In late December 2017, Congress and President Trump enacted The Tax Cuts and Jobs Act – a major overhaul of the federal tax structure. AEP supports these tax provisions, which provide benefits to our customers, our communities and our employees. We believe the tax changes may help to stimulate the economy to support much-needed growth in our service territory.
The reduction in the corporate tax rate from 35 percent to 21 percent, effective in 2018, will significantly benefit our customers. The tax bill also maintains the federal income tax deduction for interest expense for regulated electric companies and preserves the federal income tax deduction for state and local taxes paid by businesses. Customers will continue to benefit from these tax deductions. In fact, benefits from federal tax reform have already begun to flow to our customers through lower rates in some of our jurisdictions.
We are working closely with our regulators to analyze the options for delivering tax benefits to all of our customers, while ensuring the continued financial health of the company.