Restaurants Sales Tax Exemption
Restaurants are eligible for a tax exemption on the portion of their utilities that go towards the production or preparation of their food and beverage. To determine how much utility is exempt, state agencies require that a predominant use study is performed on the business premises – that’s where SmartSave comes in. Our specialists are experienced in identifying production-exempt items in even the most complex of facilities.
State Eligibility and Application
If you would like to learn more about how your state handles the Utility Sales Tax Exemption, then simply click on the link below and go to your state’s designated page. You will be provided with detailed information including eligibility, procedure, and state statute.
Qualifying Utility Usage
In most states restaurants are allowed to claim the Utility Sales Tax Exemption on utilities (electricity, water, and gas) that are consumed in the production or preparation of food and beverage.
Every restaurant has a unique exemption profile and exemption devices should be analyzed on a case by case basis in order to determine an accurate exemption percentage.
- Electricity used to power microwaves, ovens, slicers, and fryers in the kitchen.
- Water used in the production or preparation of food and beverage.
- Gas used to power ovens and fryers in the kitchen.
Conversely, any utility supplied towards non-production items is still subject to sales tax.
- Electricity used for lighting and air conditioning, or to power refrigeration equipment.
- Water used in restrooms and employee break rooms.
- Gas used to heat the facility.
SmartSave is Here to Serve
Detailed Energy Study
All states that offer the Utility Sales Tax Exemption require that either a detailed energy study or predominant use study be performed on the manufacturing facility to identify the percentage of electricity, gas, or water that is actually consumed in the production process.
Accuracy & Compliance
If the utility study is not performed with care a variety of consequences can arise, including denial of the application, state-imposed penalties and audits. Going down the path alone or with the wrong partner company can lead to marginal service and unnecessary hardships.
Streamline the Exemption Process
With SmartSave on your side, you can have peace of mind knowing that our certified specialists will conduct the energy study with laser-accuracy and per all State requirements, providing superior service at every stage of the savings process.