Who can qualify in Arkansas for a sales tax exemption on utilities?
An Arkansas manufacturer or an industrial processor with a NAICS code of 31, 32, 33 can qualify for a sales tax exemption on utilities. The portion of utility, be it electric, gas, or water when approved for exemption pays a reduced sales tax rate from 7% to 2.625%. A utility study is required described in more detail below.
How can one obtain the sales tax exemption on utilities in Arkansas?
In Arkansas a qualified company must file the special utility sales tax exemption Form SSTGB – F003 with the utility company. When the certificate and study are approved, the utility company will mark the meter exempt and reduce the sales tax to the 2.625% rate.
Does the State require that an Exemption Certificate be completed by a professional utility engineer?
No. A professional is not required to perform the utility study. But most companies choose a professional because of the accuracy of the study that is required, in addition to certification by the signatory of the study’s accuracy.
What is required of the utility study?
A utility study is required in order to determine the percentage of a utility used for production vs. non-production. The study must accompany the utility sales tax exemption certificate .
The utility study must list every piece of equipment and appliance that uses the utility, along with the individual annual consumption for each piece of equipment/appliance. In addition, everything that is classified as non-production and uses the utility must be listed also, along with the individual annual consumption. It is from this study the determination is made of the portion of a meter’s usage that is exempt.
What is the scope of work of a Professional providing the Utility sales tax exemption work in Arkansas?
- Utility Study: On Your Mark completes, certifies, and files the utility study – at no charge. On Your Mark only charges a fee after the savings have been approved.
- Refund Claim for prior periods – an exempt meter: Typically sales tax paid on an exempt utility meter may qualify for a refund. On Your Mark will file for any refund or credit available to the full extent of the statute of limitations, typically 36 months.
- Does filing of the utility exemption and/or refund claim raise any red flags? No. This exemption is similar to every exempt purchase for which an exemption certificate is filed with the supplier. The only difference with the utility exemption is that a utility study is required to provide documentation of the production percentage.
- Minimize time and frustration: The utility study is time consuming and laborious. Most companies choose a professional to complete the work, on a contingency basis, to avoid the wasted time and frustration.
- Risk-free Method to Obtain the Utility Sales Tax Exemption – in the shortest amount of time: On Your Mark does not charge for the predominate usage evaluation or its evaluation. Only after the savings are approved does On Your Mark charge a fee. Filing is usually completed in 30 day.
Start the process now; save time and have it completed in 30 days. Contact Mark Winski today!