Qualifying for Tax Exemption with a Predominant Use Study in Indiana

Did you know you could save money on your utility bills if your business qualifies for a sales tax exemption through a predominant use study in Indiana? This study looks at the amount of energy your business uses to run qualifying equipment. Understanding the rules can help you determine if you should book a study to start saving money on your business operations.

What Does the Tax Code Cover?

The first step is understanding what the Indiana tax code covers to determine if your business may qualify for tax-exempt status. In general, companies that manufacture, process, or fabricate tangible personal property for their customers can qualify for tax exemption on their utility bills. Companies must meet a minimum of 50 percent of their energy use to qualify, but there are options available for partial credits if your energy use is below 50 percent. You can even backdate your exemption up to 36 months to save even more on bills you already paid.

Qualifying for Your Exemption

If you think your business qualifies for tax-exempt status on your utility bills, the only way to find out for certain is to complete a predominant use study in Indiana. During the study, the company you choose will monitor your energy usage as it applies to qualifying processes and equipment. They will then average the amount you spend over a year to determine whether your usage is more than the required 50 percent. If it’s less than 50 percent, they will help you determine whether you are eligible for partial credit.

How Much Will You Save?

A predominant use study in Indiana isn’t concerned with your precise usage percentage. Instead, the goal is to hit a target of more than 50 percent eligible use. If you reach that mark, you will qualify for 100 percent of your sales tax removed from your bills, providing you with significant savings on your business operations.

Resource Box: If you need to schedule a predominant use study in Indiana, visit the B. Riley Financial website to learn more.