One of the benefits available to manufacturing and other qualifying types of companies in Pennsylvania is a partial tax exemption on utility usage. This includes electricity and natural gas. Each meter is tested individually and determined to qualify for exemption based on the findings of a Predominant Use Study.
The specific qualifications for the tax exemption are set forth in the Sales and Use Tax Bulletin 2010-01. The bulletin includes information on the businesses and qualifying utility use eligible for the tax exemption, the specific usage considerations, and the process used to claim the exemption.
The Process
Most companies hire a specialized third-party service to complete a Predominant Use Study. The study is very comprehensive and requires an accurate evaluation of the annual utility use for each meter on the property. The precision of the study is essential for the business to receive the correct tax exemption.
The study looks at all devices and equipment using the utility through the meter. Each device is either qualifying or non-qualifying based on the guidelines set forth by the government of Pennsylvania. This information is used to determine if the meter is predominantly used for qualifying devices and equipment. In turn, this determines the percentage of the utility exempt from taxation.
The state allows for a refund of any sales utility sales tax paid in error over the past thirty-six months. The Predominant Use Study contains this information and also establishes the percentage of exemption for the business going forward.
To schedule a Predominant Use Study in Pennsylvania, call on the experts at Business Name. For more information, see us online at Website URL.
