What receipts must a Louisiana electrical cooperative include when calculating inspection and supervision fees?

Plain-English summary

Louisiana Revenue Ruling 13-001 said an electrical cooperative had to include all revenue from its Louisiana intrastate business when calculating the inspection and supervision fee.

The ruling treated “gross receipts” and “gross revenues” as interchangeable for this purpose. It found no statutory exclusion for non-jurisdictional business within the utility's intrastate revenue.

The ordinary three-year prescriptive period in the Louisiana Constitution also applied to these fees because the governing provisions did not give them different treatment.

Fee base: all Louisiana intrastate revenue

La. R.S. 45:1177(A)(1) measured the fee by a public utility's gross receipts from Louisiana intrastate business.

La. R.S. 45:1179 directed the collector to use the sworn annual statements filed with the commission to determine the gross revenues on which the fee was computed.

The ruling also looked to La. R.S. 47:1003(11)(a), which defined gross receipts for the transportation and communications utility tax as total billings for services and receipts from business beginning and ending in Louisiana.

Reading those provisions together, the Department defined the relevant gross receipts as the utility's total intrastate revenues.

Non-jurisdictional business was not excluded

The ruling found that La. R.S. 45:1177(A)(1) did not distinguish non-jurisdictional business from other Louisiana intrastate business.

Accordingly, all intrastate revenue had to be included in the electrical cooperative's inspection and supervision fee calculation.

Three-year prescriptive period

Louisiana Constitution article VII, section 16 stated that taxes and licenses generally prescribe three years after December 31 of the year in which they are due, subject to interruption or suspension provided by law.

Because the inspection-and-supervision-fee provisions did not prescribe a different treatment, the ruling applied that ordinary three-year period to the fees.

What this means for you

Electrical cooperatives

The fee base in the ruling was broader than revenue from only commission-jurisdictional activity. Reconcile the fee calculation to all Louisiana intrastate gross revenue reported in the utility's annual statements.

Accountants and tax professionals

Do not treat “gross receipts” and “gross revenues” as different bases under this ruling. Review whether every intrastate revenue stream has been included.

Historical liability reviews

The ruling applied the standard three-year prescriptive period rather than a special limitations rule for inspection and supervision fees.

Common questions

Q: Did the fee base include only jurisdictional utility revenue?

A: No. The ruling found no distinction for non-jurisdictional business and included all Louisiana intrastate revenue.

Q: Were gross receipts different from gross revenues?

A: No. For this fee calculation, the ruling treated the terms as interchangeable.

Q: Did these fees have a special statute of limitations?

A: No. The ruling applied the Louisiana Constitution's ordinary three-year prescriptive period.

Citations and references

• La. R.S. 45:1177(A)(1) — fee measured by gross receipts from Louisiana intrastate business
• La. R.S. 45:1179 — annual statements used to determine gross revenues for the fee
• La. R.S. 47:1003(11)(a) — related definition of utility gross receipts
• La. Const. art. VII, section 16 — general three-year prescription
• LAC 61:III.101(C) — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 13-001

Original ruling text

RPage 1 of 2Revenue Revenue RevenueRRRRevenue Information Bulletin No 01-xxxx
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Revenue Ruling
No. 13 - 001
January 29, 2013
Inspection and Supervision Fees
Public Utility Cooperatives – Inspection and Supervision Fees
The purpose of this Revenue Ruling is to determine the composition of gross receipts for the
purpose of calculating the Inspection and Supervision Fees that are assessed on electrical
cooperatives. In addition, this Revenue Ruling will seek to determine whether the standard
statute of limitations applies to any additional liabilities that might result from a
misinterpretation of the definition of gross receipts on the part of electrical cooperatives.
It has recently come to the Department of Revenue’s attention that several Louisiana electrical
cooperatives might have under paid their Inspection and Supervision Fees. This under payment
may have come about due to the misinterpretation of the definition of gross receipts by the
electrical cooperatives.
Composition of Gross Receipts for Inspection and Supervision Fee Purposes
According to La. R.S. 45:1177(A)(1),
“Each … public utility doing business in Louisiana and subject to control and
jurisdiction of the commission shall pay to the state a fee for the inspection,
control, and supervision of the business service and rates of such … public utility,
in addition to any and all property, franchise, license, and other taxes, and fees
and charges now or hereafter fixed, assessed, or charged by law against such …
public utility. The amount of the fees shall be measured by the gross receipts of
each public utility from its Louisiana intrastate business …”
The statute does not per se define gross receipts. However, La. R.S. 45:1179 provides further
guidance by stating,
“The collector of revenue shall supervise and enforce the collection of the
inspection and supervision fee under the provisions of R.S. 45:1177 and 45:1178
and in assessing the annual fee, the sworn annual statements filed with the
commission shall be used to ascertain the amount of the gross revenues upon
which the fee is to be computed.”
Finally, while not specifically on point, La. R.S. 47:1003(11)(a) provides some guidance in that
it defines “gross receipts” for purposes of the tax on transportation and communications utilities
to mean “the total amount of billings for services rendered and all receipts from business
beginning and ending within the state …”
Keeping the above statutes in mind, allows us to come to the conclusion that for public utilities,
gross receipts can be defined as the total intrastate revenues received by the public utility.

A Revenue Ruling is issued under the authority of LAC 61III.101 (C ). A Revenue Ruling is written to provide
guidance to the public and to Department of Revenue employees. It is a written statement issued to apply principles
of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not binding on
the public. It is a statement of the department's position and is binding on the department until superseded or
modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.

Revenue Ruling No. 13-001
Page 2 of 2

Upon further examination of La. R.S. 45:1177(A)(1), it can be seen that no distinction is made
for non-jurisdictional business of the public utility. As such, all intrastate revenues of the public
utility should properly be included in the calculation of inspection and supervision fees.
Applicability of the Standard Statute of Limitations
According to the Louisiana Constitution, Article 7, Section 16, “Taxes, except real property
taxes, and licenses shall prescribe in three years after the thirty first day of December in the year
in which they are due, but prescription may be interrupted or suspended as provided by law.”
Conclusion
The statutes shown above concerning gross receipts can be seen as being entirely consistent as
they all require gross receipts to essentially encompass all gross revenues of the public utility
from its Louisiana intrastate business. It is clear that in the statutes shown above the terms
“gross receipts” and “gross revenues” are being used interchangeably. As such, the use of “gross
revenues” as the basis for calculating inspection and supervision fees for electrical cooperatives
is appropriate.
The absence of any reference to a different treatment for inspection and supervision fees in
regards to the standard statute of limitations found in the Louisiana Constitution suggests that
such fees should not receive any special treatment. As such, the three year prescriptive period
found in Article 7, Section 16 of the Louisiana Constitution would apply to inspection and
supervision fees, in keeping with other state taxes and fees.
Tim Barfield
Executive Counsel