PREDOMINANT USE STUDIES

Indiana tax code allows an exclusion sales and use tax on utilities used in manufacturing, processing, or fabricating tangible personal property. The company must complete a “predominant use study” that shows at least 50 percent of the utility is consumed by the business directly causes a physical change to a product.
The Indiana tax code also allows a sales tax refund for funds you have paid in the previous 36 months.  Even if the meter does not qualify under the 50% rule, partial exemptions are also available.

Who qualifies?

Any business making a retail transaction that uses electrical energy, natural or artificial gas, water, steam, or steam heat for use in manufacturing, mining, production, refining, oil extraction, mineral extraction, irrigation, agriculture, or horticulture.  This also applies to those engaged in recycling after December 31, 2011, and those engaged in processing, repairing, floriculture, and arboriculture after December 31, 2012.  Non-profits that use utilities to further their exempt purpose may gain exemption on utilities as well.

Examples:

  • Food processors of all types (restaurants, fast food, bakeries, etc.)
  • Machine shops
  • Powder coating
  • Printing shops
  • Farms
  • Not-for-profits

How much does it cost?

Studies are typically performed on a percentage of refund contingency basis. Although this is the preferred choice, some companies prefer a flat fee. We will agree on a fee structure that works best for your organization. Each meter of service must be gain exemption individually.

Who is a good candidate?

  • Re-metering or relocating processes within a plant
  • Change in utility vendors
  • Mergers, acquisitions, bankruptcies, or changes in ownership
  • New location, Expansion
  • Unaware of such exemption

Results!

We complete the necessary studies, forms and refund claims from start to finish ensuring you gain your proper exemption and refunds.  We remain current with the latest tax code as they apply.  Our process has translated into significant tax refunds and savings for the future for our clients.  Below are some examples:

$32,000

in refunds plus future savings

for a manufacturer in the automotive industry

$4,500

in refunds plus future savings

for a non-profit client

$3,000

in refunds plus future savings

for an equipment manufacturer

Who to Contact

Member
rswallow@whitinger.com
Direct Line: 765-284-3384 ext. 245

Ross specializes in tax consulting and compliance services for small businesses and individuals. He is also experienced in report services for the construction industry and retirement plans. Ross is a Certified Public Accountant (CPA) and a member of the Indiana CPA Society and the American Institute of Certified Public Accountants. He joined Whitinger & Company in 2006 and earned his CPA designation in 2007.