Not all businesses operating in Missouri qualify for the utility tax exemption offered through the state. In general, this program allows qualifying businesses in the manufacturing, processing, and producing industries to claim a utility tax exemption for qualifying use of water, natural gas, and electricity.
To qualify for the utility tax sales tax exemption, businesses must first complete a predominant use study. This can be done in-house, but it is typically more cost and time-efficient and effective to hire a specialized company to complete the study and submit all the required documentation.
A business will benefit from a predominant use study in at least three different ways. The study typically pays for itself and continues to provide the business with utility tax savings year after year.
Immediate Refund for Past Utility Taxes
Qualifying meters for water, electricity and natural gas allow the company to claim a refund from the respective utility providers. These refunds can include a percentage on all utility taxes paid over the past two to four years, resulting in a refund of thousands of dollars for the business.
Lower Utility Costs Moving Forward
Having the exemption on a percentage of the meter based on qualifying use is not just for the refund. It also eliminates that percentage of taxes for the meter going forward. The exemption saves the business money every month.
Increasing Efficiency Using the Analysis
The information from the predominant use study can also be used by a business in Missouri to determine any areas of inefficiency. Using more energy-efficient processes and equipment contributes to cost-savings over time.
For more details on the benefits of a predominant use study for your Missouri business, talk to the team at B. Riley Financial. More information on our studies can be found at brileyfin.com.