State Issues

Sale for Resale Exemption/Gross Receipts Tax

Generally, borough electrics purchase wholesale power from electric suppliers and then resell that power to borough retail customers. This structure allows boroughs to negotiate favorable, long-term power purchase agreements with suppliers and in turn to provide service to borough residents at favorable rates.

 

The Department of Revenue has recently concluded that Energy Power Investment Company, LLC (“EPIC”), a wholesale electric supplier to a PMEA member borough, Chambersburg, must pay Gross Receipts Tax (“GRT”) on its sales of electricity to that borough for resale and should have paid that tax all along.

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