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MAY 12, 2008

Public Utility Tax Credits for “Billing Discounts”

and “Qualifying Contributions”

This is our annual update on the Low Income Home Energy Assistance Program (LIHEAP) including

the Public Utility Tax Credit Application for July 1, 2008 to June 30, 2009.

The Department of Community, Trade and Economic Development (CTED) administers LIHEAP in

cooperation with light and power businesses and gas distribution businesses. Under this program,

CTED administers funds from various sources to reduce energy costs for low income persons. CTED,

or organizations that contract with CTED, distributes these funds in the form of grants to light and

power businesses and gas distribution businesses based on need. Many light and power businesses

and gas distribution businesses also provide billing discounts for low income customers.

To encourage billing discounts and contributions, RCW 82.16.0497 allows a limited credit against the

public utility tax for billing discounts and qualifying contributions made by light and power businesses

or gas distribution businesses.

Billing discounts are actual reductions in the amount charged for providing service to qualifying

persons in Washington. A qualifying person is a Washington resident who applies and qualiﬁ es for

LIHEAP assistance regardless if that person actually receives assistance.

Billing discounts do not include service charge reductions made using grants received from the LI-

HEAP, either from CTED or an organization that contracts with CTED, to administer LIHEAP funds.

Qualifying contributions are amounts given by light and power businesses or gas distribution busi-

nesses to an organization that contracts with CTED to administer LIHEAP funds.

Qualifying contributions do not include amounts received in the prior ﬁ scal year from the business’s

customers for the purpose of assisting other customers.

Eligibility

To be eligible for the credit using billing discounts or qualifying contributions, the business must give

billing discounts or qualifying contributions greater than 125 percent of those given by the business in

the state ﬁ scal year 2000 (July 1, 1999 - June 30, 2000), respectively. If no billing discounts or quali-

fying contributions were given in state ﬁ scal year 2000, a credit is allowed in the ﬁ rst ﬁ scal year that

billing discounts or qualifying contributions are given. Each year thereafter, the business must give

billing discounts or qualifying contributions of greater than 125 percent of those given in the ﬁ rst year,

respectively, to be eligible for the credit.

Form 41 0078 - Public Utility Tax Credit Application Low Income Assistance Form May 2008