Are you overpaying for your utility bill?

One man noticed his electric provider charging him gross receipts tax on electric bill

By Amy Davis - Reporter/Consumer Expert

HOUSTON - If you shop around for electric providers, you know you can save a lot of money just by choosing a lower rate. But there is one charge you may be paying that you simply don't owe.

We first told you about the "Miscellaneous Gross Receipts Tax" back in 2009.

Many viewers got big refunds after you saw the story, but Brian Knight emailed Consumer Expert Amy Davis because he thought it was time for a refresher.

"Every penny adds up," Knight told Davis.

And Knight watches every penny, especially on his electric bill.

Knight noticed his electric provider, Frontier Utilities, was charging him "gross receipts tax" on his electric service.

It's only about 2 percent of the total bill, but Knight knew he didn't owe it.

In Texas, only people who live in an incorporated city should pay the miscellaneous gross receipts tax.

Electric broker Michael Harrington says many homeowners and businesses are inaccurately taxed because the billing software used by electric companies can't differentiate between a home with a Houston address that is technically in an unincorporated area of the county and one that is in the city limits.

"It can be homeowners. It can be business. It can be churches. It can be anything," Harrington explained.

"It's pretty easy to see actually when you look at it," said Knight, who lives in Cypress, an unincorporated area of Harris County.

"It's not big money, but it's some money," explained Knight.

"And it's your money," said Davis.

"Right," Knight agreed.

Knight says he's checked his bill every time he's switched providers since our story in 2009.

He's noticed the inaccurate tax at least twice.

"If you're nice and persistent, I've never had a problem getting anybody to change it," he said.

If you find that your electric provider has been charging you the gross receipts tax for some time, you are entitled to a refund of all the money you paid.

Knight's refund for about two years of charges netted him approximately $60.

Harrington said it's not as the electric companies are keeping the cash.

"It's not a profit for them," he explained. "They don't care. It's a pass through. If they overcharge you, they'll just get it back and not pay the state any more money."

The first thing to do if you notice you're being charged the GRT or gross receipts tax is to call your electric company.

Be prepared for the customer service representative to tell you that it's not wrong and you do owe it. You'll probably have to escalate the call to a supervisor.

One of the easiest ways to figure out if you technically live in the city is to look at who you pay for water and trash service. If you pay a municipal utility district and not a city, you do not live in the city.

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