Throughout the United States, different states have enacted programs to assist businesses in reducing the cost of operation. In Missouri, qualifying businesses in specific industries can reduce or eliminate its utility sales tax exemptions through a predominant use study Missouri.
The Basics
A predominant use study is a very specific and detailed report about the use of natural gas and electricity in a qualifying business. This report is based on each meter in the facility and includes a full analysis of how the utility is consumed and if the end-device or use qualifies as processing or non-processing.
For example, electricity from a meter may be used to run a microwave in the breakroom, which is classified as non-processing, and does not qualify for the tax exemption. The same meter may also supply electricity to a robotic welding system, which would qualify as processing.
Through the detailed report, a percentage of use is determined for the meter. This percentage serves as the percentage reduction in utility sales tax exemption moving forward. At the same time, the business can apply for a refund of past utility sales tax exemptions paid.
When to Consider a Study
A predominant use study is the first important step for a new business to obtain utility sales tax exemptions. However, if a business adds production capacity, makes significant changes in operations, or restructures the processes, repeating the study is essential. In some cases, the state of Missouri may require an updated study if there are significant changes to the business.
To complete a predominant use study on a new or existing company in Missouri, turn to the professionals at Business Name. Details on our services can be found at Website URL.
