Reviewing a printing company in Richmond on Dominion Energy. They have a Virginia sales tax exemption on file but it's categorized as a wholesale exemption (they sell printed materials to retailers). I think they also qualify for the manufacturing exemption which covers electricity used in the printing process. The wholesale exemption only covers the tax on materials purchased for resale — not the electricity used to produce them. Is it possible to have both exemptions active or would the manufacturing exemption replace the wholesale one?
Client already has a tax exemption but it's for the wrong category
Good eye. The wholesale exemption and the manufacturing exemption serve different purposes. The wholesale exemption covers goods purchased for resale. The manufacturing exemption covers utilities consumed in the manufacturing process. They can coexist. Your client should file a separate manufacturing exemption certificate (Form ST-11) with Dominion citing the electricity used in printing production. This won't affect their existing wholesale exemption on material purchases — it adds a new exemption on a different category of expense.
Janet identifies a nuanced situation that experienced auditors encounter. A client may have one valid exemption on file that covers some purchases but not others. The existence of one exemption doesn't mean all applicable exemptions have been filed. For any client with an existing tax exemption, check whether additional exemption categories apply. Manufacturing, agricultural, pollution control, research and development, and enterprise zone exemptions may each cover different types of utility usage at the same facility.
Filed the manufacturing exemption with Dominion separately from the existing wholesale exemption. Approved. The electricity tax savings are about $900/month — the wholesale exemption was doing nothing for the utility bill. Retroactive refund for 3 years came to $32,400. The client had assumed their existing exemption covered everything. It didn't.