Electric, Gas and Heat Commercial Property

Medium

When assessing electric and gas companies, all operative property of investor-owned utilities, real and personal, is subject to assessment.  Like the other centrally assessed companies, the system value is calculated and allocated to North Dakota.

Both cost and income approaches to value are used when sufficient information is available, however, the income approach is difficult to calculate due to the business structure of IOU’s.

Some examples of IOU’s are Montana Dakota Utilities, Xcel Energy or Northern States Power, and Otter Tail Power Company.

The annual reports are due May 1st of each year.

Medium

To determine the tax for electric and gas companies, the true and full operative value is multiplied by 5% to get the taxable value, it is then multiplied by the local mill rate. A mill is 0.1% or 1/10 of a percent, in order to calculate you take 0.001 times your taxable value and multiply that by your total mills to identify your total tax owed.

For example, let's identify the property tax for an electric and gas company that is worth $9,500,000 (true and full value) located where your local taxing entities total 250 mills.  

  1. Electric/Gas Companies True and Full Operative Value x 5%= Taxable Value. ($9,500,000 x .05 = $475,000)
  2. Taxable Value x mill = Mill Rate. ($475,000 x .001= $475)
  3. Mill Rate x # of taxable mills= Total Tax Owed. ($22.50/$45 x 250 = $118,750)

The total tax owed on a windfarm worth $9,500,000 with a 250 mill levy would be $118,750.

Appeals must be directed to the State Board of Equalization. If any company is aggrieved by any assessment of omitted property made by the tax commissioner under this chapter, it has the right to appeal to the State Board of Equalization for a review of such assessment. Such appeal must be taken by filing a notice of appeal with the tax commissioner within thirty days after the hearing date specified in the notice provided by section 57-07-02.

There are no tax incentives for this property, but there may be certain income or sales tax incentives that apply. 

Property tax is a cumulation of different taxing entities and authorities. These various forms of local government include your county, city, township, school board, park board and any other entity that is authorized to levy property taxes. Although property taxes are payable to the county in which you reside, it is important to note that the funds are distributed as shown in the mill levy breakout on your statement

Medium
Medium