Bloomberg Tax
Aug. 29, 2019, 8:45 AM

Rural Electric Co-Ops See Need for Tax Fix as ‘Existential Issue’

Lydia O'Neal
Lydia O'Neal

Rural electric cooperatives are slowing down construction of broadband networks and renewable energy infrastructure and taking on debt as a 2017 tax law change threatens their traditional tax exemption.

The potential loss of tax-exempt status is also pushing the cooperatives—which were created in the 1930s to cheaply deliver power to far-flung farms and villages—toward debt financing, leaving them with hefty interest payments, while a legislative fix remains in limbo. Lawmakers have until the end of the year to pass a fix, or many co-ops will end up owing taxes they’ve never owed before for the 2019 year.

“We see it ...

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