Frequently Asked Questions
Q. Why would you overpay?
A. Overpayment of sales tax is generally the result of common oversight, where you are paying taxes from which you could be exempt.
Q. Who qualifies for the exemption?
A. A wide range of businesses such as manufacturers, processors, fabricators, residential, nursing homes, agricultural and certain non profit organizations qualify for this exemption.
Q How do I qualify?
A. In the State of Texas, the predominant use (51% or more) of natural or electricity must be used for manufacturing, processing, or fabricating purposes. In Residential Use, the majority of your residents must stay 29 days or longer or predominantly use the energy over temporary residents.
Q. Why would I need a Predominant Usage Study?
A. This is a requirement from the Texas State Comptroller's office. Without the Predominant Usage Study, you may be asked to pay back the taxes with interest and penalty in the event of an audit.
Q. What is the fee for the Predominant Utility Usage study?
A. Upon successful completion of the Predominant Utility Usage study, your company will receive a refund of overpaid state sales tax. Our firm is paid from that claim. In the State of Texas, you may be entitled of up to a maximum period of four years of overpaid taxes; depending on how long your facility has been at its present location.
Q. If I am not to be paying taxes, then why am I being taxed?
A. The state of Texas requires all commercial accounts to pay the state sales tax, in which the burden of proof is set on the owner's.
Q. What happens if I don't claim for a sales tax refund?
Unless you have these taxes removed, you will pay them indefinitely, hereby costing your company a significantly amount of money in the long run.
Q. How often do I have to file for this exemption?
A. You file for this exemption one time. The exemption is retroactive for 4 years in the State of Texas, entitling your company to 4 years of overpaid taxes. The exemption stays with your company as long as there are no major changes within your company, such as the change in ownership, relocation of the facility, or a change in utility provider, addition of equipment or the addition of square footage.
Q. How long does it take to receive my refund and exemption from my utility provider?
A. In most cases filing for a refund and exemption directly with the utility provider generally has a 6-8 week turnaround time.
