Generally, if energy is used in the manufacture of goods, then all or a portion of that energy may be exempt from sales tax. In order to claim the exemption, local utility companies and third-party energy suppliers typically require proof of the exemption in the form of a predominant use study. This is a formal study prepared by a qualified engineer. Armed with this predominant use study, SPEP™ is typically able to recoup up to three years of past sales tax (each state will vary) payments from the local utility or third party energy supplier.
Program Summary in Texas
A Predominant Use Study determines if more than 50% of the energy of each company meter is expended on services eligible for sales tax exemption on the electric bill. If the qualifying usage is over 50%, then the whole bill is eligible for the tax exemption up to the previous 4 years.
Benefits
- Exempt Status from Sales Tax on Electrical Usage
- Refund sales taxes paid up to the past 48 months
- Identifies major energy consuming equipment
- Energy consuming equipment is profiled and quantified
Scope of Services
- In order to determine if a company is eligible, SPEP™ will perform an on-site evaluation of the facility.
- SPEP™ utilizes trained, insured personnel to undergo the assessment and obtain the necessary information at the facility.
- Every predominant use study will be reviewed and sealed by a licensed, registered in the state of Texas, Professional Engineer.
- SPEP™ provides a Predominant Use Study Report with the engineer’s Texas seal to certify the study.
- SPEP™ submits all necessary documentation to the state of Texas for approval.