How To Pay For A Predominant Use Study

How To Pay For A Predominant Use Study

One of the reasons businesses across the states offering a utility sales tax exemption may not consider a predominant use study is a concern over the cost. However, the cost is rarely a factor with these studies. They typically result in significant refunds and the ongoing cost-savings of qualifying utility sales taxes.

Why Consider a Study?

Each state offering an exemption for utility usage has specific guidelines for the qualifications of a business, company, organization, or entity to be eligible for utility sales tax refunds and future reductions through the program.

The study assesses the use of electricity and natural gas, and in some states water, on a meter-by-meter basis. The study looks at each device, machine, or appliance served by that meter. Under the guidelines, the use will either qualify or not qualify for the exemption. The percentage of utility used on that meter that qualifies under the study will result in a corresponding future reduction in the sale utility taxes.

In all states, a predominant use study also allows the business to request a refund for a period looking back. In most states, this is 36 or more months, resulting in a significant refund.

Paying for a Predominant Use Study

The refund, which may be the qualifying percentage or up to 100% of the utility sales taxes paid by the company over the lookback period, is often more than the cost of the predominant use study. In other words, the study pays for itself while also providing the business with a future decrease in sales taxes.

B. Riley Financial, Inc. offers full predominant use study services in states offering the exemption. To find out more, visit our website.

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