Eric Douglas Published

Water Company Must Now Inform Nonprofits Of Tax Exemptions

Water pouring from a faucet into a clear glass cup.Jasonanaggie/Wikimedia Commons

West Virginia-American Water Company (WVAWC) is now required to let nonprofit organizations know when they might be entitled to tax breaks on their utility bills.

On Wednesday, the Public Service Commission (PSC) said the water company must break out clearly for tax-exempt customers any tax breaks being offered by any town or city across the state in its coverage area.

Those breaks would be for exemptions to local taxes for some charitable, religious or nonprofit organizations.

The requirement was limited to the 19-county water company.

Some municipalities impose business and occupation taxes and municipal excise taxes, which were the subject of the decision. Some towns and cities also provide tax exemptions for various religious, nonprofit or charitable organizations.

The case involved a complaint brought by a tax-exempt school that claimed it was denied its proper status by WVAWC. Further, the school asserted the company had improperly collected municipal taxes from it.

The commission was “troubled that exemptions we know to exist in certain municipalities” served by the water company are not explained to customers.

WVAWC “should be aware of exemption qualifications specified in ordinances and notify a customer seeking an exemption of the qualification requirements,” the PSC ruled.

The company “may be charging customers with municipal tax surcharges and not providing sufficient notice to the customers that certain statutory exemptions exist.”

It said the commission is “certain” that no exemptions were listed on the company’s filing with the commission.

“We direct WVAWC to obtain current copies of the municipal tax ordinances for the municipalities listed as requiring tax surcharges in its tariff and file updated tariff pages with explanatory footnotes if any exemptions apply,” the PSC said.

More information on this case can be found on the PSC website: Click on “Case Information” and access Case No. 22-1035-W-C.