PPL (NYSE:PPL) announced today that the U.S. Supreme Court unanimously overturned a previous ruling that would've left the utility with a $40 million U.K. "windfall tax" and no concurrent credit in the United States.

A windfall tax is a unique U.K. tax first filed in 1997 that allows the Crown to claim any "excess profits of the privatized utilities," essentially ensuring that regulated rates stay reasonable.

The Supreme Court wrote in its ruling opinion:

We agree with PPL and conclude that the predominant character of the windfall tax is that of an excess profits tax, a category of income tax in the U.S. sense.

PPL General Counsel Robert Grey noted that PPL was pleased with the unanimous ruling and that his corporation has "held throughout the process that because the U.K. windfall tax was based on income, it should therefore be creditable against our U.S. income taxes."

More than half of PPL's Q1 earnings came from the U.K., where utilities have recently made major strides in regulatory approvals.

With this most recent ruling, PPL expects to add a one-off $40 million tax benefit to its Q2 2013 earnings. As a comparison point, the utility paid $545 million in income taxes for fiscal 2012.

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