Effective January 1, 2025, a new Indiana law went is in effect which allows restaurants to qualify for a 50% sales tax exemption for electricity using a more streamlined process. Previously, to claim an exemption from the state gross receipts tax on electricity, restaurants were required to conduct energy studies and provide administrative calculations to substantiate their exemption claims. Under the streamlined new process, restaurants may submit Form ST-200R, “Electric Utility Sales Tax Exemption Application for Restaurants,” to the Department of Revenue without the energy study requirement. Once the Department receives the restaurant’s application, they will issue an ST-109R certificate. The restaurant then provides this certificate to their utility company to receive a 50% exemption on the state sales tax on electricity purchases.
Indiana restaurants who may qualify for this exemption should ensure they have submitted and received all paperwork from the state before claiming the exemption and will need to follow their utility company’s process for submitting the certification to receive the exemption. With a 50% reduction in sales tax on electricity purchases, taxpayers who receive the exemption should see the impact from this new law on utility bills. (Public Law 118, Signed as Senate Bill 228 by Governor March 13, 2024, effective January 1, 2025)