There are several times when a predominant use study should be used in any qualifying business. In general a predominant use study in Pennsylvania is used by a business in the processing, manufacturing, or production industries to prove the business is eligible for a utility tax exemption.
Each state is responsible for setting the specifics of the predominant use study in their jurisdiction. This includes what types of operations or businesses qualify, and how the specific utility exemption operates for electricity and natural gas.
Unlike some states where the predominant use study is used to determine if the meter does no does not qualify, Pennsylvania allows for a percentage of a meter to qualify. In other words, the qualifying percentage of energy use on a given meter is the same percentage of utility tax exemption on that meter.
New Business Purchase
After purchasing a qualifying property or company, a predominant use study in Pennsylvania is a wise decision. This is particularly important if any of the devices and equipment on any meters were moved, no longer in use, or if the production, processing, manufacturing or other activity of the business has changed.
Renovations and Retrofits
Exiting businesses may also require a new predominant use study in Pennsylvania if there are substantial changes to the equipment, systems, or use of the facility. New meters added in any type of expansion require an predominant use study to accurately assess the utility tax exemption on the meter.
For questions about the timing of a predominant use study in Pennsylvania, talk to the experts at B. Riley Financial. More details can be found at brileyfin.com.