XIII. Taxes and Depreciation

The differences in the taxes and depreciation category are in property taxes, payroll taxes, depreciation, and state and federal income taxes. These differences are summarized in the following table.

YEAR 2003 YEAR 2004

(Dollars in Thousands)

Items	AVR	ORA	Difference	AVR	ORA	Difference
Property Taxes	$326	$334	($8)	$343	$297	$46
Payroll Taxes	165	130	35	174	116	58
Depreciation	1,228	1,192	36	1,339	1,288	51
State Income Tax	104	178	(74)	295	205	90
Federal Income Tax	410	697	(287)	1,028	718	310
Total Differences			($298)			$555

The differences between AVR's and ORA's taxes and depreciation estimates resulted solely from differences in rate base, payroll costs, expense, and revenue estimates. Taxes and depreciation should be recalculated based on the adopted rate base, payroll costs, expense, revenues, and cost of capital.