Ruling hands Redmond bill for $2 million Tuesday, November 02, 1999 By Herbert Atienza Journal Reporter

REDMOND -- Redmond will have to return almost $2 million the city collected from Puget Sound Energy to pay a utility tax the state Court of Appeals now says is ambiguous. Redmond officials say they will appeal the decision before the state Supreme Court. At issue is a tax bill the city sent Puget Sound Energy three years ago for $1.87 million, which represented back taxes -- including penalties and interest -- the city said the utility failed to pay between 1970 and 1995.

The best part of the article is this:

The difference between how Puget Sound Energy and Redmond interpreted the tax collection ordinance can be illustrated on a hypothetical $100 electric bill: Puget Sound Energy considered $100 the gross taxable amount and charged $5.50 in utility tax, which was then remitted to the city. But Redmond believes that taxes themselves are a business expense and that, therefore, the gross taxable amount should have been $105.50. Redmond believes Puget Sound Energy should have charged 5.5 percent of that -- $5.82 -- and passed that amount to the city.

The Redmond utility tax ordinance has since been modified to make it clear the tax is part of taxable amounts. Puget Sound Energy has since been tacking the amount on the bills of nearly 13,000 customers.

So the people of Redmond are getting taxed on the taxes they pay. And these are the people who only run for city council to look out for our best interest, as we are too dumb to think for ourselves. Must be a miracle the pols running the state didnt think of this. Just think, we could be paying MVET on MSRP+MVET+Sales Tax.

Example: $25,000 MSRP = $550 MVET

But under Redmonds way of thinking it would be: $25,000 MSRP + $550 MVET + $2,000 Sales Tax = $606 CoRMVET (City of Redmond MVET).

Read the full story here:

http://www.eastsidejournal.com/Homepagedocs/topnews/dkr85992.html

Ed  should not allow politicians to bred.

-- Ed (ed_bridges@yahoo.com), November 02, 1999

Answers

You know, Ed, this is kind of interesting. Sort of like "Xeno's paradox, if the newspaper were correct, you would need calculus to calculate the tax:

`` We are pleased that the court decided in favor of our customers, the residents and businesses of Redmond,'' said Puget Sound Energy spokeswoman Kremiere Boone.

The difference between how Puget Sound Energy and Redmond interpreted the tax collection ordinance can be illustrated on a hypothetical $100 electric bill:

Puget Sound Energy considered $100 the gross taxable amount and charged $5.50 in utility tax, which was then remitted to the city.

But Redmond believes that taxes themselves are a business expense and that, therefore, the gross taxable amount should have been $105.50. Redmond believes Puget Sound Energy should have charged 5.5 percent of that -- $5.82 -- and passed that amount to the city.

EXCEPT even the above isn't quite right. That would only get you $5.8025. What they really are saying is that the amount of the bill should be DIVIDED by .945 to get the amount including tax, not quite the same thing. (Don't need calculus after all) So there are AT LEAST three (3) ways this can be interpreted. The taxing authority, of course, wanted it interpreted the way that gave them the most money.

Time (and past time) to pull the plug on scams like this.

-- Craig Carson (craigcar@crosswinds.net), November 02, 1999.