There are always differences in predominant use study requirements between states. However, most states have similar requirements. While there are similarities between a predominant use study in Texas and other states, there are also unique requirements.
When hiring a company to complete a predominant use study in Texas, it is important to hire a service with experience. The study must be completed to meet the level of documentation and proof as provided in the Texas Administrative Code Rule 3.295.
The 50% Rule
While this is not unique to Texas, it is important to understand. In Texas, if a meter has over 50% qualifying use of the utility, the meter will qualify for 100% utility tax exemption moving forward. The same meter also qualifies for 100% of the refund for the utility sales tax for that meter for the past 48 months.
In manufacturing, processing, and other qualifying industries, this can be a significant cost saving and refund. Choosing a predominant use study service that works on a contingency basis requires no upfront cost for the business to undergo the study and obtain the refund and exemption.
The Engineer Requirement
The Texas Comptroller requires that any predominant use study in Texas be completed by an engineer. This is unique to the Lone Star State, but it is an essential factor in selecting a company.
Ideally, look for a service that also offers a review by tax attorneys that are familiar with the laws and requirements of the state of Texas.
At B. Riley Financial, Inc. we offer the expertise and experience required to complete a predominant use study in Texas.