Detailed Multistate Development
Two states recently issued letter rulings addressing whether sales tax is imposed on charges for access to electric vehicle charging stations. In both rulings, the taxpayer owned and operated the charging stations. Customers paid for access to the stations based on charging time, not by the kilowatt-hour or electricity consumed, with a fee for starting a charging session and an additional charge for time spent leaving a fully-charged vehicle connected to the charging station.
The Georgia Department of Revenue noted that the taxpayer had not obtained a certificate of public convenience and necessity from the Georgia Public Service Commission (PSC), the state’s utility regulatory authority. As such, the taxpayer was not a “utility” that was “selling” electricity, which is subject to sales tax when sold at retail. As it was not a utility selling electricity, the taxpayer could not purchase its electricity tax-free for resale. Further, its charges, based on a customer’s time for use of the charging stations, were not subject to sales and use tax. The South Carolina Department of Revenue reached a different result. It noted that the definition of tangible personal property includes sales of electricity, and explained that the sale of electricity to the taxpayer by its utility provider was a wholesale sale not subject to sales tax. However, each of the taxpayer’s fees/charges was considered the retail sale of electricity and was therefore subject to South Carolina sales tax. Please contact Ben Cella at 404-979-2012 for more information on Georgia Letter Ruling SUT-2019-07 and Nicole Umpleby at 704-335-5586 for more information on South Carolina Private Letter Ruling No. 20-5.
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