Client is auto parts manufacturer in Louisville. Filed Form 51A102 with LG&E for Kentucky manufacturing exemption under KRS 139.470(15). LG&E denied saying client doesn't meet the "predominantly manufacturing" test. Client makes 85% of revenue from manufacturing. What gives?
LG&E manufacturing exemption denied - need advice
LG&E can be picky about that test. Did you provide detailed breakdown of manufacturing vs non-manufacturing electricity usage? They want to see at least 51% of power going to actual production.
We showed 78% manufacturing usage but they're questioning whether assembly counts as manufacturing. It's automotive assembly - definitely manufacturing in my opinion.
Appeal to Kentucky Department of Revenue. Assembly is manufacturing under their interpretation. I've won this argument before.
Manufacturing exemption disputes often come down to definitions. Document the production process thoroughly and don't hesitate to involve state tax authorities when utilities take narrow interpretations.