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The Basics Of A Wisconsin Predominant Use Study

Thirty states throughout the USA use a Predominant Use Study to qualify businesses for a utility sales tax exemption. The specifics of the study requirements are established by the state, with slight differences in qualifying companies and the amount of the tax exemption across the country.

In Wisconsin, the utility sales tax exemption is based on the actual percentage of the utility used by a qualifying device, process, or system. The exemption is available to manufacturing, processing, and other qualifying companies in the state.

Per Meter Basis

A Predominant Use Study in Wisconsin is completed on a per meter basis. This means the electricity or natural gas passing through the meter is broken down into use by specific devices, equipment, or systems. For example, electricity in a plant could be used for lighting, heating and cooling, running the breakroom refrigerator, or operating a desktop computer.

Some of these devices meet the criteria for qualifying for the exemption, while others are not part of the recognized processing, manufacturing, or production operations. The Predominant Use Study traces the use of this electricity. It accurately measures the annual rate of energy use per device.

Through complex computations, the study determines the percentage of qualifying utility use through the meter. This percentage of qualified use is converted into the corresponding partial sales tax exemption on the utility.

In addition to the current and future utility sales tax exemptions, businesses can also claim refunds for the past 48 months to recoup excessive sales tax payments based on the study results.

To learn more about a Predominant Use Study for your Wisconsin business, contact the team at B. Riley Financial. Additional information can be found at brileyfin.com.

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