Businesses are always looking for the best ways to save money and increase their profits. One way companies can accomplish this goal is by completing a predominant use study. This study can let a company know whether they qualify for a sales tax discount on the energy they use to run their business. Before you schedule your study, it’s valuable to understand what it is and how it can help.
What Is a Predominant Use Study?
During a predominant use study, qualified professionals will measure your precise energy usage relating to qualifying equipment you use for your business. The results of this study will provide you with a discount on the sales tax you pay for your utilities. In some states, this tax exemption is an all-or-nothing deal and requires more than 50 percent of your energy to go toward qualifying machines. Other states apply an exemption to a percentage of your utility bills relating to the percentage of energy used by qualifying equipment.
Check Requirements for Your State
Not all states provide utility tax exemptions for companies. The states that do accept a predominant use study for tax exemptions have unique requirements that only apply to companies within that state. For this reason, it’s critical to explore the rules for your state to determine if it’s worth completing a study.
Should I Hire Professionals?
You should always hire professionals for the study to ensure the best results and to give you the documentation you require to qualify for the exemption. A professional company is essential for a predominant use study because they are the most familiar with your state’s rules and which equipment qualifies. They can also answer your questions and help you file for the exemption with your utility company. Their team will also recommend the frequency of new studies to maintain your exempt status.
Resource Box: If you need a predominant use study for your business, visit the B. Riley Financial website to schedule your study.