Businesses receive tax-exempt status for many things as long as they can prove they qualify. One tax exemption you may not be taking advantage of is saving on the taxes you spend on your utilities. Some companies can receive a tax-exempt status that can save money on the energy they use. However, you will first need to complete a predominant use study in Michigan.
Schedule Your Study
If you think your company qualifies for utility sales tax exemption, the first step is to schedule a predominant use study in Michigan. The company you choose will set up the appropriate equipment and monitor energy usage for all of your meters as it relates to qualifying equipment. They will then use that information to calculate your average usage over 12 months to give you the maximum allowed benefit from your tax exemption.
File for a Refund
While a predominant use study in Michigan is primarily designed to help you save money on your utility bills going forward, it can also be used to file for a refund for the sales tax you already paid. In Michigan, your study will qualify you to request a refund dating up to 48 months before your study. This refund can provide significant savings for your business based on your current usage rate.
Revising Your Study
After you complete your predominant use study in Michigan, you may need to request a new study later to ensure you’re claiming the appropriate amount. For instance, if you add equipment to your business or change your processes, you should schedule a new study to re-evaluate your qualifying energy use.
Resource Box: If you want to claim tax-exempt status on your utilities, visit the Business Name website to schedule your predominant use study in Michigan.
