AzCPA

Issues: Taxes

Paying our Share.....

Members of the Arizona Competitive Power Alliance are investing over four Billion dollars in power plants, transmission upgrades and natural gas storage facilities in Arizona.  Completion of these critical infrastructure investments will  make AzCPA members among the state's biggest taxpayers--contributing over $400 million annually in property taxes alone to State and Local governments. 

Power Plants provide a tremendous boost to local economies.  The Harquahala Generating Station in western Maricopa County, for example, provides a 17 fold increase in local property tax values--enough for new fire equipment and enhanced local services with some left over to decrease local property taxes!

Exploding the Loophole  Myth...

"Closing  a loophole for merchant electrical generating plants, which import natural gas and sell their electricity out of state, could realize at least $400 million by 2004." 

          Gubernatorial Candidate Alfredo Gutierrez

While Alfredo's campaign faded quickly, his Loophole Myth lives on....

However...the facts speak for themselves.

Merchant Power plants pay Transaction Privilege tax or Use Tax on all the natural gas they use. Period, end of story, end of myth.  But wait there's more!

The state also charges Transaction Privilege Tax on the on the electricity generated from these plants.  Utilities pass these taxes through to Arizona Consumers.  Yes, the tax is paid by the generator AND by the consumer.

For example, the Reliant Desert Basin Plant in Casa Grande sells 100% of its output to Salt River Project.  Nearly 60% of the cost of the electricity the Desert Basin Plant produces is natural gas. Reliant pays the full 5.6% State TPT/Use Tax on the purchase of the gas.  SRP sells the electricity to the East Valley  and  (appropriately) charges the full 5.6% on the entire sale.  The effective tax rate (not including additional city taxes ) is 8.96% (5.6% times 60% at the wholesale level, plus 5.6% at the retail level)

Arizona Competitive Power Alliance members pay millions of dollars in property taxes.  Helping fund essential services throughout the state.  .