Many businesses may qualify for a tax exemption on their utility bills, reducing their costs by eliminating sales tax. While some states only provide an exemption for the percentage used for qualifying equipment, Texas works differently. When you complete a predominant use study in Texas, if your qualifying energy usage accounts for more than half of all energy use, you will qualify for a full exemption.
Schedule Your Study
The first step in the process is to find a company to complete your predominant use study in Texas. Choose a company that is familiar with local regulations on these tax exemptions and uses a method that considers your yearly average for use. Some companies will only look at a month or two, which can lead to less accurate results, especially if you conduct the study in a slower period.
Complete the Study
After you choose a company for your predominant use study in Texas, they will set up the necessary equipment to monitor your use over a specified period. They will also help you determine which equipment qualifies for the tax exemption to more accurately calculate the percentage of exempt use. As long as your exempt usage is more than 50 percent of your total use, you will get a full exemption from sales tax on your utilities.
File Your Paperwork
Once your predominant use study in Texas is over, you can file the necessary paperwork and submit your documentation to your local utility company. The right company will help you with this process to ensure prompt implementation of your tax-exempt status.
If you’re interested in completing a predominant use study in Texas, visit the B. Riley Financial, Inc. website to schedule an appointment.