The professionals at TPC have over 1,000 years of combined experience helping manufacturers save hundreds of millions of dollars in operating and capital costs. Based upon our experience, these are the top five ways to reduce operating costs:

1.Secure refunds on erroneously paid taxes. Over 90 percent of the manufacturing facilities we have reviewed have benefited from a refund review. Typically, sales tax is paid on exempt items. With sales tax rates of 7% to 9%, refunds add up quickly. Refunds can be secured on consumable items as well as capital items. Each state has its own unique rules, and the rules constantly change. As a result, an accounts payable clerk doesn’t have a chance to get it right all the time.

2.Identify tax exemptions on consumables and capital expenditures. After a completing a refund review as outlined above, a manufacturer will benefit from implementing a process to make better taxability decisions going forward. This will guarantee reduced costs.

3.Proactively appeal real and personal property taxes. Property taxes are typically one of the largest operating expenses of a manufacturing plant. Amazingly, most manufacturers don’t actively pursue lower property taxes consistently from year to year. Active pursuit of lower property taxes can net 30 to 40 percent annual tax savings.

4.Secure cash and non-cash incentives from state and local government. Manufacturing in the U.S. is on a decline, but the industry is still a favored business of local government. There are many programs available from State and Local Governments to help encourage the retention, expansion and/or attraction of manufacturing facilities. States will pay $100,000 per job and/or 15 percent of capital costs to secure or retain a manufacturer.

5.Secure favorable utility pricing. Most states have programs available to lower the purchased cost of electricity, gas and water for manufacturers. You can’t get the favorable rates without asking. Typically, these programs can lower utility costs by 15 percent or more.