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Benefit From a Utility Sales Tax Exemption
The utility sales tax exemption allows organizations from specific industries and states to benefit from not paying sales tax on electricity and natural gas purchases. There are about 30 states that allow certain types of companies to reduce or entirely exempt sales tax on electricity and natural gas purchases. These states may also exempt residential use areas of certain types of facilities.
Conducting a predominant use study, also known as a utility study or use analysis, helps an organization identify how much of their energy used for exempt functions qualifies for a sales tax exemption. A predominant use study evaluates an organization’s electric and natural gas consumption by inventorying the various components involved with energy use including equipment and appliances, as well as their function and location. This utility study can potentially lead to a partial or total state and local sales tax exemption for the organization.
Qualifying Industries for a Utility Sales Tax Exemption
The following industries may qualify for a utility sales tax exemption:
Partner with Eide Bailly to Maximize Your Tax Savings
Eide Bailly is a Top 25 CPA firm and the number one accounting firm for energy efficiency tax incentives. Our tax advisors are comprised of nationally recognized professional engineers, energy modelers and architects, entirely in-house. We also have advisors who specialize in sales/use tax consulting across all states. We can help you maximize your tax savings with a predominant use study to benefit from a utility sales tax exemption.
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