The sales and use tax exemption has been modified and extended for certain solar and other renewable energy systems purchased or installed after Jan. 1, 2020. The exemption expires Jan. 1, 2030.
Engrossed Second Substitute Senate Bill (E2SSB) 5116, Chapter 288, Laws of 2019, provides a partial refund of the sales and use tax paid on machinery and equipment, and labor and services related to their installation, for the following categories of renewable energy systems.
Renewable energy systems capable of generating at least 1kW of electricity using any of the following as the principal source of power:
- Fuel cells.
- Biomass energy.
- Tidal or wave energy.
- Geothermal resources.
- Technology that converts otherwise lost energy from exhaust.
- Solar energy systems capable of generating more than 500 kW AC of electricity.
- Solar energy systems generating over 100 kW, up to 500 kW of electricity.
In both categories, the buyer must pay sales tax to the contractor, and then apply for a refund directly from the Department of Revenue.
- Category one - Refund application - more than one kilowatt of electricity and solar energy system generating over 500 kilowatts
- Category two - Refund application - over 100 kilowatts, up to 500 kilowatts of electricity