Manufacturers and industrial processors with facilities located in Massachusetts, may be eligible for a utility tax exemption. Massachusetts 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 Mass. G.L. 64H § 6(i).

Exemption Language of Mass. G.L. 64H § 6(i)

"The sale of gas, steam, or electricity in an industrial plant area exempt if used in the actual manufacture of tangible personal property to be sold. This exemption applies only if 75% or more of the utility consumed at a metered location is consumed either directly in the manufacturing process or in heating an industrial plant in which a manufacturing process takes place."

Utility Study Requirement for Exemption Qualification

A Massachusetts utility tax 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.

Massachusetts Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6.25%

Average Local Sales Tax Rate: 0%

Helpful Resources

Massachusetts Utility Exemption Certificate: Exempt Use Certificate Form ST-12

Massachusetts Utility Exemption Statute/Rule: Mass. G.L. 64H § 6(i)

Massachusetts Claim Form for Tax Refund: Go to utility provider for refund.