UTILITY SALES TAX EXEMPTION SAVINGS
- 31 States Exempt Sales on Utilities When the Utilities are a Necessary and Integral Part of Production!
- Provided as an Incentive to Encourage Manufacturing and Production Within a State
- Qualifying Utilities are Electric, Natural Gas, Water, Steam and Industrial Gases.
- Straight-forward Savings Determination.
- Recovery for Past Periods Possible.
Determine If You Qualify for Utility Sales Tax Exemptions
Recent Utility Sales Tax Exemption Case Results…
A Midwest dairy farm spanning 30,000+ acres with 77 utility meters was unknowingly overpaying on energy taxes. The farm secured a huge one-time refund and perpetual savings on future bills by identifying utility exemptions for manufacturing use
The Results
- $824k Massive One-Time Refund – Recouped years of overpaid utility taxes!
- $333k Annual Savings in Perpetuity – permanent tax exemptions!
The Challenge
- Complex Utility Setup – 77 meters across multiple operations
- Unclaimed Utility Exemptions – Energy used in manufacturing processes qualified for tax exemptions, but the farm hadn’t applied
- Rising Operational Costs – High energy expenses were cutting into profitability
Which States are Eligible?
In the 31 orange states below, when utilities are “necessary and integral to production” a company does not have to pay utility sales tax. If you are in an orange state in a qualifying industry and you are paying sales tax on your utilities - you shouldn't be! We can help.
Frequently Asked Questions
What industries qualify for the exemption?
- Manufacturers
- Industrial Processors
- Recyclers
- Automated-Assembly Fabricators
- R&D Facilities
- Agriculture
- Mining Facilities
- Restaurants (select states)
- Nonprofit Organizations (select states)
Which utilities are included in the exemption?
- Electric
- Natural Gas
- Water
- Steam
- Industrial Gases
How much can we expect to save?
Expected savings depends on the state in which the facility is located.
Some states have what is called “Predominant Use” exemption. This means that as long as a certain percentage of the utility is used in production (typically 50% or 75%), the entire meter is fully exempt from sales tax.
Some states have a “Percent of Use” exemption. This means that however much the utility is being used in production, the sales tax on the meter is reduced by that percentage. For example, if our engineering study determines that the meter is used 65% in production, the monthly sales tax is reduced by 65%.
Under either scenario, the savings can be substantial. Our technical experts can determine with accuracy the exemption for which your facility will qualify.
The Utilities Sales Tax Exemption is just one of our tax planning tools.
Here’s how our exemption study process works.
Estimate Savings
Our energy consultant team will quickly provide an estimate of tax savings based on a few of your utility bills
Engineering Study
We tour your facility. Through our engineering study, we determine what portion of production will qualify for an exemption
Submit Forms
Align submits all state-required exemption forms. We also work directly with the state for any questions or in the case of an audit
Save Money
Once approved, your business will either reduce or eliminate monthly utility sales tax payments. In many states, this is a permanent exemption!
Tailored Tax Strategy
Next, I design a personalized tax strategy that maximizes deductions, minimizes tax liabilities, and ensures compliance with the latest tax laws. My goal is to help you save as much as possible while reducing stress around tax planning.
Quarterly Reviews
We provide quarterly reviews to track progress, make adjustments, and ensure that your strategy remains effective. This proactive approach keeps you ahead of any changes and ensures that your financial plan stays on track
Ongoing Year-Round Support
Our support doesn’t stop there! We offer year-round guidance, alerting you to any tax law changes and refining your strategy as needed. With my ongoing support, you’ll always be informed and ready for any tax challenges ahead.
WE REVIEW FOR APPROXIMATELY 1,500 TAX PLANNING OPPORTUNITIES
Below are Just a Few of the Broader Tax Recovery Opportunities That We Review
Cost Segregation
Our Cost Segregation Specialists would identify and reclassify assets. Our results are unmatched; we typically reclassify up to 40% of our client’s assets, providing significant tax savings
Entity Structuring Review
Entity structuring analysis is the process of evaluating how an organization or business is structured. The structure a business chooses at the beginning of its existence will determine its legal obligations, tax burdens, financial operations, strategic planning, and operational processes.
Overlooked or Underutilized Deductions
Our income tax professionals review past returns, looking for missed opportunities. We have a vast database of the typical deductions broken down by industry to determine if the client utilizing ALL available deductions.
Review Accounting Methods
Federal Tax Accounting methods determine the timing of revenue, expenses, and treatment of inventory and fixed assets for tax purposes. Our income tax professionals conduct reviews of current accounting methods that can aid in planning to meet a taxpayer’s needs, whether to accelerate expenses to reduce taxable income and potentially create a net operating loss (NOL) or allow deferral of expenses in some cases where a taxpayer may wish to increase taxable income for credit utilization.
Fixed Asset vs. Repairs Review
Proper management and classification of fixed assets are critical to an organization’s tax management and compliance objectives. Improper capitalization of fixed assets can substantially negatively impact an organization’s balance sheet, resulting in missed tax savings and added compliance risks.
Our Fixed Asset Review Service provides a comprehensive analysis of fixed assets to determine current asset classifications, ascertain depreciation reported in prior tax returns, and identify potential asset reclassification to ensure every appropriate tax deduction available is claimed.
Tax Credits and Incentives Review
Our tax credit specialists will look for credits and incentives such as the Federal and State Research and Development Tax Credit (R&D), Work Opportunity Tax Credit (WOTC), Section 45L, Section 179D, Energy Investment Tax Credit, Disaster Zone Employment Retention Tax Credit, Federal and State Employment Zones Tax Credit, Differential Wages Tax Credit, FICA Tip Tax Credit, Small Employer Retirement Plans Startup Costs Tax Credit, and Small Employer Health Insurance Premiums Tax Credit. As opposed to deductions, tax credits are actual dollar-for-dollar federal and State credits available to businesses of any size. Many companies are unaware of the broad scope of activities that qualify for these credits. Evolving statutes, IRS regulations, and court cases continue to credit credit and incentive programs for an ever-widening range of qualified businesses.
Allow Us to Determine If You Have Substantial Overpaid On Utility Sales Taxes
AND GET YOUR MONEY BACK AND STOP OVERPAYING!
What Our Clients Say
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