Sales Tax Audits

As a customer advocate, we minimize tax obligations and maximize restitution, through “Predominant Use Studies”. A “Predominant Use Study” is based on the Texas Comptroller’s Office tax codes (TAC Title 34, Part 1, Chapter 3, Subchapter O, Rule 3.295), which requires such a filing to qualify a facility for state and local sales tax exemption on electricity and natural gas billings.

 List Of Qualified States

A certified engineering study, provided by an independent engineering firm, will determine the electricity and gas consumed vs. total usage in the facility. Each electric and/or gas meter at the facility must be studied independently to determine its eligibility for tax exemption. If it can be shown that more than 50% of electricity and/or gas passing through a particular utility meter are used directly for tax exempt purposes, then the entire usage through that meter is tax exempt. Texas sales and use tax rates up to 8.25% of electricity and/or natural gas billings can be reduced significantly by eliminating this tax at eligible facilities.

 

Benefits to You

  1. Expenses – No out of pocket costs.
  2. Cost Savings – If your facility qualifies, you will no longer be required to pay sales tax on electricity and/or gas. In addition, your business may qualify for a sales tax refund for up to four years.
  3. Documentation – Texas Tax Consultants will provide the required documentation to support your claims in the event your business is audited by the State.

 

Frequently Asked Questions

  1. What types of facilities and operations in Texas qualify for energy sales tax exemption?
    • Manufacturing Operations of all types, including fabrication, assembly and/or processing, and all sizes of operations from small shops to large industrial facilities. For example: print shops, wood, clay plastic products, pharmaceutical, medical device, electronics semi-conductor plants, machine shops, chemical plants refineries, steel and textile operations, audio video recording production, and a vast array of other manufacturers;
    • Food Beverage Processors and Bakeries (sub categories of manufacturing);
    • Nursing Homes, Alzheimer Units, Assisted Living and Retirement Facilities (residential exemption);
    • RV and Mobile Home Parks where the average tenant stay exceeds 30 days (residential exemption);
    • Apartment Complexes Buildings and Condominiums (residential exemption);
    • Agricultural and Horticultural operations (including irrigation, feedlots, animal food processing, fruit and vegetable growing processing, and plant nurseries);
    • Golf Courses (for electricity used in pumping irrigation water and charging golf carts);
    • Repairs to railroad “rolling stock”, jet aircraft engines, and national defense related “platforms”; and
    • Oil, Gas, and Mining operations.
  2. What is the cost?
    • Our fees are calculated on a percentage of the tax recovered from the State. We believe this type of arrangement is appropriate since fees will be based solely on restitution with no out of pocket expense.
  3. What do we need to get started?
    • A signed engagement agreement;
    • Your utility company may require a limited power of attorney; and
    • A copy of your utility bill(s).

Want help with your business?