Contact:  Blake House                                             

Telephone:  678-455-1510

Email:  Blake.House@sawnee.com

SAWNEE EMC LOSES GEORGIA SUPREME COURT CASE

Sales Tax Refund Claim on Behalf of Members Denied

(Cumming, GA February 7, 2005) – Sawnee Electric Membership Corporation (Sawnee EMC) received notice today of a decision handed down by the Georgia Supreme Court in a case involving the collection and remittance of sales tax to the Georgia Department of Revenue.  The cooperative, headquartered in Cumming, Georgia, had petitioned the Court to review the merits of a sales tax collection case that began back in 1999. 

Sawnee EMC had filed, on behalf of its members, a claim for refund of Sales Tax with the Georgia Department of Revenue (GADOR) in the amount of $429,913 that related to sales tax charged on the excess funds that the cooperative is required by law to collect. The claim was not decided within a year of filing and the EMC pursued the refund in Forsyth County Superior Court where the corporation won a favorable ruling. 

The case was appealed by the Department of Revenue to the Georgia Court of Appeals.  The Court of Appeals ruled that the EMC did not have standing, or the right to bring the suit, to file a refund claim on behalf of its members.  This Court of Appeals decision was then appealed at the Georgia Supreme Court, who agreed to hear the case and decided today with the Appellate Court decision.

As a non-profit Electrical Membership Corporation, Sawnee EMC is owned by the members that it serves.  Annually, margins (revenue over operating cost) remaining at the end of a fiscal year are assigned to each member/owner in the form of a capital contribution, called a “patronage capital credit”.  Each member who provided revenue to the corporation during the operating year receives an allocation of the year end capital credit. 

Member contributions are made in the form of payments of power bills, in which the member pays sales tax.  The EMC believes that the member is entitled to a refund of the sales tax paid on the portion of their annual contributions or bills returned in the form of a capital credit.  The Supreme Court disagrees and ruled that the EMC does not have standing or the right to file a refund claim on behalf of its members who actually pay the tax.

“We are disappointed with the Court’s decision” stated Wendy Sellers, Sawnee EMC Chief Financial Officer.  “We exist only as an extension of the member and feel that the members of our cooperative should be entitled to this tax refund.  We will review what options, if any, exist and decide what steps make sense to pursue on behalf our of members.” 

About Sawnee EMC:

Sawnee Electric Membership Corporation is a distribution electric cooperative headquartered in Cumming, Georgia.  Sawnee serves electricity to over 128,000 accounts in seven counties of greater north Georgia.  Sawnee’s assets exceed $370 million with annual energy sales of 2.56 billion and revenue of $222 M.  With over 300 dedicated employees, Sawnee’s team of professionals meet the needs of its member-owners through its complex network of over 8,300 miles of distribution facilities.  Georgia’s 42 electric cooperatives now serve more customers than any other state network of EMCs in the nation.

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