Your PUD News Release

PUD joins others in taking legal steps to collect state tax refund

Chelan County PUD
News Release
8/3/2010

Chelan County PUD commissioners voted Tuesday to authorize legal action against the Washington State Department of Revenue to get a refund of about $168,000 in taxes erroneously collected from PUD customers in 2008-2009.

As explained to commissioners by General Counsel Carol Wardell, the privilege taxes were collected by the state on basic service charges that are part of PUD bills along with the charges for kilowatt-hour power use. Sixty percent of the taxes paid by the PUD were distributed to Chelan County and the cities in the county.

A state Appeals Court ruled last December that the state was not entitled to apply the privilege tax collection to the basic service charges, setting the stage for refunds. The state, however, said it will not issue refunds without being sued by the affected agencies. The state Legislature took action in 2010 to change the state law and allow the state to collect the privilege tax on basic charges from now on.

Wardell recommended the PUD join with Grant County PUD in suing the state to save on legal fees. The two PUDs will be hiring the same legal firm that represented Clark PUD and Grays Harbor PUD in their initial successful lawsuit against the Department of Revenue. Legal costs are expected to be between $10,000 to $20,000 for Chelan PUD and would increase if the state raises defenses.

Based upon a prior settlement, it is expected that the refund would be applied as a credit against future tax collections, Wardell explained.

PUD commissioners voiced frustration that the state was requiring costly legal action by the PUDs before granting refunds. Commissioner Norm Gutzwiler said the PUD was showing due diligence by taking action on behalf of customers.

Grant PUD authorized similar legal action last week.

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The next regular commission meeting is at 1 p.m. on Monday, Aug. 9, in the PUD boardroom at 327 N. Wenatchee Ave. Most PUD commission meetings are recorded, and a link to the audio is available on the PUD’s home page at www.chelanpud.org.

Steve Lachowicz
Communications director
509-661-4639, direct line
509-679-0148, cell
steve.lachowicz@chelanpud.org