Obtain a Sales Tax Exemption Certificate

Unsure if your facility/operation qualifies? Are you an accounting or law firm that needs assistance with your client? Contact us today for a no-obligation consultation with one of our experienced engineers. We’ve handled many different types of businesses over the years and are happy to help with yours. We pride ourselves on performing our work ethically, professionally, and with a high degree of confidentiality.

What is a Predominant Use Study?

The Texas Comptroller’s Office tax codes (TAC Title 34, Part 1, Chapter 3, Subchapter O, Rule 3.295) require a predominant use study to qualify a facility for state and local sales tax exemption on electricity and natural gas billings from the utility provider. For example, in a manufacturing operation, this engineering study determines the % electricity and natural gas consumed directly for manufacturing purposes vs. total usage in the facility. Likewise, in a nursing home or other residential facility, the study will determine the % electricity and gas consumed directly for residential purposes vs. total usage in the facility.

Each gas or electric meter at the facility must be studied independently to determine its eligibility for the energy tax exemption. If it can be shown that more than 50% of gas or electricity passing through a particular utility meter is used directly for tax exempt purposes, then the entire usage through that meter is tax exempted. Texas tax codes state that the this study must be certified by a registered (licensed professional) engineer …”. The engineer must perform this detailed study before he can ethically certify the facility’s eligibility for the sales tax exemption by signing and stamping his engineering seal on the Texas Sales and Use Tax Exemption Certification form.

Will you benefit from a Predominant Use Study?

Generally, a study would be appropriate for any eligible facility (described above) when:

• The monthly billing statement from the utility company is showing charges for sales tax exceeding $50 per month on your electricity and/or natural gas.
• A facility is being qualified for energy tax exemptions.
• An existing energy tax exempt business is acquired by new ownership or has been relocated to a new site.
• During a tax audit, the facility owner cannot produce a copy of the study which originally qualified the facility for energy tax exemptions.
• An existing operation is expanded and an additional utility meter is installed.
• Switching to a new energy provider to take advantage of lower energy costs, the new provider will need a copy of the facility tax exemption certificate to sustain an existing tax exemption.

This study will quantify the energy use (in Kilowatt hour or cubic feet of gas) for each piece of equipment or process in the facility. This data has been found helpful in aiding management understand where the major energy costs are being incurred. The study can form the basis of an “energy audit” to identify targets of opportunity for cost-effective implementation of energy efficiency improvements with high ROI.

What is the cost for a predominant use study & exemption certification by our licensed engineers?

We offer a competitive firm-fixed-price. Our costs are based on an estimated number of man-hours it will take to perform the study on site and prepare the report in a manner that fulfills state requirements. The costs will generally be proportional to the size and complexity of your facility. Having performed 100s of studies on a wide variety of facilities, we can quickly estimate these costs based on our prior experiences. In most cases, the cost is less than one month’s electric bill and the sales tax refund due to the owner/operator will far more than pay of the cost of our service.

Call or email us to provide you with a no-obligation quote. In order to expedite the process, please have the following information ready.

1. Brief description of your operation.
2. Average monthly electric and/or natural gas billing, as required.
3. Approximate square footage of your building(s).
4. Location of the facility (city & state)

Why use Cost Containment Engineering?

We have an excellent record and reputation in the industry. We have successfully performed hundreds of these studies all around the State of Texas. No matter the size of your facility/operation we will treat you professionally and with integrity. As a Texas licensed/registered engineering firm we are legally qualified to perform these studies. In the rare event our study is called into question during a tax audit, we will make ourselves available to defend it. Thanks to our vast experience, we are familiar with the detailed state requirements. You can rest assured that the study will be performed properly, in an ethical, defensible manner. All the studies and exemption certifications we provide for submittal to your utility provider are signed and sealed by a licensed Professional Engineer registered in the State of Texas. Our firm carries general & professional liability insurance, workers compensation, and auto liability insurance.