A predominant use study is an effective way for Indiana businesses and companies involved in manufacturing or processing to recoup a percentage of their utility costs through a utility tax refund. The amount of the refund is based on detailed findings from these studies, which should include supporting documentation, data, and detail about how your company’s actual use compares with its predominant usage.
Future Exemptions
The only way for a business to be able to qualify for any utility tax exemptions is through a predominant use study in Indiana. This study is conducted on standards set by the state. It provides a consistent formula for all qualifying businesses to determine the level of exemption they are eligible to receive.
A predominant use study in Indiana study is typically done by a third-party provider. Trained technicians and engineers complete these studies to determine the percent of each utility used by every device on the meter. They then document if the use falls under the exception. Indiana uses a percentage basis, so if 40% of the use of the electricity was by qualifying equipment and processes, the tax exemption for that meter would be 40%.
Refunds on Past Utility Taxes
A predominant use study in Indiana can help a qualifying business save money by allowing manufacturers or processors to recover some portion of the amount they have paid on utility taxes in the past. In Indiana, this lookback period of the statute of limitations for a refund for utility taxes paid is thirty-six months.
If a meter is found to have less than fifty percent usage, a refund is not possible. However, the future tax exemption is still available.
