Who can qualify in Oklahoma for a sales tax exemption on utilities?
A manufacturer or an industrial processor in Oklahoma may file a sales tax exemption certificate on utilities used in production. A predominate usage study is required to identify what portion of electric, gas, and water is used for production. When approved for exemption, sales tax will not be charged on the purchases of a utility from an exempt meter. The predominate usage study is described in more detail below.
How can one obtain the sales tax exemption on utilities in Oklahoma?
In Oklahoma, a company must file a special utility sales tax exemption certificate and predominate usage study with the utility company.
Does the State require that an Exemption Certificate be completed by a professional utility engineer?
Oklahoma is not a state that requires that the study be completed by a professional. However most companies typically contract with a professional who will certify the study. This prevents the utility company coming back against the customer for back sales tax.
What is the ‘predominate usage’ requirement?
The predominate usage requirement means that if more than 50% consumption of any utility meter is used for production, then the whole meter is exempt.
The study must list each piece of equipment and appliance that is used for production and its annual consumption must be included on the list. That is the individual annual consumption of each piece. Likewise a similar list is required to be filed for all non-production equipment, appliances, and their individual annual consumption.From this study the exempt percentage is determined as to whether the predominate usage requirement is met – or not.
What is the scope of work of a Professional providing the Utility sales tax exemption work in Oklahoma?
- Predominate Usage Study: On Your Mark performs the utility study and evaluation for which there is no charge. Since On Your Mark works only on a contingency fee basis, this work is done at no charge. Only after the exemption is approved, and a savings results, does On Your Mark bill for its share of the savings.
- Claim for Refund sales tax paid on exempt meter: An exempt utility meter may qualify for a refund or credit on sales tax paid on prior periods. On Your Mark will evaluate this opportunity and file a refund claim if the meter qualifies. Could be up to 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. Companies choose to contract this work out to avoid the time wasted and the frustration of its own personnel.
- The way to obtain the Utility Sales Tax Exemption Risk-Free – in the shortest amount of time: Since no fees are charged by On Your Mark for the utility study and evaluation, if there are no savings, there is no charge. After the exemption and/or refund is approved and savings result, then On Your Mark bills for its share of the savings.No savings, no fees. On Your Mark typically has the Oklahoma Sales Tax Exemption Certificate on qualified utilities filed within 30 days.
Start the process now; have it completed in 30 days. Contact Mark Winski today!