Companies often seek ways to reduce their bills and increase revenue. Some businesses may qualify for a sales tax exemption on their utility bills based on how they use electricity and natural gas. Companies must complete a predominant use study to be eligible for this exemption. The following will explain this procedure.
What Is It?
A predominant use study looks closely at a company’s energy usage by connecting to the business’s meters and monitoring how much energy qualifying processes and equipment use. The minimum requirements vary by state and provide different exemption solutions. After the study, you will receive a certificate to present to your utility company to obtain your tax exemption.
Why Do You Need One?
Many companies request a predominant use study to save money. However, that isn’t the only benefit of these studies. Companies will get a detailed picture of how much energy they use and where they can cut back to save money and protect the environment. You can retroactively claim back sales tax paid over a previous period, which varies by state.
Who Qualifies?
Predominant use studies in several states provide sales tax exemption to companies conducting qualifying business. Generally, companies manufacturing or processing products for retail consumption may qualify for this tax exemption. Completing a predominant use study can indicate whether you are eligible.
Do you qualify for a predominant use study to get a sales tax exemption? Visit the Business Name website to schedule it.
