Manufacturers and industrial processors with facilities located in Indiana, may be eligible for a utility tax exemption. Indiana offers an exemption from state sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Ind. Code § 6-2.5-5.1(b).

Exemption Language of Ind. Code § 6-2.5-5.1(b).

"Transactions involving tangible personal property [including electrical energy, water, and natural gas] are exempt from the state gross retail tax if the person acquiring the property acquires it for direct consumption as a material to be consumed in the direct production of other tangible personal property in the person's business of manufacturing, processing, refining, repairing, mining, agriculture, horticulture, floriculture, or arboriculture."

Utility Study Requirement for Exemption Qualification

An Indiana predominant use study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Indiana Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 7.00%

Average Local Sales Tax Rate: 0%

Helpful Resources

Indiana Utility Exemption Certificate: Form ST-200

Indiana Utility Exemption Statute/Rule: Ind. Code § 6-2.5-5.1(b).

Indiana Claim Form for Tax Refund: GA-110L Claim for Refund