March 3, 2011

CHEC win court case on appeal, and members may be due large refund

The North Carolina Court of Appeals issued a unanimous decision on Tuesday, March 1, regarding the ongoing litigation between Cape Hatteras Electric Cooperative and the North Carolina Department of Revenue (NCDOR).

The Court of Appeals affirmed the earlier position of the trial court, which ruled in favor of CHEC.  The Appeals Court decision upheld the judgment issued in November, 2009 ordering the NCDOR to refund the sales and franchise taxes paid by the cooperative since 2000, including interest. 

NCDOR began collecting the sales and franchise taxes in 2000 and 2001.  The cooperative paid the taxes under protest from 2000 until the Dare County Superior Court ruled in its favor in 2009.

The Superior Court found that the cooperative and its members did not owe the taxes and has ordered the NCDOR to refund of more than $3.6 million in sales taxes and nearly $3.7 million in franchise taxes, along with accrued interest.

CHEC has been working with the software vendor of its consumer information system to create a program that will enable CHEC to refund the sales taxes paid, plus interest, to its members as soon as the case is finalized.

 The NCDOR has until April 5 to file a petition with the North Carolina Supreme Court to hear the case.

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