(a)

1. (1) A manufacturer must:

   1. (A) Register with the Sales and Use Tax Section to purchase natural gas or electricity at the reduced rate using Form ET185A; and
   2. (B)

(i) Provide information to the Sales and Use Tax Section at that time regarding each manufacturing use of natural gas or electricity at each meter.

1. (ii) See subsection (b) of this section for information required.
2. (2) A manufacturer who operates manufacturing facilities at more than one (1) physical location must make a separate application for each location.
3. (3) The signature on the application (Form ET185A) will certify that all the information provided is true and correct information regarding qualification for the reduced rate.
4. (4) The Sales and Use Tax Section will issue a certificate to the manufacturer that will certify the percentage available for reduced rate at each meter (Form ET185RR).

(b) Information required.

1. (1) Separate meters. The manufacturer shall prepare a list that includes each separate meter that supplies natural gas or electricity that is used solely in the manufacturing process.

2. (2) Mixed-use meters.

   1. (A)

      1. (i) When gas or electricity is furnished through one (1) meter, and a portion of the gas or electricity is subject to the full tax rate while another portion of the gas or electricity is eligible for the reduced tax rate, a reasonable formula shall be used by the manufacturer to apportion the gas or electricity between that eligible for the reduced rate and that not eligible.
      2. (ii)

(b) (b) However, the formula or method used does have to reasonably reflect the percentage of manufacturing use to total use.

1. (B) The manufacturer:

   1. (i) Shall provide with the application a narrative explanation of the formula or method employed to determine the percentage of manufacturing use;

      1. (ii) May calculate the apportionment through the use of the manufacturer's own knowledgeable employees or the use of an outside firm;
      2. (iii) Shall prepare a list that includes each mixed-use meter and the percentage that is subject to the reduced rate at each meter; and
      3. (iv) Shall maintain all records necessary to support the apportionment percentages for review upon audit by the Sales and Use Tax Section.
      4. (c) The Sales and Use Tax Section will accept the certification provided by the manufacturer and issue a certificate to the manufacturer that lists each meter for which the reduced rate is available and the percentage of that meter's billing that is taxed at the reduced rate (Form ET185RR).
      5. (d)
2. (1) The manufacturer shall maintain the supporting documents (worksheets) used to calculate the percentage for mixed-use meters for the period of time that tax records are required to be kept.
3. (2) The worksheets and the calculation of the percentage subject to the reduced rate are subject to audit and assessment of any unpaid tax resulting from incorrect calculation or certification of the percentage.

(e)

1. (1) Purchases made after July 1, 2007, but before the manufacturer registers and obtains a meter certification from the Sales and Use Tax Section are taxable at the full state tax rate of six percent (6%).

2. (2)

   1. (A) If the manufacturer subsequently registers and obtains a meter certification, the manufacturer may file a request for refund with the Sales and Use Tax Section for the overpayment that includes documentation regarding the calculation of the overpayment.
   2. (B) See 26 CAR § 32-106.