Stop Paying Sales Tax on Your Company’s Electricity: Get A Predominant Use Study.
Do you want to stop paying sales tax for your company but not sure what you need to do to get exempt or even if you would qualify to be exempt? Well, you would need to get a predominant use study. And yes, we can help you with that.
What is a predominate use study?
A predominant use study is an audit or evaluation of your company’s electric and/or natural gas consumption. That then determines if the majority (over 50%) of your consumption is used during the production of product(s) or residential property for sales-tax exempt purposes. If you qualify for sales tax exemption with the study, you then get a certificate. This certificate is important because is provides proof to any government entity or organization that you qualify for sales tax exemption.
Refund!
Let’s talk about getting some money back! If it is found that you qualify for sales tax exemption then you might qualify for a refund of up to 4 years (48 months) back. And yes that is something that is handled as part of the use study. Then, moving forward the predominant usage study also proves to the utility the company is eligible for the refund. In addition, the government now has proof that the company is legally eligible for sales tax exemption on their electricity.
What types of companies are eligible for sales tax exemption?
Commercial:
In the state of Texas there is an incredibly wide range of manufacturing companies are eligible for sales tax exemption on their electricity bills. Some of the manufacturing and fabrication industry include, but are not limited to:
- Agriculture
- Audio Recording Production
- Bakeries
- Beverage Processors
- Chemical Plants
- Clay Shops
- Electronics
- Food Processors
- Golf Courses
- Horticulture
- Medical Devices
- Mining
- Oil & Gas
- Pharmaceuticals
- Print Shops
- Refineries
- Steel Mills
- Textile Operations
- Video Recording Production
- Wood Shops
Residential:
When it comes to residential, there are also many eligible to receive the sales tax exemption. Some of the buildings include but are not limited to:
- Apartment Buildings (with a master meter)
- Assisted Living Facilities
- Condominiums (with a master meter)
- Mobile Home Parks
- Nursing Homes
- Retirement Homes
How Can I Become Sales Tax Exempt?
Well, by law, the only way for a company to become exempt in Texas is to obtain the Predominant Use Study (see the Texas Administrative Code, Title 34, Rule §3.295). In Texas “a registered engineer or a person with an engineering degree from an accredited engineering college” is the one to submit the results of the study to the appropriate utility. And to become sales tax exempt you must prove that you use at least 50% of your electricity consumption for the manufacturing business or residential property is consumed during the production of the product(s).
Ready to move forward?
Contact us today! We work with a trusted partner to get you the predominant use study you need to be certified and get your money back.