Understanding if your Business Qualifies for Tax Exemption


Qualification requirements can be from any manufacturer or industrial processor. Some restaurants are even getting this coveted benefit, allowing certain businesses to claim exemptions from certain electric, gas, and water bills. And as the tax filing date approaches, people are trying to review the papers that could save our hard-earned money. Instead of stressing out at the last minute, invest your money wisely in schemes that can easily provide you with tax breaks.

Business owners can receive tax exemptions for their energy use in many industries.

Manufacturing companies and companies in the food industry can participate. Restaurants, bakeries, food service establishments, and agribusinesses have benefited from sales tax exemption. Your business makes a significant contribution to the economy, and now is the time to take advantage of one of the benefits. Most manufacturing and industrial companies are eligible for this, but you must apply to be exempt from utility sales tax.


Fuel or utilities consumed for certain agricultural purposes may also be exempt from sales tax. For example, farmers can apply for an exemption for fuels used to heat and cool livestock buildings. Farmers can also get tax exemptions on the sale of power or energy used to dry grain. You can also be exempt from the water sales tax. For example, water used to water livestock or a greenhouse for growing plants is eligible for a sales tax exemption.

To obtain this exemption, business owners must complete the department of revenue form. Ultimately, it will be sent to their utility vendor. The form, known as the sales tax exemption Certificate, asks homeowners to list the utilities they use and why they seek the exemption, either for animal husbandry, power generation, or power generation.

It is the easy part. The two-page form then asks homeowners to detail what percentage of their energy use has been used for production in the last three years. Business owners can conduct their energy analysis, but officials recommend that businesses seek professional help. Self-employment may result in you not getting an energy tax exemption.

Professional research on prevailing energy is not required; however, those who receive tax exemptions must show that more than 50 percent of any metered energy is used in production. It means listing each piece of production equipment, how much power it produces each year, and how much of its energy consumption is non-production.

Although the exemption request form is limited to two pages, an exemption applicant must provide appropriate documentation. Once the certificate or form and required studies have been completed, your energy supplier must retain the certificate. It may seem like a big effort to free up only a percent of some profits. And if you paid those taxes in the last three years, you can request a refund.

Business owners can also claim a refund of sales tax paid for energy use associated with manufacturing. Several businesses file refunds annually, according to the internal revenue service. Officials say it’s much easier to set up a utility sales défiscalisation initially than to pay the tax and try to get a refund.


A business owner should take the time to find out if their business is eligible for sales tax exemption.