Predominant Use Studies

Are You Overpaying Sales Tax on Utilities?

Many states offer sales tax exemptions for utilities used predominantly in manufacturing processes. However, most eligible businesses either don't know about these exemptions or haven't properly documented their eligibility.

What Is a Predominant Use Study?

A predominant use study is an engineering analysis that determines what percentage of your utility consumption qualifies for manufacturing exemptions. This study creates the documentation needed to:

Claim ongoing exemptions from utility sales tax
File for refunds on taxes paid in previous years (often 3-4 years back)

Who Qualifies?

If your facility uses electricity, natural gas, or water in manufacturing, processing, or production activities, you may qualify. Common industries include:

Food and beverage manufacturing
Chemical processing
Metal fabrication
Plastics and rubber
Printing and packaging
Agricultural processing

Example: What Savings Look Like

Here's a representative example of what a typical qualified manufacturing client might experience:

Case Example: Mid-Size Food Processor

Facility Profile

Annual electric spend:$840,000
Annual gas spend:$320,000
State sales tax rate:6.25%
Study-determined exemption:78%

Results

Annual tax savings:$56,550/year
Refund (4-year lookback):$226,200
Total first-year benefit:$282,750

This example is illustrative. Actual results depend on your facility's usage patterns, state tax rates, and exemption qualification. We'll assess your specific situation.

Our Predominant Use Services

Initial Assessment – Determine if a study makes sense for your facility.
Engineering Study – Conduct the detailed analysis to document your exemption percentage.
Refund Filing – Prepare and file claims for previously overpaid taxes.
Ongoing Management – Ensure you continue to receive your exemption going forward.