Many manufacturing and other businesses qualify for a tax exemption on their energy usage. However, to qualify for this exemption, you need to complete a predominant use study in Pennsylvania. While these studies don’t expire, there are specific situations when a company needs to complete the study again. The following are some of these situations.
A Change in Ownership or Name
Tax exemption after a predominant use study in Pennsylvania is tied to the owner of the company and the company’s name. If you buy a business from someone else or change your business’s name, these exemptions may not automatically transfer. Completing a new predominant use study is necessary to continue using the previous exemption, so you can enjoy the same cost savings.
Your predominant use study in Pennsylvania will look at the percentage of energy use that applies to qualifying equipment. If you add new equipment, change the frequency of use for the equipment, or make other equipment-related changes, you will need a new study to adjust your tax exemption status. Even if your energy use has decreased, it’s important to redo your study to prevent auditing issues that could cost your business more money.
Change in Function
In addition to changing your equipment, if the services or products your business provides change, you will also need a new predominant use study in Pennsylvania. Not all business processes qualify for an exemption, which is why it’s critical to make sure your energy use meets the requirements to continue using your tax exemption status.
Resource Box: If you need a predominant use study in Pennsylvania, visit the B. Riley Financial website to schedule one.