Companies and businesses in Pennsylvania in qualifying types of industries, including manufacturing, processing, and construction, as well as other specific types of businesses, can receive a utility tax refund and a future exemption through a predominant use study.
This is a process of collection of data on the use of electricity and natural gas. This data collection is completed in accordance with the state requirements for a predominant use study. The study involves determining the use of natural gas or electricity on every device off a given meter and determining if that device qualifies for the exemption. The number of qualifying devices and the use of the utility by those devices are calculated and reported.
The company can apply for a refund of past taxes paid on the utility, as well as future tax exemption, based on the results of the study.
What is the Amount of the Exemption?
In Pennsylvania, the utility tax exemption is based on the percentage of energy use by qualifying devices or equipment off the meter. Each meter is independently analyzed, and a study is completed to determine the qualifying percentage.
The percentage can change if the plant or facility is reconfigured, if new equipment is added, or if the company changes utility companies. Having the study done at those times ensures the business is maximizing the full exemption.
What is the Amount of the Refund?
The analysis completed in the predominant use study is also needed to apply for a refund from the utility providers. The refund time extends to 36 months in the state, which can provide thousands of dollars.
Many companies find the refund alone pays for the study, with the tax savings going forward helping to cut the cost of overhead going forward.
If you have questions about a predominant use study in Pennsylvania, contact the experts at B. Riley Financial. More details on our services can be found at brileyfin.com.
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