Finding a good place to open a business can be a daunting task. What makes a state or city business friendly? There are a lot of factors that go into making a place hospitable to a business and most of them take the form of tax breaks, incentives, or deductions. One great example of a state that is trying to make itself amenable to businesses is Indiana. If you own a business or corporation and go through the right channels, you could get a utility sales tax exemption in Indiana. As most business owners know, saving money is a huge benefit to your business! |
What Is the Savings Amount?
Often times, when business owners hear about this tax exemption, the first question they ask is, "Well, how much of a savings is that?" The answer is "about 7 percent." So, if you spend about $1,000 a month on utilities, you can end up saving $70 dollars per month, which adds up to $840 per year. That's not a small chunk of change! The utilities that are included in this exemption are electricity, natural gas, and water. If you own a business in Indiana and have not looked into this special program, now is the time to consider learning more about it.
The 50% Rule
As with most government incentives, this one comes with some strings attached to it. In order to qualify for the exemption, over 50% of the specific utility (water, gas, or electric) must actually be used for the production of tangible goods. For example, if a little over half of your electricity use is for the production of widgets, you can claim an exemption. If, however, 50% or more of your electricity is used on overhead, you cannot claim the exemption. The same is true with natural gas and water and each utility is calculated individually. True to form, it is all very complicated and confusing which is why finding a company that specializes in decoding the business tax code is so important.
The Benefits of Applying
In order to qualify for the exemption, a business must fill out an ST200 form and undergo a predominate usage study. While this might seem like a bigger hassle than it's worth, it is valuable to you for 2 reasons: the first is that you probably have very little idea how to figure out if you actually qualify for the program and a little help won't hurt. The second is that when the process is over, you will be saving enough money to make it worth all that effort! Government programs may not be very easy to apply for, but they are usually worth it! Unlike some other government programs, once you have qualified for this program, you don't have to renew your status. You receive the benefit indefinitely!
Get Some Help
If you're not sure how to start this process, you're not alone. The government makes everything seem so much harder than it really is. With a simple phone call to a business that specializes in utility tax, you can get started with the application and be saving money in no time!
In general, once you have contacted a utility tax professional, you have very little to do other than sit back and wait for approval. In most cases, these professionals will conduct the needed study, fill out and submit the proper applications and paperwork, and give you a call when the results come in. There is no reason to spend endless amounts of time and money trying to do this by yourself. Despite how useful CPA's are for most things, they tend to fall short when it comes to the utility sales tax exemption in Indiana, so be sure to contract with the right people!
ENGUARD, INC. , unlike state auditors, will be a proactive force for your company. Utility Sales Tax Exemption Indiana! Visit our page on http://enguard.net/our-services/sales-use-tax/ for more info!
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