Who qualifies for this exemption?
You can qualify for a sales and use tax exemption for purchases and installation of solar energy systems that produce at least one kilowatt (kW), but no more than 100 kW AC of electricity.
How to qualify for an exemption:
A new bill (E2SSB 5116) provides a 100% sales and use tax exemption on purchases of machinery and equipment used directly in a solar energy system if both of the following apply:
- The system is capable of generating at least 1 kW, but no more than 100 kW, AC of electricity.
- The machinery and equipment are purchased between July 1, 2019 and Dec. 31, 2029.
Installation charges for qualifying solar systems may also be eligible for the sales tax exemption if the installer meets certain requirements. This exemption applies to installations beginning on July 1, 2019, and completed by Dec. 31, 2029.
In order to provide installation services without charging retail sales tax, a qualified business must meet all the following criteria:
- Be registered as a contractor with the Department of Labor and Industries.
- Possess a current state unified business identifier (UBI) number.
- Possess proof of industrial insurance coverage for its employees.
- Possess an Employment Security Department number.
- Possess a state tax registration number.
- Have had no final and binding orders finding violations of federal or state wage and hour laws or regulations in the past 24 months.
This exemption program expires Jan. 1, 2030.
How to report:
The equipment buyer/owner must provide a completed Buyers’ Retail Sales Tax Exemption Certificate to sellers on purchases of equipment, and to installers for labor services, to get the sales tax exemption. The seller and the installer must keep a completed form in their records for five years.
For questions about the exemption or refund program, call Taxpayer Account Administration at 360-705-6218.