Qualifying Activities and Utility Tax Exemption
A common requirement for utility tax exemptions is the ability to show your business participates in qualifying activities. Every state has its own list of these activities, but many lists include manufacturing, agriculture, long-term housing, and non-profit work. States ask companies to determine how much of their utility use goes toward qualifying activities when they apply for utility tax exemptions.
Predominant Use and Utility Tax Exemption
When the majority of a company’s utility use goes toward a qualifying activity, such as manufacturing, it’s referred to as predominant use. Predominant use is the one basic qualification most states require companies to prove to be eligible for a utility tax exemption.
Calculating predominant use is completed through a predominant use study, often with the expert help of a utility management company such as SM Engineering. Working with a utility management company helps ensure you calculate your utility use correctly and accurately. Our certified energy managers, under the guidance of a professional engineer, conduct comprehensive predominant use studies to secure the highest exemption levels and lowest exposure to risk.
Financial Disclosures and Utility Tax Exemption
Finally, some states require companies to comply with certain financial requirements to qualify for a utility tax exemption. SM Engineering can help you understand the financial reporting requirements in your state.
Armed with correctly applied predominant use studies, thousands of companies are qualifying for utility tax exemptions and saving thousands of dollars every year. When are you going to start saving on your utility bills? Contact SM Engineering today to schedule your no-cost, no-obligation consultation.
