Our client is a global Fortune 500 energy company based in the US. Its renewable energy business develops, owns, and operates solar, wind, and energy storage facilities across many states.
The energy industry encounters numerous complex tax issues due to the distinct features of its operations. Challenges arise from the use of new technologies, antiquated tax laws, and dealing with various jurisdictions—each having its own set of tax exemptions. While some use tax exemptions are specific to renewable energy, exemptions for traditional energy are also available.
As a traditional utility company expanding its renewable energy facilities, our client was midway through the construction of a large solar facility. The client’s internal tax team was lean, and they quickly recognized that they needed additional resources with expertise in applying use tax exemptions to both the traditional and renewable energy spaces.
The client engaged with DMA to do a full analysis and review of the general contractor’s engineering, procurement, and construction (EPC) contract. The review was designed to identify Transaction Privilege Tax (TPT) savings opportunities, which were dependent on the contractor’s assignment of taxability derived from its schedule of values categories.
DMA worked directly with the client and its contractor to identify purchases that were incorrectly subjected to TPT and recover the overpaid taxes—totaling over $4M. DMA also closely partnered with the contractor to correctly assign TPT by schedule of values category, which resulted in a sizable reduction of future budgeted tax expense.
On top of the large tax savings, the DMA team helped our client develop best practices and tax policies to help the company navigate future large construction projects.
DMA advocates for our clients’ best interests while maintaining the integrity of their relationships with contractors and suppliers. Our team has a proven track record of working with traditional and renewable energy clients to minimize their sales and use taxes, identify exemptions unique to the industry, and recover overpayments.
DMA’S Transaction Tax Professionals are Experts in Exemptions
Trust DMA’s seasoned transaction tax team to help you maximize all applicable exemptions and minimize your transaction tax obligations in the renewable energy industry.