Get answers to most common predominant use study questions here.
Is a predominant use study required and what happens if I do not have a predominant use study?
Answer: For most States, if a taxpayer is claiming a utility sales tax exemption for an electricity, natural gas, or water meter and does not have a predominant use study for each meter exempted, the taxpayer may be reassessed the utility sales taxes limited to the statute of limitations for the State the facility is located. The statute of limitations is typically 24 to 48 months depending on the State where the facility is located.
How long does it take to have the study completed?
Answer: Typically, once the associated paperwork has been received, our technical staff will contact you to set an appointment to perform your study within a week or two. The amount of time in your facility is minimized since our associates have performed over 21,000 predominant use studies and will be familiar with the power draw for all of the common components such as lighting, computers, refrigerators, etc…. The raw data is compiled at our headquarters with proprietary software to further minimize time in your facility.
How long does it take to have the sales taxes removed and refunded?
Answer: The sales taxes are typically removed from your utility invoices by your next billing cycle from the time the study is completed. The refund time will vary from provider to provider and whether or not State agencies are involved. (If the State agencies are not involved in processing, typically 30 to 60 days from the time the predominant use study is performed; if the State agencies are involved in processing, typically 3 to 6 months.)
Will performing the predominant use study disrupt our production?
Answer: Our technicians go to great lengths to not disrupt production. No equipment will need to be turned off or on and no one will need to start or stop working during the study. It is preferred that the technician experiences normal day to day activity during his site visit.
How much does a predominant use study cost?
Answer: Pricing is subject to scope of work needed for a facility (number of meters to be studied, location of meters, size of study(s), amount of processing needed, likely need for defense of study, etc.). 99% of our clients prefer our no-risk pricing structure where there is no up-front out of pocket expense, no charge for meters that do not qualify, and no charge at all if none of the meters qualify at the facility. We simply participate in a portion of the refund we recover on your behalf. We can also accommodate other pricing structures if desired. Regardless of pricing structure, we also handle the defense of the predominant use study at no additional cost to ensure you not only get the exemption and refund; but to ensure you get to keep it thus removing the legal risk too. Contact us for a competitive no-obligation quote or Call 346-241-0100 or Toll Free 844-767-0037.
Will this exemption cause an audit?
Answer: This exemption is just like any other raw material exemption that you may already be taking with the exception that it normally requires an engineer-certified predominant use study as proof of qualification on a per-meter basis (not per location). Many States offer exemptions in an effort to attract new business and retain existing business so it will not cause an audit or any other activity from the State agencies. Should any agency choose to review our predominant use study prior to releasing the refund, we will handle the defense of the predominant use study at no additional cost.
What happens if the predominant use study is rejected?
Answer: If you have previously had a study rejected, contact us for a no-obligation consultation. The rejection may have been based on any one or more of these areas: non-qualified business model, improper format, inaccurate/incomplete content, not balanced with history, not certified by an engineer from an accredited college of engineering, or maybe the study was done correctly; but nobody was there to defend the study. If National Utility Solutions performed your study, contact us since we also handle the defense of our predominant use studies at no additional cost and will honor our guarantee that our study is valid per the various State regulations if we are given the opportunity to defend our study.
Can we do the predominant use study ourselves?
Answer: Our clients appreciate the importance of having a professional company represent them in legal matters, eliminating work force complications, and handling sales tax issues. Although taxpayers do have the opportunity to represent themselves in sales tax matters, our clients realize the exemption(s) may become a tax liability if the predominant use study(s) are not done correctly and their refunds can be drastically delayed (and possibly reduced) if the processing is not done correctly. Your work can be reduced to making copies of electric and/or natural gas bills while our technicians, professional engineer, and processors take care of the rest. If the person performing the predominant use study is not very familiar with the laws for your State pertaining to this exemption or is not able to defend the study with the auditor, more often than not, a tax liability will be created instead of an exemption.
What happens if we do not qualify?
Answer: There is never a charge for our services for meters that do not qualify for the sales tax exemption. Since each meter must stand on its own merits, it’s common that a facility that has multiple meters have some that meet the criteria and some that do not. If no meters qualify, we will shake your hand and thank you for the opportunity with no charge at all.
Do predominant use studies expire?
Answer: For most States, the predominant use studies do not expire but may need to be updated from time to time when significant changes are made to the facility or the business model. Some States do require the studies are updated every few years. Contact us for information regarding what to do if your predominant use study is still valid but you see sales taxes re-appear on your utility bills to avoid problems with your State agencies in the future.
How much can I expect my refund to be?
Answer: The refund will be based on the length of time the meter(s) have been on sales tax at a particular location, which State the facility is located, and their respective statutes of limitations. For example: in Texas, Maryland, and Wisconsin there is up to a 48 month refund of State, City, County, MTA, and Special sales taxes paid in error where most other States will be limited to 36 months of those taxes.