Tax Assessments

Tax Exemption Studies

Hundreds of manufacturing companies waste thousands of dollars every year paying state sales tax on their utility bills when they may easily qualify for a tax exempt status. A Predominant Use Study from Choice could allow a company to become permanently tax exempt – easily eliminating 8% of its electricity and natural gas expenses.

What is a Predominant Use Study?

A Predominant Use Study investigates, in detail, all the uses of electricity and natural gas at the facility by meter to confirm that more than 50% is consumed in manufacturing or producing a product. A registered Professional Engineer familiar with motor ratings and energy use is necessary to perform these studies and certify the results.

What is the benefit of having a Predominant Use Study?

A manufacturer who can become exempt from paying sales tax on his electric and/or gas bill can save 6% to 8.25% in many states. Savings will start immediately going forward once a company’s current energy provider receives the Tax Exemption Certificate. Additionally, most states allow a refund of the sales tax paid for up to 48 months. That refund could benefit a company by tens of thousands of dollars.

Who are candidates for a Predominant Use Study?

  • A company whose sales tax exceeds $50 per month
  • A company that changed locations and has a new meter, but no exemption certificate
  • A company that recently changed energy providers, but cannot find its exemption certificate
  • A company that recently discovered that they can now be tax exempt
  • Some states, i.e., Wisconsin, have recently passed legislation making sales tax exemption now possible or amending their existing laws

What is required for a Predominant Use Study?

Provide up to 36/48 months (depending on your state) of electric and/or gas bills for the meters you want studied for exemption.