The Basics Of A Predominant Use Study For A Wisconsin Manufacturing Facility

by | May 6, 2021 | Financial Services

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The US Energy Information Administration reports approximately 33% of all energy consumption in the United States is by the industrial sector. In 2018, this sector used over 27,000 trillion BTU, with the most significant percentage consumed of manufacturing industries.

Wisconsin manufacturing and processing facilities and businesses in other qualifying industries utilize Predominant Use Studies to receive a tax refund and exception for qualifying energy use. Typically, these studies are completed by third-party provider who records the energy and utility usage throughout the facility.

The Study

The Predominant Use Study follows all Wisconsin legal requirements for qualifying businesses as well as exemption categories. This is a complex legal area, requiring expertise and knowledge in the specifics of the state law for correct documentation.

The study includes evaluating every utility-consuming device within the facility. Lighting, HVAC systems, computers, office equipment, and all processing and manufacturing equipment are assessed. The evaluation process involves listing the specific device’s load factor, energy rating, and average operational time. Once compiled, the information is used to create an annual usage estimate of each device.

The specific uses of each device dictate its classification as either exempt or taxable. While this may seem straightforward, it can be a complicated process, requiring in depth knowledge of the relevant state statues.

A Predominant Use Study is a critical step for businesses seeking utility sales tax exemption. The cost-saving to the company typically offsets the initial cost of the study while also providing long-term utility tax exemptions.

Wisconsin business owners requiring a Predominant Use Study can book a consultation with our team at B. Riley Financial. For scheduling, see us at brileyfin.com.

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