Fiber service providers will face tax

Department of Revenue requiring tax of PUD

EPHRATA — Service providers on Grant County's fiber optic network will soon be charged a sales tax for services they provide to their subscribers.

Starting July 1, the Washington Department of Revenue will require the Grant County Public Utility District to collect the tax from service providers. The PUD and the DOR have been in discussions about the issue, and the issue was brought up between the PUD commission and a few service providers during public comment at Monday's PUD commission meeting.

"The state has determined that that sale of data is taxable," PUD Treasurer Nick Gerde said after Monday's PUD meeting.

Gerde told the commission Monday that he is currently working on a draft agreement with the state that will require the collection of sales tax but will wipe the slate clean on more than $150,000 in sales tax owed to the DOR prior to July 1.

Gerde said some services the PUD provides are taxable and others are not, but the DOR has determined that the sale of fiber services to service providers is subject to local sales and use taxes.

That sales tax amounts to 7.8 percent in Grant County that the PUD will be required to charge to service providers starting next month. Gerde told the commission that the tax will no longer be assessed starting in 2007. Those service providers, Gerde said however, cannot bill the tax to their customers as a tax.

"They can raise fees," Gerde said after the meeting, "they can't pass it on as a tax."

Also at Monday's PUD meeting, the commission approved to execute a collective bargaining agreement with the PUD and Local Union 77 of the International Brotherhood of Electrical Workers. The agreement sets rates of pay, hours of work and other employment conditions from April 1, 2005 to March 31, 2008.

The PUD commission also approved a revised schedule of non-union positions and salary adjustments. According to the PUD, non-union employees with a satisfactory performance evaluation will receive a two percent increase over the next 12 months.

The commission approved the transfer of approximately $225,000 of funds for material and labor for the overhaul of a second turbine and generator at the Wanapum Dam.