Analysis Of Centerpoint Energy's Proposal

The Supreme Court noted that IPL did not enjoy “complete dominion over the deposits” compared to other advance payment cases. IPL had an obligation to repay the deposits once the customers achieved good credit or terminated their service. More importantly, IPL did not require a minimum purchase once a customer paid such deposit. IPL also considered the deposits as a loan and paid back the refunds along with interest if funds were held longer for 6 months. With these facts, the Supreme Court ruled the deposits that IPL received when customers opened new accounts were not advance payments and should not be taxable to IPL when received.

While comparing the IPL case to CenterPoint Energy’s proposal, there are key factual differences that are critical