The Canastota Village Board received a letter from National Grid providing information about overpayments of local Gross Receipts Tax it made to municipalities over the last three years and to apology for its lack of communication on the issue. The village's portion owed to National Grid is $36,000. Letters were recently sent to the village requesting the money.
National Grid discovered it had inadvertently over paid local GRT to 150 municipalities, stating it had design flaws in the process that it used to calculate GRT payments to the state and municipalities, especially those revenue amounts that are not subject to GRT and specifically those relating to Energy Supply Company customers, services National Grid supplies outside of the municipality.
In a nutshell, National Grid underpaid the state and overpaid municipalities. Once the error was discovered in the second half of 2008, National Grid launched an internal investigation. As a result, changes were instituted to its customer billing system and a separate process will be done to calculate state GRT payments.
In the meantime, National Grid is putting together information packs containing the revised calculations of local GRT.
National Grid also intends to propose a "sensible and pragmatic settlement" to municipalities. The proposal will include National Grid's intent to waive any interest due on recovering overpaid amounts and confirmation that it will not request immediate repayment. If agreeable, the village could pay back the money through a deduction in future GRT payments.
National Grid collects a utility tax from all its customers in a municipality. State law reads that each municipality is entitled 1 percent of its total gross revenue as long as a Local Law is enacted. Canastota adopted a Local Law several years ago.