Everyone pays sales tax on their utilities. However, some businesses can qualify for tax-exemption status to remove a portion of these taxes based on the amount of energy used for qualifying equipment. To qualify for tax-exempt status, you will need to complete a predominant use study in Wisconsin through a certified company. This study will determine the percentage of your utility used for qualifying equipment.
Energy Consumed for Production
A predominant use study in Wisconsin determines the amount of energy consumed for products, particularly in manufacturing and agriculture. All meters in your business must be part of the study, providing a clear picture of your overall qualifying energy usage. This amount is used to determine the percentage of the sales tax you are exempt from paying and can be backdated up to 48 months before your study, qualifying you for a refund.
A Thorough Process
Accuracy is key when you’re conducting a predominant use study. As you search for the right company to complete your study, ask about their margin of error to ensure you don’t overclaim your tax exemptions. Claiming too much usage beyond what you use for qualifying processes can lead to significant costs if you face an audit.
Renewing Your Tax-Exempt Status
When you complete a predominant use study in Wisconsin, you will need to complete a new one every few years to maintain your tax-exempt status. This renewed study will ensure you are still claiming the appropriate amount. However, if your business changes before you are due for a new study, you can request one to make adjustments immediately.
Resource Box: If you need a predominant use study in Wisconsin, visit the B. Riley Financial website to learn more about their process.