by Zac Perkins, CEO
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 misunderstanding I often hear is that electric cooperatives are tax-exempt. It is true that electric cooperatives are unique in the way they are taxed, but they are taxed nonetheless.
Oklahoma state statutes define how electric cooperatives are to pay taxes. In accordance with 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 per 100 persons to whom it supplies electricity within the state, but shall be exempt from all other excise and income taxes.
Tri-County Electric Cooperative (TCEC) collects gross receipts tax on accounts with electric service in Oklahoma. Most of this tax, 95%, directly benefits local schools. In 2021, TCEC and its members contributed nearly $1.8 million to local secondary schools through the gross receipts tax.
In addition to this tax, TCEC supports education through the cooperative’s Giving Funds to Schools (GiFTS) program and the Operation Round Up program. To learn more about TCEC’s youth opportunities, visit the Youth & Education section of our website.