Puget Sound Energy v. City of Bellingham – Utility Taxes

In Puget Sound Energy v. City of Bellingham, Division I of the Court of Appeals affirmed the City’s tax assessment and penalties against PSE for unpaid utility tax.  Prior to the assessment, PSE paid city B&O tax on revenue generated by “non-utility” activities, such as billing initiation charges, connection and reconnection charges, disconnection visit charges, and late payment fees.   PSE paid city utility taxes only on the revenue it received from both the “per kilowatt hour energy charges” and the “basic or customer charges” paid by its Bellingham customers.  Reasoning that that “the business” of selling or furnishing light and power is not limited to the actual provision of electricity under Bellingham’s utility tax ordinance, the Court upheld the assessment.

The full opinion is available here.

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