Connecticut (CT) Tax Exempt

ConnecticutWho can qualify in Connecticut for a sales tax exemption on utilities?
In Connecticut any company who manufactures a product or is an industrial processor can qualify for a utility sales tax exemption. In order to qualify, a minimum of 75% of the consumption of either electric, gas, or water must be used for direct production. A utility study is required to make that determination.

How can one obtain the sales tax exemption on utilities in Connecticut?
A valid utility sales tax exemption form 01-339 must be filed with the appropriate utility company. When the meter  meets all the requirements and is approved by the necessary authority, all of the Connecticut state sales tax is immediately eliminated from the utility bill. The exemption is good for 6 years, and may be renewed.

Does the State require that an Exemption Certificate be completed by a professional utility engineer?
Connecticut doesn’t require that the utility study (explained below) be completed by a licensed engineer. However outside professionals have engineers on staff and will maximize the chance of qualifying for exemption. Inaccurate information typically results in denial and forfeit of future savings.

What is required in the utility study?
The utility study is required because typically a manufacturing company has production and non-production usage on the same meter, e.g an electric meter might contain office and production equipment. Connecticut requires that the percentage of consumption used for ‘production’ on any single meter be at least 75% of the total consumption. In order to make this determination, a detailed study is required that lists every piece of equipment and its respective annual consumption. An identical list must be created for everything that consumes that utility for non-production uses. From that list it can be determined if the 75% requirement is met.

What is the scope of work of a Professional providing the utility sales tax exemption work in Connecticut?

  • Utility Study: On Your Mark typically has the study evaluated, completed, and filed on behalf of the company within 30 days – at no charge. Inaccuracies on the study are cause for denial. There is no fee until the exemption and refund are approved and savings are obtained by the client.
  • Claim refund for back sales tax paid on exempt meter: An exempt meter can qualify for a sales tax refund. Whenever applicable the refund claim is filed and followed through by On Your Mark. Connecticut’s statute of limitations is 36 months.
  • Minimize time and frustration: The utility study is time consuming and laborious. Most companies prefer to have it done with outside professionals to avoid wasting time and frustration.
  • 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.
  • Risk-Free Way to Obtain the Utility Sales Tax Exemption – in the shortest amount of time: On Your Mark performs the study and analysis work at no charge. On Your Mark only charges the customer after a savings has been obtained; otherwise the work is performed free. Results are usually obtained within 30 days.

Start the process now; have it completed in 30 days. Contact Mark Winski today!