Does your business qualify for a sales tax exemption on the energy you use? A predominant use study in Texas can determine if your business qualifies and help you save money on your operating costs. If you’re getting ready for this study, it’s essential to understand what you should expect to ensure you get the high quality of service you deserve.
Check Your Entire Power Draw
It’s essential to work for a company that considers your company’s full power draw in their predominant use study in Texas. According to Texas tax exemption laws, a business must use at least 51 percent of its energy for manufacturing or other processes relating directly to its operations. An experienced evaluator will understand which processes qualify under the law and provide you with a detailed estimate of the amount of energy used by each aspect of your business. This information is invaluable in qualifying for a tax exemption certificate for the state and local governments, allowing you to pay less for your energy.
Because the weather varies and some companies complete more work seasonally, a predominant use study in Texas should consist of a 12-month average for energy use to compensate for these seasonal differences. Completing this study based on one month’s use won’t provide the full picture, potentially meaning you don’t qualify for the tax exemption. Be sure the company you use for your study considers the long-term average for your energy use.
How Often Do You Need a Study Done?
A predominant use study in Texas doesn’t expire, but you must keep it updated as your business grows and changes. If there is a significant change in your energy use due to any reason, you will need a new predominant use study to protect your tax-exempt status.
Resource Box: If you need a predominant use study for your Texas business, visit the B. Riley Financial, Inc. website to schedule an appointment.