Rhode Island Utility Sales Tax Exemption
Rhode Island provides a sales and use tax exemption for electricity, natural gas, and certain other fuels used in manufacturing. The exemption applies when the utilities are consumed directly and exclusively in the manufacturing process for goods intended for sale.
Utility Study Requirement
A utility usage study is typically necessary to establish eligibility for the exemption. The study should:
- List all equipment and systems using the utility.
- Document annual consumption for each piece of equipment.
- Separate usage into exempt (manufacturing) and non-exempt (non-manufacturing) categories.
- Demonstrate that qualifying usage meets the exclusive use requirement.
Filing Requirements
To obtain the exemption, businesses must provide their utility supplier with a completed Rhode Island Resale or Exemption Certificate (Form ST-12) indicating that the utilities are for manufacturing use. If sales tax has been paid on eligible utility usage, businesses may apply for a refund from the Rhode Island Division of Taxation. Refund claims are generally limited to taxes paid within the last three years and must be supported by utility bills, usage studies, and the exemption certificate.