A Predominant Use Study determines the amount of water, gas, and electricity qualifying businesses can use as a tax exemption. The tax exemption status of the utility is assessed based on a very specific evaluation and analysis process determined by each of the 30 states using this process.
While many states have very similar requirements, a Predominant Use Study in Texas has some notable differences. The most important of these is who can complete the study. In Texas, only an engineer can perform the analysis. For this reason, it is practical for most businesses throughout the state to hire a specialized service for the initial study and any subsequent studies needed after operational changes.
Meter By Meter
As in all states, a Predominant Use Study in Texas is a comprehensive study of the utility use in a given facility. Each meter is individually assessed for energy consumption. The engineer completing the study will calculate the amount of the utility used by qualifying devices and processes as well as non-qualifying devices and processes. This is done at a time that limits any downtime throughout the facility.
Additionally, this information is averaged across all months, providing an accurate picture of the usage for the facility. Without this averaging process, peak season and off-season peaks and drops in use could impact the tax exemptions.
It is important to understand that the Predominant Use Study in Texas can be retroactive for up to 48 months for qualifying meters. The past, current, and future tax savings of the exception typically offsets the cost of the study and allows the business to move forward with the necessary tax exempt status for their processes.
B. Riley Financial can complete your Predominant Use Study in Texas to meet all state-specific standards and regulations. To learn more, see us online at brileyfin.com.