The Tennessee Valley Authority (TVA) was created by an act of Congress, the Tennessee Valley Authority Act, in 1933 as part of President Franklin D. Roosevelt's initiative to help the region and the nation during the Great Depression. Section 13 specifically required that payments be made to the states in which it operated. The states and contained local governments were prohibited from taxing TVA or the federal government or its agencies in any manner. Therefore, TVA in-lieu-of (tax) payments were established to be made to the states and are based on preceding year power sales or gross receipts, excluding power used by TVA itself, or sold or delivered to any other department or agency of the federal government for any purpose other than resale.
Source: The legal cite for creating TVA may be found in Ch. 32, 48 Stat. 58 (1933)(codified at 16 U.S.C. sections 831 - 831dd). A copy of this law plus more information on TVA may be obtained on its Web site, www.tva.com.
Due Dates: A monthly payment is due the last day of each month.
Tax Rate: 5% of estimated power sales or gross receipts paid in equal monthly installments. Payments are reconciled to actual power sales at the end of the federal fiscal year in September.
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