Utah Utility Sales Tax Exemption
Utah provides a sales and use tax exemption on electricity, natural gas, coal, fuel oil, and other fuels used or consumed in industrial, manufacturing, mining, or agricultural production activities. The exemption applies only to utilities that are directly consumed in the production process. Utilities used for general facility heating, cooling, or lighting are taxable.
Utility Study Requirement
To substantiate the exemption, businesses must maintain documentation that:
- Identifies the specific equipment and processes consuming the utility.
- Separates exempt (direct production) usage from non-exempt (general facility) usage.
- Provides calculations or engineering estimates to support exempt usage claims.
- Retains records for audit purposes by the Utah State Tax Commission.
Filing Requirements
To claim the exemption, businesses must provide their utility supplier with a completed Utah Exemption Certificate (Form TC-721), certifying the qualifying use of the utilities. If sales tax has already been paid on qualifying usage, businesses may file a refund claim with the Utah State Tax Commission. Refunds are generally available for up to three years from the date of payment. Detailed records, including utility bills and exemption documentation, are required when submitting a refund claim.