Many states provide businesses with various tax exemptions to reduce their operating costs and tax liabilities. One such tax exemption available is a utility tax exemption. Before you can qualify for this exemption, however, you need to conduct a predominant use study in Wisconsin. The following are a few things you should know about this study.
A Study of All Usage
One of the most critical things to know about a predominant use study in Wisconsin is both exempt and non-exempt utility usage is factored into the calculation to ensure better accuracy. When only exempt usage is considered, it often leads to a biased result and can be less accurate than looking at the overall energy usage. When conducted correctly, these studies are often within half a percent of accuracy.
Identify Qualifying Uses
When you file for a utility tax exemption, it’s essential to note that not all energy use related to your business will qualify. When you hire a company to perform a predominant use study in Wisconsin, they will use a strategic approach to determine which percentage of your energy use qualifies for exemption. In general, the equipment used to produce the products or services you provide to your customers will qualify. However, other equipment may also qualify if it meets specific requirements.
Past Usage May Qualify
In most cases, when you complete a predominant use study in Wisconsin, your past energy usage can also qualify for tax exemption. After compiling data and determining the percentage of your utility bills that qualify for the exemption, this amount can be applied to your bills dating back up to 48 months, providing your business with significant savings.
If you need to schedule a predominant use study in Wisconsin, visit the B. Riley Financial, Inc. website to learn more.
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