenue Code of 1986, asamended, shall be subject to a minimum tax, instead of the tax on modifiednet income imposed by § 58.1-400.2, if the tax imposed by § 58.1-400.2, netof any credits that may be used to offset such tax, is less than the minimumtax imposed by this subsection.
2. The minimum tax imposed by this subsection shall be equal to 1.45 percentof such electric supplier's gross receipts from sales to nonmembers for thecalendar year that ends during the taxable year minus the consumption taxcollected from nonmembers.
C. In the case of an income tax return for a period of less than 12 months,the minimum tax shall be based on the gross receipts for the calendar yearthat ends during the taxable period or, if none, the most recent calendaryear that ended before the taxable period. The minimum tax shall be proratedby the number of months in the taxable period.
D. The State Corporation Commission shall calculate and certify to theDepartment for each tax year as defined in § 58.1-2600 the name, address, andminimum tax for each electric supplier. The Commission shall mail orotherwise deliver a copy of the certification to each affected electricsupplier.
E. When an electric supplier subject to the tax imposed by this section isone of several affiliated corporations that file a consolidated or combinedincome tax return, the portion of the affiliated corporations' tax liabilitythat is attributable to the electric supplier shall be computed as follows:
1. Each corporation included in the consolidated or combined return shallrecompute its corporate income tax liability, net of any income tax credits,as if it were filing a separate return. The separate income tax liability ofthe electric supplier shall then be compared to the affiliated corporations'tax liability, net of any income tax credits, indicated on the consolidatedor combined return. For purposes of this section, the lesser amount shall bedeemed to be the corporate income tax imposed by § 58.1-400 and attributableto the electric supplier.
2. a. If such corporate income tax amount is less than the minimum tax of theelectric supplier as calculated pursuant to subsection A, the electricsupplier shall be subject to the minimum tax in lieu of the corporate incometax imposed by § 58.1-400.
b. If such corporate income tax amount exceeds the minimum tax of theelectric supplier as calculated pursuant to subsection A, the electricsupplier shall not owe the minimum tax.
F. The requirements imposed under Article 20 (§ 58.1-500 et seq.) of Chapter3 of this title regarding the filing of a declaration of estimated incometaxes and the payment of such estimated taxes, shall be applicable toelectric suppliers regardless of whether such taxpayer expects to be subjectto the minimum tax imposed herein or to the corporate income tax imposed by §58.1-400.
For purposes of determining the applicability of the exceptions under whichthe addition to the tax for the underpayment of any installment of estimatedtaxes shall not be imposed, it shall be irrelevant whether the tax shown onthe return for the preceding taxable year is the corporate income tax or theminimum tax.
G. To the extent that a taxpayer is subject to the minimum tax imposed underthis section, there shall be allowed a credit against the separate, combined,or consolidated corporate income tax for the total amount of minimum tax paidby the electric supplier in all previous years that is in excess of the taximposed by § 58.1-400 on the electric supplier for such years.
H. 1. To the extent an electric supplier or its parent company has remittedestimated income tax payments in excess of its corporate income tax liabilityfor the taxable years beginning on or after January 1, 2001, but beforeJanuary 1, 2004, such overpayments shall only be utilized to offset anycorporate income tax liabilities incurred pursuant to § 58.1-400 for taxableyears beginning on and after January 1, 2004, and shall not be claimed as arefund of overpaid taxes, except as provided in subdivision 2 of thissubsection. For the purposes of this subsection, estimated income taxpayments shall include any overpayments from a prior taxable year carriedforward as an estimated payment to be credited towards a future tax liability.
2. If an electric supplier has had a corporate income tax liability ofgreater than $0 for each taxable year beginning on or after January 1, 2001,but before January 1, 2003, then such electric supplier may claim a refund ofany estimated income tax payments in excess of their taxable year 2003corporate income tax liability.
I. Every electric supplier which owes the minimum tax imposed by this sectionshall remit such tax payment to the Department of Taxation.
J. Notwithstanding any of the foregoing provisions, an electric supplier maynot adjust capped rates pursuant to § 56-582 of the Code of Virginia on anyportion of the minimum tax due to the Commonwealth.
K. The following words and terms, for purposes of this section, shall havethe following meanings:
"Consumption tax" means the state's portion of the electric utilityconsumption tax billed pursuant to Chapter 29 (§ 58.1-2900 et seq.) of thistitle, for which the electric supplier is defined as the "service provider"pursuant to § 58.1-2901 less any amounts billed on behalf of utilities ownedand operated by municipalities.
"Electric supplier" means an incumbent electric utility in the Commonwealththat, prior to July 1, 1999, supplied electric energy to retail customerslocated in an exclusive service territory established by the StateCorporation Commission.
"Gross receipts" has the same meaning as defined in § 58.1-2600 lessreceipts from sales to federal, state and local governments for their own use.
"Nonmember" has the same meaning as defined in § 58.1-400.2.
(2004, c. 716; 2009, cc. 37, 152.)