Not all states in the United States provide qualifying businesses with the opportunity to apply for a utility tax exemption. Surprisingly, in the states that do offer this cost-saving measure, many businesses do not take advantage of the opportunity either through a lack of knowledge of the option or not understanding the cost-savings this offers.
There are specific rules set forth by each state with regards to the specifics of a predominant use study. In Texas, the rules are different from other states. It is important to work with a company to complete the study that is familiar with Texas requirements.
Who can do the study?
In Texas, a registered engineer or someone with an engineering degree from an accredited college offering engineering must complete the predominant use study. Other states do not have this requirement. Many companies with locations in multiple states fail to notice this difference until the study is completed, the documents are filed, and the application is rejected.
What types of companies or businesses qualify?
The state determines the type of businesses that quality for a utility tax exemption. These include processing facilities, manufacturing companies, mining companies, homeowner associations, multifamily buildings and residential apartments, and other specialized types of exempt organizations and businesses.
Completing the predominant use study and generating the required report is the first step. The application and study are then sent for state approval, with refunds files with the utility provider based on the state allowance.
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