The Pennsylvania Revenue Department will not have to whack the state’s traditional utilities with a tax surcharge as called for under a special revenue neutral provision in the 1996 state law that brought about electric competition.
Recent sales of power plants by the incumbent utilities dramatically increased their income, and so, as it goes anywhere, their income taxes. The higher income tax collections, nearly double what they were five years ago, make up for the shortfall in the state’s Capital Stock & Franchise Tax and the real estate tax (PURTA), which have dropped off as the value of electric plants has fallen since the advent of competition in 1997.
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