Renewable energy; solar, wind, bio-fuels, geothermal, etc… are currently in vogue today and will probably be here to stay.  An article in the March 10, 2009 Wall Street Journal highlights this point:  “The $787 billion U.S. stimulus plan contains some $94.1 billion over 10 years for clean energy…”  The states are also doing their part to stimulate renewable energy projects by providing numerous corporate tax credits/incentives, sales and use tax exemptions and refunds, and property tax abatements and exemptions.  Red State or Blue State, it does not seem to make a difference on which states provide these renewable energy tax incentives and exemptions.

The focus of this article will be on sales and use tax exemptions for businesses and will exclude sales and use tax exemptions for residential purposes.  For example, Massachusetts has sales tax exemptions for solar, wind, and geothermal heat pumps, but this exemption is only for a primary residence and does not include commercial purposes.  Finally, sales and use tax exemptions that that are not listed within this article may still be negotiated with a state on a case by case basis.  Specifically, some states are providing sales and use tax exemptions for the construction of “Green” Buildings. 

Below is a list of State sales and use tax exemptions for renewable energy equipment:

STATE                                                            EXEMPTION CATEGORY

Alabama                                           None

Alaska                                                N/A (No state sales tax in Alaska)

Arizona                                              Solar, Wind

Arkansas                                           None

California                                         None

Colorado                                           None at the State level (Boulder & Local Option available)

Connecticut                                     EEP*, Solar, Geothermal

Delaware                                          N/A (No sales tax in Delaware)

District of Columbia                     None

Florida                                              REE*, Solar

Georgia                                             Biomass

Hawaii                                              None

Idaho                                                 REE

Illinois                                               None

Indiana                                             None

Iowa                                                   Solar, Wind

Kansas                                               None

Kentucky                                          Biomass, Solar, Wind

Louisiana                                          None

Maine                                                Wind

Maryland                                          Geothermal, Solar,

Massachusetts                                 None

Michigan                                          None

Minnesota                                        Solar, Wind

Mississippi                                       None

Missouri                                            None

Montana                                           N/A (No sales tax in Montana)

Nebraska                                          Wind

Nevada                                              REE

New Hampshire                             N/A (No sales tax in New Hampshire)

New Jersey                                       Solar

New Mexico                                     Biomass, Solar

New York                                          Solar

North Carolina                                None

North Dakota                                  None

Ohio                                                   Biomass, Solar, Wind

Oklahoma                                        None

Oregon                                              N/A (No sales tax in Oregon)

Pennsylvania                                   None

Rhode Island                                   Geothermal, Solar, Wind

South Carolina                                Hydrogen Fuel Cell technology

South Dakota                                  None

Tennessee                                         None

Texas                                                 None

Utah                                                   REE

Vermont                                            REE

Virginia                                             None

Washington                                     REE

Wisconsin                                         REE

West Virginia                                  None

Wyoming                                          REE

 

* Note:  EEP = Energy Efficient Product

               REE=Renewable Energy Equipment (May include Wind, Solar, Biomass and other types)

               Florida’s REE is focused on vehicles and fueling infrastructure – Hydrogen fuel cells, Biodiesel,

               Ethanol, Fueling Stations, Alternative Fuel Vehicles, etc…

 

Source of Information:  DSIRE (Database for State Incentives for Renewables & Efficiency

 

Also important to note is that most of these sales and use tax exemptions have been enacted within the last five years.  So, it is anticipated that additional states will jump on the Green bandwagon and enact sales and use tax exemptions of their own.

 

This article is designed to be high-level and provide general information regarding sales and use tax exemptions.  Specific details regarding the exemptions and requirements can be obtained from the DSIRE website or the various State websites.  However, be on the lookout for State specific Silver Oak Advisors blog articles in the near future that will discuss all types of tax incentives, abatements and exemptions and provide a detailed discussion as well.

Businesses are urged to discuss all of the various exemptions/incentives/abatements with their tax professionals or accountants.  Or, please contact Silver Oak Advisors, LLC for a free no obligation consultation.

 

For more information contact Mike Martin

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