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Billings and Collections
Consumption Tax
Effective January 1, 2001
WHAT IS THE CONSUMPTION TAX?
State legislation that became effective on January 1, 2001 replaced three existing taxes with a new state-wide "Consumption Tax." The three taxes that were replaced are: 1) the State Gross Receipts Tax, 2) A regulatory tax imposed by the State Corporation Commission, and 3) the Local Utility License Tax.
As a result of the state legislation, consumers now see a line on their electricity and natural gas bills that says "Consumption Tax." Although the line on the bill is new, consumers have been paying the three taxes indirectly for years. These taxes were "imbedded" in the rates of the utility companies and are now separated from the rates and considered as a single tax.
The rates for the local (Roanoke City) portion of the Consumption Tax for both the electric and natural gas utilities are specified by Sections 58.1-2900 and 58.1-2904, respectively, of the Code of Virginia.
RATE OF TAX
Section 58.1-2900 of the Code of Virginia sets forth the Consumption Tax Rates for Electricity based on Kilowatt Hours (kWh) 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 $0.00155 per kWh.
State Rate $.00102 Special Regulatory Rate $0.0015 Local Rate $0.00038
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 $0.0099 per kWh.
State Rate $0.00065 Special Regulatory Rate $0.00010 Local Rate $0.00024
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 $0.00075 per kWh.
State Rate $0.00050 Special Regulatory Rate $0.00007 Local Rate $0.00018
Section 25.1-2904 sets forth the Consumption Tax Rates for Natural Gas as follows:
Each consumer of natural gas in the Commonwealth shall pay tax on the consumption of all natural gas consumed per month not in excess of 500 CCF (CCF equals 100 cubic feet) at the following rates:
1. State Consumption Tax Rate of $0.0135 per CCF.
2. Local (Roanoke City) Consumption Tax Rate of $0.004 per CCF.
3. A special regulatory tax rate of up to $0.002 per CCF.
Roanoke City only receives the "Local" portion of the tax. The other two portions of the tax are paid to the state.
You may also wish to visit the website of your local electricity or natural gas service provider for additional information.
FOR MORE INFORMATION CONTACT:
Billings and Collections
215 Church Avenue, SW, Room 212
Roanoke, VA 24011-1529
(540) 853-2880 or (540) 853-6825
e-mail: billings@roanokeva.gov
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