From the roof-top hideouts grilling the delicious steaks to ice cream parlors laden with the sweetest of flavors, Indiana is home to all types of restaurateurs. Operating in a competitive industry, these restaurateurs do everything to make their customers happy so that they keep coming back for more.
And when the flip of the presenter is primed with a discount on offer, served as the main course of a restaurant’s strategic tax savings menu, who would not love to come back?
However, the challenge for restaurateurs lies in mastering the culinary skill, striking the balance between compliancy and making most of the tax savings on offer. Many fail at it, but almost all successful restaurant chains that have been here serving the hungry buds, they have cracked the art.
Today, we highlight how to up your tax savings game and be among those counted few.
1) Realize Your Tax Savings on Equipment Purchases
The Indiana Department of Revenue views you as a food manufacturer rather than an ordinary restaurateur. And you would be equally delighted to learn that because of this, you can enjoy several tax savings on the equipment you purchase.
However, for an equipment purchase to qualify for a sales tax exemption, that equipment must have a direct use in the production of food that you serve at your restaurant. Think of ovens, fryers, stoves and grills. If you run an ice cream shop, include refrigerators as well.
And yes, don’t forget your soft drink machines and any repair part that you purchase. All such equipment are exempt from sales tax.
How can you claim tax benefits from your vendor?
Just show them the completed General Sales Tax Exemption Certificate.
You can even claim for a refund for the sales tax paid with your previous purchases.
How much tax savings can you avail?
You can get up to 7% off your next purchase.
2) You Can Even Save on Utility Sales Tax
Do you know any utility directly consumed in food production process is non-taxable? This means that the electricity used to power your oven, stove and other cooking equipment is tax exempted.
So how much have you been paying in utility sales tax, when you could have saved your expenses and instead utilized the cash for improving your restaurant’s quality of service?
Just so that you can fully maximize your tax savings in the future, we would suggest that you perform a utility study of your restaurant. A utility study provides a complete breakdown of energy usage and helps you accurately determine what percentage of your utilities are consumed in tax exempt production activities.
How can you apply for utility sales tax exemption?
Download this form, fill it out and post it to the address below. Don’t forget to enclose a copy of your utility study with the form:
INDIANA DEPARTMENT OF REVENUE, COMPLIANCE DIVISION, UTILITY REFUND SECTION, 100 NORTH SENATE AVENUE ROOM N203, INDIANAPOLIS, IN
If your application is approved, you will receive a utility sales tax exemption certificate indicating that you can now avail the tax saving benefit.
On that ladled scoop, we conclude our serving session. Hope you enjoyed it!
If you have any questions about how to perform a utility study or how to file for a sales and use tax application, feel free to reach out. Our expert sales and utility tax consultants will be happy to serve you.