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Michigan Commercial Building Energy Code is Changing in 2024 – Join us on June 19 to learn more.

Hundreds of millions dollars in sales tax annually are being overpaid on energy used by manufacturers in the United States. In our experience at E3M, we estimate that 10-15% of manufacturers are overpaying utility sales tax. With the predominant use studies we’ve completed for our manufacturing clients nationwide they are saving upwards of $50 Million ANNUALLY.

In order to confirm what energy is taxable and what is not, states require that an engineer complete a predominant use study to understand exactly what the space in a manufacturing facility is being used for, otherwise states default to a blanket assessment of square footage.

These studies also expire and need to be redone, varying by state from 4-10 years. A study will also need to be redone if the legal entity changes or if there are changes to processes like adding new lines or warehousing space. Whenever there is a shift in process, adding more or taking away manufacturing, processing or warehousing space the assessment should be updated.

In just 7 days, at a Coca-Cola facility in Pennsylvania we redid a predominant use study from 2018 in 2024. We took a look at the warehousing vs manufacturing area in the facility to better understand the natural gas & electrical energy usage. For this facility we were able to show that 90% of their space is tax exempt based on usage, not just square footage. This assessment saved that facility alone over $150,000 per year.

Contact us to schedule your predominant use study.