Iowa utility sales tax consultants offer a variety of services to parties both commercial and residential. To better understand what their services are and why they may be of service to you, read this beginner’s guide to better understanding utility sales tax and the consultant’s role.
Do I Have to Pay Taxes on My Utilities?
Utilities typically include water, sewer, trash, electricity, natural gas, steam, and telephone services. Utilities are often taxable because your state has either stated that they’re taxable or has defined utilities as being physical personal property.
Some utilities are taxable while others are not. Water and sewer are usually not taxable, whereas resources such as electricity and natural gas are almost always taxable. Telephone services are usually taxable but are also tied up in a whole separate branch of additional tax laws.
Are There Any Exemptions?
Depending on your location and the type of facility that will be employing the utilities, you may qualify for some exemptions.
• Manufacturing and business: If you are in the manufacturing business, there will usually be exemption laws that may extend to exemptions on utilities. You may be able to ride off certain utilities on your taxes when using them for business purposes.
• Residential: In some areas, utility taxes can be exempt when they are purchased for residential purposes. Sometimes these exemptions are seasonal. For example, the extension may extend from November to April (the heavy usage months).
The best way to determine if you qualify for an exemption is to have a consultation with your utility sales tax consultant.
What Can a Utility Sales Tax Consultant Do for Me?
A utility sales tax consultant helps businesses and individuals identify and recover overpayments on utility bills such as electric, natural gas, and others. They can help you to bypass any strict regulations that may bar your qualification for sales tax exemptions and help you to save a lot of money in the long run.
If you feel that you have been overpaying on your utility sales tax, a good place to start is to have a consultation with a utility sales tax consultant. During this initial consultation, you and the consultant will go over the process and what it details. Most utility sales tax consultants will include the following with their services:
• Facility diagnosis: This part of the process takes into consideration the usage that may be exempt, the possible refund amount, and whether there are any future savings. The main motivation of the facility diagnosis is to determine if utility sales tax consultation services are worth the client’s investment. The diagnosis will also outline the consultation services plans for recovering funds.
• Facility survey: Nearly all UST projects require the collection of data, which is done with a site visit. This visit is important because it helps provide a clear picture of the company’s utility usage in the building and with the equipment being used.
• Utility study report: This is the report that is given to the company after all data has been collected, reviewed, and analyzed. Within this report will be the exact amount of utility usage that is exempt.
• State filing: If exemptions are deemed allowable, this is the part of the process where the consultant will file an exemption with the state to request a refund for the overages. State filing requirements change frequently, so it’s a good idea to have a consultant on your side that is up to date with the changes.
Utility sales tax exemption requirements and procedures are tricky and complicated. This is why it is important to work with Iowa utility sales tax consultants to make sure you’re getting every exemption your company qualifies to receive.