Depending on their work, some companies can qualify for a tax exemption on their utility bills. Businesses that manufacture or process retail goods are often candidates for this exemption. You must request a predominant use study in Texas to determine eligibility. The following will help you understand the process.
Testing Process
After requesting a predominant use study in Texas, your chosen company will set up specialized equipment to monitor energy use for qualifying equipment and methods. They will collect data for a specified period and average over the entire year to get a clear picture. This process ensures you get a fair result instead of something inaccurate due to a slow or faster-paced time. If more than 51 percent of your energy is used by qualifying equipment, you will receive a complete sales tax exemption on utility bills.
Documentation
The results of the predominant use study in Texas will determine whether your company is eligible for the tax exemption. The testing company will provide the appropriate documentation for your utility company. These documents give you complete tax exemption moving forward and can reimburse your company for sales tax paid up to 48 months before the study.
Do You Need Another One?
Many companies wonder if they need another predominant use study in Texas to maintain tax exemption. While there is no requirement to complete studies regularly, requesting a new survey is recommended if anything significant changes within your company. You may need a new study if you change ownership, move locations, or add new equipment.
If you need a predominant use study in Texas, visit the Business Name website to schedule one.
