Utility Sales Tax Exemptions
A predominant use study can potentially lead to a partial or total state and local sales tax exemption.
Roughly 30 states allow manufacturing and agricultural companies to reduce or entirely exempt sales tax on electricity and natural gas purchases. These states may also exempt residential use areas of nursing homes, retirement homes, hotels, senior living and assisted living facilities. A predominant use study, also known as a utility sales tax exemption, is an evaluation of an organization’s electric and natural gas consumption that can potentially lead to a partial or total state and local sales tax exemption.
Eide Bailly can advise customers if they qualify for such a sales tax exemption, conduct the state-mandated on-site study, compile the comprehensive report and file the proper forms with the state and with the utility companies, as required. In many cases, after completion of the study we can even recoup past years’ overpaid sales tax, as far back as three to ten years depending on the state.
Tax News & Views
Predominant Use Study Map
Industries That Qualify
The following industries may qualify:
- Manufacturing and fabricating
- Agricultural and horticultural
- Nursing homes, senior living and assisted living facilities, hotels and retirement homes (residential use exemption)
What to Expect When You Work with Us
Dealing with the vast complexity of state tax laws requires experienced professionals with broad backgrounds and experience in state and local tax.
Eide Bailly’s state and local tax team brings years of combined experience advising companies of all sizes with a full range of state tax consulting needs. Our approach, which utilizes our experience as former state Department of Revenue auditors, is to focus on not just the problems, but solutions to those problems.
Utility Sales Tax Exemptions Leadership