Predominant Use Study — Elevate EBS
Elevate EBS · Predominant Use Study
Tax-Optimized · Compliance-First

Stop paying sales tax on the power that runs your production.

Most states exempt the utilities consumed in manufacturing, processing, and other qualifying activities from sales tax. But you only get the exemption if you can prove what share of the meter is going to qualifying use — and that proof is a predominant use study. In Texas, clear the threshold and the entire meter comes out exempt.

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What it is

An engineering study that unlocks a sales tax exemption.

A predominant use study is an engineered analysis of everything drawing power on a given utility meter — every motor, compressor, oven, pump, light, and HVAC unit. Each piece of equipment is inventoried, rated, and assigned to either qualifying use (manufacturing, processing, fabrication) or non-qualifying use (office space, break rooms, general lighting). The result is a documented percentage of consumption attributable to the exempt activity.

In Texas and most states that offer the exemption, if qualifying use exceeds 50% of the meter’s consumption, the entire meter becomes exempt from state sales tax on utilities — not just the qualifying share. And the benefit runs both directions: going forward you stop paying the tax, and you can typically file for a refund of sales tax already paid on that meter, generally reaching back several years.

Who it’s for

Worth a look if you run equipment on a commercial meter.

  • Manufacturers and fabricators
  • Food processing and commercial bakeries
  • Machine shops and metalworking operations
  • Plastics, chemicals, and industrial processing
  • Restaurants and commercial kitchens
  • Data centers and other high-consumption operations

Utility bills are one of the least-examined line items in most operations — they get paid, not audited. That is exactly why the exemption goes unclaimed for years. The refund on prior periods is often larger than the first several years of forward savings combined.

Why it’s worth doing

A recurring cost, permanently reduced.

Refund on prior periods

Sales tax already paid on a qualifying meter can typically be recovered for prior periods, which usually funds the study several times over.

All or nothing, in your favor

Clear the predominant use threshold and the exemption generally applies to the entire meter — not just the qualifying percentage.

It does not stop

This is not a one-time deduction. Once the exemption is in place, it lowers your utility cost every month going forward.

How it works

We bring it to the table and manage it end to end.

Step 01

Assess

We look at your operation and utility meters and confirm the exemption is likely to be available before you spend anything.

Step 02

Survey

An engineer inventories every piece of equipment on the meter and documents its rated load and hours of operation.

Step 03

Calculate

Qualifying versus non-qualifying consumption is computed and the predominant use percentage is documented to withstand review.

Step 04

File

The exemption certificate is filed with the utility and the refund claim is filed with the state.

An estimate is not a study.

State taxing authorities can and do review predominant use exemptions, and when they do, they ask for the engineering. A percentage arrived at by eyeballing the floor plan will not survive that review — and an exemption that gets reversed comes back as tax, penalty, and interest on every month you claimed it. That is why the equipment survey and load calculations are done by engineers and documented to stand up. Same standard we bring to everything: optimize aggressively, but never past the line.

Let’s talk

Find out what your meters could be exempting.

A short call is enough to tell whether your operation is likely to clear the predominant use threshold and what the refund could be — before you commit to anything.

Schedule a call →

Elevate EBS (Employer Benefits Solutions) · Houston, TX. Predominant use studies are performed by qualified engineers and filed in coordination with your tax advisor. Exemption thresholds, qualifying activities, and refund lookback periods vary by state. This material is for informational purposes and is not tax or legal advice.

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