Tax Exemption

What is Utility Sales Tax Refund and How to Apply for It?

tax refund and exemptions

Companies looking to maximize their tax savings can benefit from various state and federal offerings, in particular in the utility sales tax category.

Included in this category are tax exempts and refunds.

In our previous posts, we have extensively covered the topic of utility sales tax exemption – discussing its nitty-gritties  and how to file for an exempt.

Today, however, we want to take a break from the norm and look into the details of utility sales tax refund.  After all, like tax exempt, refunds also offer tax saving incentives, and so the more options you have to leverage as part of your tax-savvy strategy, the more tax-happy you’ll be.

What is Utility Sales Tax Refund?

Utility sales tax refund is a type of refund that you get for the previous tax payments you made in excess for your utility purchases, but were not compensated for it at that time. This means utility sales tax refunds apply to all those payments (falling within a defined time period) you made before receiving the status of a tax-exempt organization.

So in short, if you qualify for an exemption, you may also qualify for a refund.

The use of the word ‘may’ might confuse some of you, and we are sure you’ll be eager to know what state impositions are likely to restrict you from claiming for a refund.

Restrictions to Claiming a Utility Sales Tax Refund

Well, the restrictions vary from state to state, but since we are located in Indiana, in the context of the state’s statutes, we can say that  if less than 50% of a meter’s usage is for “tax exempt activities”, then you are limited to obtain a refund of that percentage of tax paid..

Furthermore, you can only claim for a refund in Indiana for the current year and the three previous years. Any refunds prior to that do not apply.

How to Apply for a Utility Sales Tax Refund?

To apply for a utility sales tax refund, you’ll have to fill out Form GA-110L and submit it either by mail or online. Make sure you attach all the supporting documents with the form as required by the Indiana Department of Revenue, and clearly explain why a refund is due.

Do you have any other questions with regards to utility sales tax refund process or need help with the completion and filing of the form?

Feel free to reach out. Our expert utility tax consultants in Indiana will be happy to serve you.

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