Our bank has a local utility company that has regularly been making CTR reportable cash deposits (from cash collections of their customer's utility bills). If we decide to Exempt them, we feel the utility company would be considered as a Phase II Exemption and have to meet Phase II Exemption requirements. However, because it is a utility company (even though it is local) should it instead be considered a "government entity" and thereby need to be listed as a Phase I Exemption? We want to make sure to properly document this if we elect to Exempt them.

Thanking you in advance.

I would not consider it a "government entity" solely because it is a utility; you need to look at the ownership. You have some that are subsidiaries of larger investor-owned holding companies (which might be exempt if incorporated), coops, privately owned, etc.

Did not consider the possibility of it being a subsidiary. Thank you for that thought process!

There are some government-owned utility companies, but they typically include "municipal" in their names. Even they, however, probably would not qualify for Phase I treatment, because they generally don't levy taxes, exercise powers of eminent domain, or police powers.

See 31 CFR 103.22(d)(5)(ii).

Would a public school district be considered a Phase I? How about a State College?

I believe a public school district is covered by Phase I. I'm not sure about a State College.

Public school districts can directly affect tax levies. State colleges, IMO, don't directly affect tax levies, don't exercise eminent domain or police powers (on behalf of the public). They are a harder stretch to consider Phase I exemption qualified.