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.