Utility Sales Tax Exemption
Eliminating sales tax on electricity, gas , water, and other utilities
UTILITY SALES TAX EXEMPTION
For manufacturers and others with large utility bills, energy costs are a significant expense, and many businesses unknowingly pay unnecessary sales tax on their utility bills. A Utility Sales Tax Exemption allows businesses to eliminate these taxes, leading to substantial savings.
How It Works
Businesses can eliminate sales tax on electricity, gas, water and certain other utilities used in qualified activities. A Utility Sales Tax Refund Study determines if at least 50% of utility usage qualifies for exemption. If eligible, companies can remove sales tax from future utility bills while claiming refunds for overpaid taxes from the past three years or more.
Benefits of a Utility Tax Exemption Study
- Immediate Cost Savings: Reduce ongoing operational expenses.
- Retroactive Refunds: Recover up to 100% of past sales tax payments.
- Compliance & Risk Mitigation: Ensure compliance with state tax laws.
- Competitive Advantage: Reinvest savings into production, hiring, or equipment.
Industries That Benefit
- Manufacturing: Powering machinery & production equipment.
- Industrial Production: Refining, processing, and material assembly.
- Agriculture & Food Processing: Energy used in growing, harvesting, and food production.
- Healthcare & Pharmaceuticals: Sterilization, medical device production, and lab operations.
HOW WE CAN HELP
Our team of energy professionals will perform free assessments to prequalify your project. Our service includes:
- Free Initial Assessment: Evaluate your eligibility for tax exemptions.
- On-Site Inspection & Energy Study: Conduct a Utility Sales Tax Refund Study.
- Full Refund Management: Work directly with CPA on claims.
- Ongoing Exemption Support: Maintain compliance and ensure long-term savings.
CASE STUDY
A Primary Steel Manufacturer produced 500,000 tons of steel annually via blast furnace. Primary energy source is coal coke, with natural gas and electricity as key supplements.
Costs:
• Coal Coke: $30,000,000/year
• Natural Gas: $3,750,000/year
• Electricity: $7,500,000/year
Total Utility Cost:
$41,250,000/year
Tax Savings:
$675,000 (assuming 6% sales tax)