Indiana law has a provision that allows certain businesses to file for utility sales tax exemptions depending on their energy use. Companies must complete a predominant use study in Indiana to qualify for the exemption. Understanding the process can help determine if you can benefit from requesting one.
The Tax Code
A predominant use study in Indiana analyzes a business’s energy use and determines whether they qualify for a utility sales tax exemption under state law. This law states that utilities used for fabricating, manufacturing, and processing tangible personal property qualify for tax exemption. Companies with more than 50 percent of the energy used on qualifying processes receive a complete exemption, while those under 50 percent may receive a partial exemption.
Who Qualifies
If your business conducts retail transactions that use electricity, natural gas, water, steam, and more, you should request a predominant use study in Indiana to take advantage of tax exemptions. Changes to the law also open the exemptions to companies engaging in recycling activities. Nonprofits may also qualify.
When to Request a Study
Some companies are unsure when to request a predominant use study in Indiana. If a business hasn’t received it, it’s best to get one as soon as possible to avoid missing critical savings. Other situations also warrant requesting an analysis to maximize savings. You should get a new study if you move locations, change equipment, change utility vendors, or expand.
If you need a predominant use study in Indiana, visit the Business Name website to learn more.
