                                 CODE OF VIRGINIA

IMPOSITION OF TAX (§ 58.1-2900)

A. Effective January 1, 2001, there is hereby imposed, in addition to the local
consumer utility tax of Article 4 (§ 58.1-3812 et seq.) of Chapter 38 and
subject to the adjustments authorized by subdivision A 5 and by § 58.1-2902, a
tax on the consumers of electricity in the Commonwealth based on kilowatt hours
delivered by the incumbent distribution utility and used per month as follows:

   1. Each consumer of electricity in the Commonwealth shall pay electric utility
   consumption tax on all electricity consumed per month not in excess of 2,500
   kWh at the rate of $0.001595 per kWh, as follows:

   2. Each consumer of electricity in the Commonwealth shall pay electric utility
   consumption tax on all electricity consumed per month in excess of 2,500 kWh
   but not in excess of 50,000 kWh at the rate of $0.001085 per kWh, as follows:

   3. Each consumer of electricity in the Commonwealth shall pay electric utility
   consumption tax on all electricity consumed per month in excess of 50,000 kWh
   at the rate of $0.000875 per kWh, as follows:

   4. The tax rates set forth in subdivisions 1, 2, and 3 are in lieu of and
   replace the state gross receipts tax (&#xA7; 58.1-2626), the special
   regulatory revenue tax (&#xA7; 58.1-2660), and the local license tax (&#xA7;
   58.1-3731) levied on corporations furnishing heat, light or power by means of
   electricity.

   5. The tax on consumers under this section shall not be imposed on consumers
   served by an electric utility owned or operated by a municipality if such
   municipal electric utility elects to have an amount equivalent to the tax
   added on the bill such utility (or an association or agency of which it is a
   member) pays for bundled or unbundled transmission service as a separate item.
   Such amount, equivalent to the tax, shall be calculated under the tax rate
   schedule as if the municipal electric utility were selling and collecting the
   tax from its consumers, adjusted to exclude the amount which represents the
   local consumption tax if the locality in which a consumer is located does not
   impose a license fee rate pursuant to &#xA7; 58.1-3731, and shall be remitted
   to the Commission pursuant to &#xA7; 58.1-2901. Municipal electric utilities
   may bundle the tax in the rates charged to their retail customers.
   Notwithstanding anything contained herein to the contrary, the election
   permitted under this subdivision shall not be exercised by any municipal
   electric utility if the entity to whom the municipal electric utility (or an
   association or agency of which it is a member) pays for transmission service
   is not subject to the taxing jurisdiction of the Commonwealth, unless such
   entity agrees to remit to the Commonwealth all amounts equivalent to the tax
   pursuant to &#xA7; 58.1-2901.

   6. The tax on consumers set forth in subdivisions 1, 2, and 3 shall only be
   imposed in accordance with this subdivision on consumers of electricity
   purchased from a utility consumer services cooperative to the extent that such
   cooperative purchases, for the purpose of resale within the Commonwealth,
   electricity from a federal entity that made payments in accordance with
   federal law (i) in lieu of taxes during such taxable period to the
   Commonwealth and (ii) on the basis of such federal entity&#8217;s gross
   proceeds resulting from the sale of such electricity. Such tax shall instead
   be calculated by deducting from each of the respective tax amounts calculated
   in accordance with subdivisions 1, 2, and 3 an amount equal to the calculated
   tax amount multiplied by the ratio of the total cost of power supplied by the
   federal entity, including facilities rental, during the taxable period to the
   utility consumer services cooperative&#8217;s total operating revenue within
   the Commonwealth during the taxable period. The State Corporation Commission
   may audit the records and books of any utility consumer services cooperative
   that determines the tax on consumers in accordance with this subdivision to
   verify that the tax imposed has been correctly determined and properly
   remitted.

B. The tax authorized by this chapter shall not apply to municipalities&#8217;
own use or to use by divisions or agencies of federal, state and local
governments.

C. For purposes of this section, &#8220;kilowatt hours delivered&#8221; means in
the case of eligible customer-generators, as defined in &#xA7; 56-594, those
kilowatt hours supplied from the electric grid to such customer-generators,
minus the kilowatt hours generated and fed back to the electric grid by such
customer-generators.

HISTORY: 1999, c. 971; 2000, cc. 427, 614; 2020, c. 697; 2025, cc. 711, 715.