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Predominant Use Studies

In the state of Texas, companies that use more than 50 percent of their electricity in the manufacturing, processing, or fabricating of products for resale may apply for a sales tax exemption. The sales tax exemption applies to all electricity purchased through a single point of delivery as long as the electricity is predominantly used to manufacture, process, or fabricate the product. A Predominant Use Study is required to certify that more than 50 percent of electricity or natural gas purchased is used to perform the tax-exempt activities.

If your facility qualifies,  3E Energy will provide the documentation necessary to apply for the sales tax exemption.

Our professional engineers will perform a thorough audit of your facility including:
    • Review existing electrical and gas service and utility metering for your site
    • Perform an on-site inventory of all existing electrical or gas operated equipment at your facility
    • Communicate with your facilities personnel concerning plant operation and equipment utilization
    • Gather and review past monthly electric and gas usage for your site
    • Develop Predominant Use Study documentation
    • Qualify equipment as tax exempt or non-exempt
    • Prepare energy usage calculations based upon equipment run-hours, loading, and nameplate data
    • Prepare a Predominant Use Study document summarizing the percentage of electricity and gas used in the manufacturing process including a list of equipment
    • Provide a Sales Tax Exemption form and help coordinate processing the forms necessary to apply for sales tax exemption and request for refunds if appropriate.

Benefits

    • Cost Savings - If your facility qualifies, you will no longer be required to pay sales tax on electricity or gas purchased at your site. Also, your business may qualify for a sales tax refund for up to the previous four years, if sales taxes were paid during that period and your business would have qualified for an exemption.
    • Documentation - We will provide the necessary documentation to support your claims in the event your business is audited by the state of Texas

 

Contact bob.jones@3eenergy.comkevin.brosette@3eenergy.com, or mark.pavelka@3eenergy.com  for more details