                                 CODE OF VIRGINIA

MINIMUM TAX ON CERTAIN ELECTRIC SUPPLIERS (§ 58.1-400.3)

A. 1. An electric supplier, except for those organized as cooperatives and
exempt from federal taxation under § 501 of the Internal Revenue Code of 1986,
as amended, shall be subject to a minimum tax imposed by this section, instead
of the corporate income tax imposed by § 58.1-400 if applicable, net of any
income tax credits that may be used to offset such tax, if the tax imposed by §
58.1-400 is less than the minimum tax imposed by this subsection. An electric
supplier that is organized as a limited liability, partnership, corporation that
has made an election under subchapter S of the Internal Revenue Code, or other
entity treated as a pass-through entity shall be subject to the minimum tax in
the manner prescribed by regulation.

   2. The minimum tax imposed by this subsection shall be equal to 1.45 percent
   of such electric supplier&#8217;s gross receipts for the calendar year that
   ends during the taxable year minus the state&#8217;s portion of the electric
   utility consumption tax billed to consumers.

B. 1. An electric supplier that is organized as a cooperative and exempt from
federal taxation under § 501 of the Internal Revenue Code of 1986, as amended,
shall be subject to a minimum tax, instead of the tax on modified net income
imposed by § 58.1-400.2, if the tax imposed by § 58.1-400.2, net of any
credits that may be used to offset such tax, is less than the minimum tax
imposed by this subsection.

   2. The minimum tax imposed by this subsection shall be equal to 1.45 percent
   of such electric supplier&#8217;s gross receipts from sales to nonmembers for
   the calendar year that ends during the taxable year minus the consumption tax
   collected from nonmembers.

C. In the case of an income tax return for a period of less than 12 months, the
minimum tax shall be based on the gross receipts for the calendar year that ends
during the taxable period or, if none, the most recent calendar year that ended
before the taxable period. The minimum tax shall be prorated by the number of
months in the taxable period.

D. The State Corporation Commission shall calculate and certify to the
Department for each tax year as defined in &#xA7; 58.1-2600 the name, address,
and minimum tax for each electric supplier. The Commission shall mail or
otherwise deliver a copy of the certification to each affected electric
supplier.

E. When an electric supplier subject to the tax imposed by this section is one
of several affiliated corporations that file a consolidated or combined income
tax return, the portion of the affiliated corporations&#8217; tax liability that
is attributable to the electric supplier shall be computed as follows:

   1. Each corporation included in the consolidated or combined return shall
   recompute its corporate income tax liability, net of any income tax credits,
   as if it were filing a separate return. The separate income tax liability of
   the electric supplier shall then be compared to the affiliated
   corporations&#8217; tax liability, net of any income tax credits, indicated on
   the consolidated or combined return. For purposes of this section, the lesser
   amount shall be deemed to be the corporate income tax imposed by &#xA7;
   58.1-400 and attributable to the electric supplier.

   2. a. If such corporate income tax amount is less than the minimum tax of the
   electric supplier as calculated pursuant to subsection A, the electric
   supplier shall be subject to the minimum tax in lieu of the corporate income
   tax imposed by &#xA7; 58.1-400.
   				b. If such corporate income tax amount exceeds the minimum tax of the
   electric supplier as calculated pursuant to subsection A, the electric
   supplier shall not owe the minimum tax.

F. The requirements imposed under Article 20 (&#xA7; 58.1-500 et seq.) of
Chapter 3 of this title regarding the filing of a declaration of estimated
income taxes and the payment of such estimated taxes, shall be applicable to
electric suppliers regardless of whether such taxpayer expects to be subject to
the minimum tax imposed herein or to the corporate income tax imposed by &#xA7;
58.1-400.
			For purposes of determining the applicability of the exceptions under which
the addition to the tax for the underpayment of any installment of estimated
taxes shall not be imposed, it shall be irrelevant whether the tax shown on the
return for the preceding taxable year is the corporate income tax or the minimum
tax.

G. To the extent that a taxpayer is subject to the minimum tax imposed under
this section, there shall be allowed a credit against the separate, combined, or
consolidated corporate income tax for the total amount of minimum tax paid by
the electric supplier in all previous years that is in excess of the tax imposed
by &#xA7; 58.1-400 on the electric supplier for such years.

H. 1. To the extent an electric supplier or its parent company has remitted
estimated income tax payments in excess of its corporate income tax liability
for the taxable years beginning on or after January 1, 2001, but before January
1, 2004, such overpayments shall only be utilized to offset any corporate income
tax liabilities incurred pursuant to § 58.1-400 for taxable years beginning on
and after January 1, 2004, and shall not be claimed as a refund of overpaid
taxes, except as provided in subdivision 2 of this subsection. For the purposes
of this subsection, estimated income tax payments shall include any overpayments
from a prior taxable year carried forward as an estimated payment to be credited
towards a future tax liability.

   2. If an electric supplier has had a corporate income tax liability of greater
   than $0 for each taxable year beginning on or after January 1, 2001, but
   before January 1, 2003, then such electric supplier may claim a refund of any
   estimated income tax payments in excess of their taxable year 2003 corporate
   income tax liability.

I. Every electric supplier which owes the minimum tax imposed by this section
shall remit such tax payment to the Department of Taxation.

J. Notwithstanding any of the foregoing provisions, an electric supplier may not
adjust capped rates pursuant to &#xA7; 56-582 of the Code of Virginia on any
portion of the minimum tax due to the Commonwealth.

K. The following words and terms, for purposes of this section, shall have the
following meanings:
			&#8220;Consumption tax&#8221; means the state&#8217;s portion of the electric
utility consumption tax billed pursuant to Chapter 29 (&#xA7; 58.1-2900 et seq.)
of this title, for which the electric supplier is defined as the &#8220;service
provider&#8221; pursuant to &#xA7; 58.1-2901 less any amounts billed on behalf
of utilities owned and operated by municipalities.
			&#8220;Electric supplier&#8221; means an incumbent electric utility in the
Commonwealth that, prior to July 1, 1999, supplied electric energy to retail
customers located in an exclusive service territory established by the State
Corporation Commission. However, &#8220;electric supplier&#8221; also includes
an offshore wind affiliate as defined in &#xA7; 56-585.1:11.
			&#8220;Gross receipts&#8221; has the same meaning as defined in &#xA7;
58.1-2600 less receipts from sales to federal, state and local governments for
their own use.
			&#8220;Nonmember&#8221; has the same meaning as defined in &#xA7; 58.1-400.2.

HISTORY: 2004, c. 716; 2009, cc. 37, 152; 2023, c. 510.