Manufacturing facilities consume substantial amounts of electricity, natural gas and other utilities. In many states, utilities used in qualifying manufacturing and production activities may be partially or fully exempt from sales tax.
Yet many manufacturers continue paying sales tax simply because an available exemption was never established, the required analysis was never performed, or their operations have changed over time.
TC Specialists helps manufacturers identify these opportunities, recover qualifying sales taxes paid in prior periods, and establish the appropriate tax treatment going forward.
Utility sales tax rules vary significantly from state to state.
Eligibility can depend on how a state defines manufacturing, which processes qualify, how utilities are consumed throughout a facility, and whether a technical analysis or predominant-use study is required.
A facility may use the same utility for production equipment, refrigeration, compressed air, lighting, HVAC, offices, warehouses and other functions – with different tax treatment potentially applying to different portions of that usage.
Determining the opportunity requires more than reviewing a utility bill. It requires understanding how the facility actually operates.
Our goal is to make a potentially complex recovery process straightforward for the client.
We review your facility operations and utility accounts to determine whether a meaningful opportunity may exist.
With authorization, TC Specialists can work directly with utility providers to obtain the historical billing information required for the analysis.
Where required, we coordinate the appropriate analysis of utility usage, including predominant-use studies and engineering certifications, to determine the qualifying portion of consumption.
Where permitted, we prepare and pursue refund claims for qualifying sales taxes paid during available prior periods.
The opportunity doesn't necessarily end with the refund. We help establish the appropriate tax treatment going forward so qualifying savings can continue.
For manufacturing operations with substantial electricity or natural gas consumption, even a relatively small change in tax treatment can produce meaningful savings.
When several years of historical utility payments are involved, qualifying recoveries can reach significant five- or six-figure amounts, with additional savings continuing into the future.
The size of each opportunity depends on the facility, utility consumption, applicable state law and qualifying usage.
While manufacturing is a primary area for utility sales tax recovery, similar opportunities may exist for certain residential properties and other qualifying facilities.
For example, in New York State, certain residential apartment buildings may qualify for favorable sales tax treatment on utilities, potentially creating both refund opportunities for prior periods and savings going forward.
TC Specialists evaluates these opportunities based on the property, utility usage and applicable state requirements.
Food & Beverage Processing
Poultry & Meat Processing
Plastics & Rubber
Metal Fabrication & Foundries
Chemical & Pharmaceutical Manufacturing
Printing & Packaging
Wood, Furniture & Paper Products
Machinery & Automotive Components
Electronics & Technology Manufacturing
Textile & Apparel Manufacturing
And Many Other Production And Processing Operations.
If you're unsure whether your operation qualifies, our initial evaluation is designed to make that determination.
If your business operates a manufacturing or processing facility – or owns qualifying residential properties – and pays sales tax on significant utility usage, it may be worth taking a closer look.
A preliminary evaluation can determine whether an opportunity exists.
Request a Complimentary Evaluation