Why Conduct a Predominant Use Study?

by | Jul 21, 2022 | FInancial Service

A predominant use study is a helpful tool for organizations that want to save money. It is a way to evaluate how much electric and natural gas the company is using with the goal of determining if the organization qualifies for a state or local sales tax exemption. For many organizations, it can be a profitable move.

What Does It Do?

A predominant use study determines if companies or organizations qualify for a sales tax exemption. Those that do may receive a future tax example status as well as being eligible to recover any past sales tax expenditures that may be applicable.

Currently, there are about 30 states that have a law in place that enables businesses to qualify for this status if they have this study completed. If the study shows that your electric and natural gas usage qualifies (at 50 percent or higher), then the sales tax exemption status is put in place.

Common Industries

A number of industries may qualify for this exemption. That includes manufacturing and fabricating, RV parks, mobile home parks, some condo and apartment complexes, food and beverage processing companies, assembly factory, nursing homes, and agricultural and horticultural uses. These are just a few examples.

The requirements for the predominant use study qualifications vary from one state to the next. Yet, in every situation, when a business or other organizations qualify for it, it can be a lucrative opportunity to reduce costs otherwise incurred. Seek out the help of an organization to conduct this study to learn if you qualify. When looking for a predominant use study, then B. Riley Financial, Inc. can be a great option for you as they have team that you can rely on.

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