Electric cooperatives are unique in many ways. They are owned by you, the membership. They are governed by a board of trustees, who are members themselves and elected to the board by their fellow members. They are not-for-profit, and any margins the cooperative makes are allocated back to the membership in the form of patronage capital. One fallacy I often hear is that electric cooperatives are tax exempt. It is true that electric cooperatives are unique in the way that they are taxed, but they are taxed nonetheless.
Oklahoma state statutes define how electric cooperatives are to pay taxes. In accordance to Section 1803 of Title 68, rural electric cooperatives must pay a tax at the rate of 2% of the gross receipts derived by the sale of electric energy during the calendar year. This tax is paid in lieu of property tax. Cooperatives must also pay an annual fee of $1.00 per 100 persons to whom it supplies electricity within the state, but shall be exempt from all other excise and income taxes.
The taxes are then apportioned by the Oklahoma Tax Commission. Of the taxes collected, 5% are paid to the State Treasurer for placement to the credit of the General Revenue Fund. The remaining 95% of the amounts collected are paid to the school districts in relation to the miles of distribution power line the cooperative owns in each school district.
As a former school teacher and administrator, I can say that these funds are not insignificant nor are they taken for granted by the schools. In education, every dollar is needed and directly affects the education a student receives.
Beyond the gross receipts tax that Central pays, many members also help our local schools by participating in Operation Round Up. The program rounds up electric bills to the next whole dollar and the change, less than a dollar each month, is put in the Central Community Foundation Operation Round Up fund. The foundation board of directors then use these funds to provide grants to organizations and individuals. One of the major focus areas for the foundation
Last year, more than $34,000 in Operation Round Up grants were provided to schools in Central’s service area. Schools use Operation Round Up grants to fund playground equipment, purchase technology, develop learning labs, and more. I cannot say enough about the value of Operation Round Up – if you’re not signed up, please consider it, and call Central to sign-up.
As schools get ready for the upcoming school year, I just wanted to make members aware of a couple ways Central, and members like you, are supporting our schools – it’s part of our larger mission of Empowering Our Members and Communities.