Auditing a tech company in Bend served by PacifiCorp (Pacific Power). Oregon has no sales tax so I almost skipped the tax review entirely. Then I noticed a line item called PUC Privilege Tax on the bill — about 1.5% of total charges. Is there any exemption from this Oregon-specific tax?
Oregon has no sales tax but watch for the PUC privilege tax on utility bills
The Oregon PUC Privilege Tax is a tax on the utility's revenue, not a sales tax on the customer. However, utilities pass it through to customers as a line item. Unlike sales taxes, this particular tax generally does not have exemption categories for manufacturers or nonprofits — it applies to the utility's gross revenue regardless of customer type. That said, verify the percentage being charged matches the current rate set by the Oregon PUC, and verify it's being applied to the correct base charges. Even non-exemptable taxes can be miscalculated. Also check for any local utility taxes that Bend or Deschutes County may impose separately.
Verified the PUC Privilege Tax rate and it was correct. No exemption available. But Randy's point about checking the calculation base was useful — I found that Pacific Power was applying a separate Bend city franchise fee at a rate that didn't match the current franchise agreement. Small overcollection but it's been running for 3 years. Even in a no-sales-tax state there's something to find on the tax lines.