Duke Energy, Ohio Department of Taxation Reach Short-Term Deal to Lessen Impact of Tax Dispute during Appeal July 14, 2010
CINCINNATI, OHIO -
Duke Energy Ohio and the Ohio Department of Taxation reached an agreement today that will minimize the short-term community impact of a tax dispute. At issue is the method of assessing Duke Energy Ohio’s tangible personal property tax value for tax year 2009.
Last month, the company began notifying local leaders it planned to pay upcoming tax bills based on its own analysis, as permitted by Ohio law, while it appeals the state's initial assessment of the company’s personal property value. In recent days, officials at the Ohio Department of Taxation and Duke Energy have discussed the impact this decision would have on schools and local governments. The state and the company also have reiterated their mutual interest in trying to expeditiously move this dispute through the appeal process.
As a compromise and in a show of good faith by Duke Energy and the Department of Taxation, Duke Energy has agreed to cut by half the amount it previously planned to withhold. Under this agreement, Duke Energy will voluntarily pay 90 percent of the full-year 2009 tax assessment, inclusive of the initial payments made by Duke Energy, while the appeals process continues. In consideration of this payment from Duke Energy, the Ohio Department of Taxation has agreed to briefly extend the date for an administrative hearing on the company's petition for a reassessment.
"Duke Energy and the Ohio Department of Taxation clearly have differing opinions on the value of our personal property, and that’s an issue that the appeal process will resolve," said Julie S. Janson, president of Duke Energy Ohio and Duke Energy Kentucky. "This compromise gives everyone some breathing room as we work through the appeal process."
Tangible personal property tax is assessed annually for utilities in Ohio, with payments due in two installments the following calendar year. Tangible personal property includes equipment, poles, wires and machinery, but not "real" property such as buildings and land.
Duke Energy paid the first-half payment for the 2009 tax year in full based on the state’s assessment. The second-half payment is due this summer, and that is what prompted the company to take action by reducing its payment on the disputed amount. If it is determined that the value of the personal property is lower than the assessment, communities would owe Duke Energy a refund on what the company overpaid, plus interest. If that is the case, Duke Energy will work with communities to develop a payment schedule that best suits the needs of the parties. For answers to questions about the agreement, please see our FAQ page.
Duke Energy Ohio’s operations provide electricity to approximately 685,000 customers and natural gas service to approximately 400,000 customers.
Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 4 million customers located in five states in the Southeast and Midwest, representing a population of approximately 11 million people. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: http://www.duke-energy.com/. To learn more and contribute to the discussion about the energy issues of today and the possibilities of tomorrow see http://www.sheddingalight.org/.