State and Local Reporter - 11/25/2003 (Plain Text Version)Duane Willenbring, Chair View Graphical Version | Subscribe
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Editor... In this issue: Builders May Be Entitled to CIAC Refunds From UtilitiesBuilders who have paid contributions in aid of construction (CIAC) to gas or electric companies may be entitled to get some of their money back as a result of benefits to utilities contained in the Bush Administration’s tax bill. These changes do not apply to water or sewer service. Also, builders may find that they have to pay utilities a smaller amount for CIAC through the end of next year. Because this spring’s tax cut accelerated the depreciation schedules for utilities, reducing their taxes, builders may not have to pay as much to cover the utility’s income taxes due to CIAC. The acceleration provision is retroactive to September 11, 2001, so builders who have paid CIAC since that date may be entitled to a partial refund from the utility, but not from the Internal Revenue Service. Several factors will determine whether a builder is entitled to a refund from a local utility, the most important of which is the builder’s contract with the company. Builders are advised to check with their tax professionals to see if the refund is worth pursuing. Because the dollar amounts are so small, it may not be worthwhile for individual builders to pursue a refund. However, if many builders have the same contract language, the builders association may be able to negotiate a refund process for all builders with that contract. In the meantime, builders should be aware that under the changed tax rules they may not need to be paying as much to the CIAC until the end of next year, when many provisions of the 2003 tax act expire. For further information, e-mail Andrew Holliday at NAHB or call him at 800-368-5242 x8488. For more information or to contact us directly, please visit www.NAHB.org | ©2004, National Association of Home Builders |