Sec. 32.7240  Operating other taxes.

    (a) This account shall be charged and Account 4080, Other Taxes--
Accrued, shall be credited for all taxes, other than Federal, state and 
local income taxes and payroll related taxes, related to regulated 
operations applicable to current periods. Among the items includable in 
this account are property, gross receipts, franchise and capital stock 
taxes; this account shall also reflect subsequent adjustments to amounts 
previously charged.
    (b) Special assessments for street and other improvements and 
special benefit taxes, such as water taxes and the like, shall be 
included in the operating expense accounts or investment accounts, as 
may be appropriate.
    (c) Discounts allowed for prompt payment of taxes shall be credited 
to the account to which the taxes are chargeable.
    (d) Interest on tax assessments which are not paid when due shall be 
included in Account 7540, Other Interest Deductions.
    (e) Taxes paid by the company under tax-free covenants on 
indebtedness shall be charged to Account 7360, Other Nonoperating 
Income.
    (f) Sales and use taxes shall be accounted for, so far as 
practicable, as part of the cost of the items to which the taxes relate.
    (g) Taxes on rented telecommunications plant which are borne by the 
lessee shall be credited by the owner to Account 5240, Rent Revenue, and 
shall be charged by the lessee to the appropriate Plant Specific 
Operations Expense account.

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