Many facilities and businesses throughout the country are not taking advantage of the opportunity to receive sales tax exemptions on utility use. In all states, the first step is a predominant use study. Missouri businesses typically find that completing a study offers both an immediate reduction in qualifying utility sales tax reductions as well as the potential to earn a significant refund for past taxes already paid to the utilities.
The Basics
A predominant use study in Missouri is completed by a third-party company specializing in these types of assessments and reports. This is the best way to ensure the analysis and data required by the state are included in the report.
The company will provide the engineers and technicians required to trace the use of each utility on a per-meter basis. The team will use the state criteria to determine if the end-use qualifies for the exemption. Based on the qualifying use of the utility on the individual meter basis, a percentage of the sales tax is reduced.
Unlike many states, the predominant use study in Missouri includes water, as well as electricity and natural gas. This addition can add to your future operating cost reductions.
The Refund
While the predominant use study will reduce the amount of sales tax in the future based on the qualifying percentage per meter, it also provides the company with the ability to claim a refund. Based on the data found in the predominant use study, the company can claim that percentage as a refund for up to ten years. This typically results in a significant payment to the business, which usually covers the cost of the predominant use study and beyond.
If you have questions about the value of a predominant use study in Missouri, give the team at B. Riley Financial a call.
