Just scored a nice win for a county government client in Georgia. Four county buildings on Georgia Power were all paying a 4% city franchise fee even though they're located outside the city limits in unincorporated county territory. The franchise fee only applies within the city limits where the franchise agreement is in effect. The county buildings should have been exempt because they're not in the city. Georgia Power refunded $23,400 going back 2 years across the four accounts. The billing address was inside the city but the service addresses were in the county — the utility was applying the fee based on billing address instead of service location.
Franchise fee applied to tax-exempt government building — got $23K back
That's a fantastic catch. The billing address vs service address issue trips up utility billing systems all the time. I had a similar situation with a school district in South Carolina — three schools were just outside the city limits but the district's central office was inside the city. Dominion was applying the franchise fee to all district accounts based on the central office billing address. Corrected it and recovered $8,700. Always verify the service address is within the municipality that authorized the franchise fee.
Another angle on this — government buildings are sometimes exempt from franchise fees even if they ARE inside the city limits. Some franchise agreements specifically exclude government accounts or tax-exempt entities. Check the franchise agreement language carefully. I found an exclusion for "state and local government facilities" in a franchise agreement in North Carolina that saved a state university $4,200/year per building.
Excellent finds. This thread highlights why franchise fees and municipal charges deserve careful scrutiny. The errors tend to be systematic — if one account has the wrong franchise fee, every account in the same billing class or geographic area likely has the same error. Always check the service address jurisdiction, the franchise agreement terms, and any exemptions for government or tax-exempt entities. And Greg, the billing address vs service address mistake is one of the most underappreciated errors in utility bill auditing. It affects franchise fees, gross receipts taxes, sales tax rates, and sometimes even the base rate schedule.