Rev. Rul. 57-193

Advice has been requested whether electric and telephone membership corporations established under the General Statutes of North Carolina are considered to come within the scope of the exemption from certain Federal excise taxes provided for states or political subdivisions thereof.

The electric and telephone membership corporations involved are those established under chapter 117 of the General Statutes of the State of North Carolina. Among other things, the North Carolina statute: (1) declares that membership corporations formed under its provisions are public agencies with the same rights as other political subdivisions of that State; (2) requires that application for the formation of membership corporations be investigated and passed upon by the State Rural Electrification Authority; (3) requires that upon dissolution of membership corporations all assets remaining after the payment of debts shall pass to and become the property of the State; (4) grants to the property of membership corporations the same tax exemption granted to property owned by counties and municipalities of the State; (5) states that the power of eminent domain may be exercised by the State Rural Electrification Authority on behalf of the membership corporations; and (6) states that membership corporations may not be organized for pecuniary profit.

It is held that under the Internal Revenue Code of 1954, and subject to the appropriate regulations (made applicable to the 1954 Code by Treasury Decision 6091, C.B. 1954-2, 47) electric and telephone membership corporations established under chapter 117 of the General Statutes of North Carolina come within the scope of the exemption from certain Federal excise taxes provided for states or political subdivisions thereof. Such corporations are entitled to exemption from the following listed excise taxes provided that the requirements of the applicable regulations are met:

                           Exemption section