Client
Large multinational semiconductor manufacturer engaged in advanced chip fabrication and large-scale industrial construction projects across multiple U.S. jurisdictions.
Industry
Industrial Manufacturing / Semiconductor Fabrication
Project Timeframe
Several-month review of a major fabrication facility construction project.
Revenew Services
Sales & Use Tax Recovery
Construction Tax Advisory
Project Scope
The client engaged Revenew to review sales and use tax paid during the construction of a major semiconductor fabrication facility in the United States.
The construction program was structured around large contractor “commit packages,” each containing 100–200 invoices spanning multiple cost categories, including:
- Manufacturing equipment
- Construction materials
- Real property improvements
- Installation labor
- Mixed taxable and non-taxable components
Because many invoices included multiple categories of property and services, determining the proper tax treatment required detailed interpretation of manufacturing exemptions and construction tax rules.
Prior to the review, the client estimated the project might yield approximately $1–$1.5 million in potential recovery.
Revenew’s Approach
Revenew implemented a structured review framework designed to efficiently analyze the construction commits while maintaining defensibility.
- Organized commit packages into logical review groups and prioritized high-value, high-risk categories
- Performed 100% line-item analysis on high-value categories totaling approximately $10 million in tax paid
- Applied statistically supported projection techniques to additional lower-value transactions
- Identified inconsistencies in vendor tax application across similar invoice types
- Analyzed classification issues involving manufacturing equipment, tangible personal property, real property improvements, and installation labor
- Developed tax guidance documentation to support evaluation of future construction projects
Outcomes
- Revenew’s review significantly exceeded the client’s original expectations.
- $15 million in total sales and use tax recovery opportunity identified
- More than 10× the client’s original recovery estimate
- Strengthened tax treatment methodology for future capital construction projects
- Expanded engagement into additional manufacturing facilities across multiple states