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  • Thursday, March 16, 2006

    A new kind of corporate tax cheating

    From the NYT via Common Dreams:

    Many electric utility companies across the nation are collecting billions of dollars from their customers for corporate income taxes, then keeping the money rather than sending it to the government.

    The practice is legal in most states. The companies say it is smart business.

    ...

    An examination of regulatory filings by The New York Times shows that companies with electric utilities in at least 26 states have pocketed money intended for income taxes, and that utilities can legally do so in 21 more states.

    Because they are legal monopolies, utilities must charge rates set by state regulators. These cover all costs — from buying fuel, to building new power plants, to a virtually guaranteed profit and paying the taxes on that profit.

    If you ever wondered what the term "good corporate citizenship" meant, now you know.

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