Save 6.25% to 8.25% on Electric & Natural Gas Bills
We do Predominant Use Studies & Sales Tax Exemption Certifications for: Texas Manufacturing Facilities, Food & Beverage Processors, Agricultural, Horticultural & Feedlot Operations, Oil & Gas Operations, Golf Courses, Film & Media Production, Digital TV & Radio Towers, Apartment Properties, Assisted Living & other eligible Texas facilities.
Cost Containment Engineering has over 20 years experience performing electricity and natural gas predominant use studies, and providing licensed/registered engineer certification of sales & use tax exemption certificates. We work with both large and small facilities, are cost competitive, professional, ethical, document the work in a manner that can be defended in case of a tax audit, and carry general, professional, worker's comp & automobile liability insurance.
David Frashier, P.E.
If you have questions, or need a price quote for our services, please contact:
The following information will be helpful to expedite a cost proposal:
1. Brief description of your operation (i.e. manufacture light bulbs)
2. Average monthly electric billing
Average monthly natural gas billing
3. Approximate square feet of your building(s)
4. Location of the facility, city and state
Or if you would like to read more about these tax exemption rules, please scroll further down this page.
What is the benefit of having a Predominant Use Study?
Since Texas sales and use tax rates vary from 6.25% to 8.25%, the cost of future electricity and natural gas billings can be reduced significantly by eliminating this tax at eligible facilities. Also, substantial sales tax refunds (up to 4 years retroactive) are available to the customer upon completion of the study.
What types of businesses can benefit?
In Texas, the energy sales tax exemptions are applicable to the following types of facilities and operations:
Manufacturing Operations of all types, including fabrication, assembly and/or processing, and all sizes of operations from small shops to large industrial facilities. For example: print shops, wood, clay & plastic products, pharmaceutical, medical device, electronics & semi-conductor plants, machine shops, chemical plants & refineries, steel and textile operations, audio & video recording production, and a vast array of other manufacturers.
Food & Beverage Processors and Bakeries (sub categories of manufacturing)
Nursing Homes, Alzheimer Units, Assisted Living and Retirement Facilities ( residential exemption)
RV and Mobile Home Parks where the average tenant stay exceeds 30 days (residential exemption)
Apartment Complexes & Buildings and Condominiums (residential exemption)
Agricultural and Horticultural operations (including irrigation, feedlots, animal food processing, fruit and vegetable growing & processing, and plant nurseries)
Golf Courses (for electricity used in pumping irrigation water and charging golf carts)
Repairs to railroad "rolling stock", jet aircraft engines, and national defense related "platforms"
Oil & Gas and Mining operations
Film & Media Production, Digital Television and Radio broadcast towers
Repair and maintenance of Railroad Rolling Stock and "Defense Platforms"
What is a Predominant Use Study?
The Texas Comptroller's Office tax codes (TAC Title 34, Part 1, Chapter 3, Subchapter O, Rule 3.295) require a predominant use study to qualify a facility for a state and local sales tax exemption on electricity and natural gas billings from the utility provider. For example, in a manufacturing operation, this engineering study determines the % electricity and natural gas consumed directly for manufacturing purposes vs. total usage in the facility. Likewise, in a nursing home or other residential facility, the study will determine the % electricity and gas consumed directly for residential purposes vs. total usage in the facility. Each gas or electric meter at the facility must be studied independently to determine its eligibility for the energy tax exemption. If it can be shown that more than 50% of gas or electricity passing through a particular utility meter is used directly for tax exempt purposes, then the entire usage through that meter is tax exempted. Texas tax codes state that the this study must be certified by a registered (licensed professional) engineer ............". The engineer must perform this detailed study before he can ethically certify the facility's eligibility for the sales tax exemption by signing and stamping his engineering seal on the Texas Sales and Use Tax Exemption Certification form.
Why might You need or benefit from a Predominant Use Study ?
Generally, a Predominant Use Study would be appropriate for any of the above types of tax exemption eligible facilities when:
The monthly billing statement from the electricity and / or natural gas utility company is showing charges for sales tax exceeding $100 per month.
An existing or new facility is being qualified for energy tax exemptions.
An existing energy tax exempt business is acquired by new ownership, or has been relocated to a new site.
During a tax audit, the facility owner cannot produce a copy of the study which originally qualified the facility for energy tax exemptions.
An existing tax exempt operation is expanded, and an additional utility meter is installed to service the new area.
Switching to a new energy provider to take advantage of lower energy costs, the new energy provider will need a copy of your tax exemption certificate to sustain an existing tax exemption.
This study can also have additional benefits by quantifying the energy use (in kilowatt hours or cubic feet of gas, and the associated annual cost of each) for each piece of equipment or process in the facility, thereby aiding management in understanding exactly where the major energy costs are being incurred. The study data can form the basis of an "energy audit" to identify targets of opportunity for cost-effective implementation of energy efficiency improvements with a high return on investment.
What is the cost for a predominant use study and exemption certification by our licensed engineer ?
We will offer you a firm, fixed price which is typically lower than any competitor. We base our cost on an estimate of the number of man-hours it will take to do the study and prepare the report in a precise manner that meets state requirements. The cost will generally be proportional to the size and complexity of your facility. Having performed many studies on a wide variety of facilities, we can quickly estimate the man-hours based on our prior experiences. In most cases the cost is less than one month's electric bill and the sales tax refund due the owner / operator will far more than pay for the cost of our services.
Contact us with the basic information described in items 1. to 4. above, and we will promptly give you a firm price proposal for your consideration.
Why use Cost Containment Engineering, Inc. for your predominant use study and tax exemption certification?
Our pricing is very competitive anywhere in Texas.
We have successfully performed many of these studies during the past 10 years.
Because we are a Texas licensed / registered engineering firm, Cost Containment Engineering is legally qualified to perform these utility studies in Texas.
We will make ourselves available to defend the study should the results be called into question during a tax audit. Having successfully performed many of these studies, we are familiar with the detailed state requirements, and you can rest assured that the study will be performed properly in an ethical, defensible manner.
The Texas Sales & Use Tax Exemption Certification Form will be certified (signed and sealed) by a Texas registered / licensed professional engineer for submittal to your utility provider.
We carry general & professional liability insurance, workers compensation & auto liability insurance in case of some unforeseen incident.
To request a cost proposal for a Predominant Use Study and energy Tax Exemption Certificate for your facility, please call us for a free, no obligation quote:
