Electricity sales tax for power storage equipment

When is electricity exempt from sales and use taxes?

Electricity is exempt from sales and use taxes when it is used for specific manufacturing or production purposes. You may be eligible for a sales tax exemption if you are in these businesses: Companies that operate large residential facilities may also qualify for an exemption.

Are electricity sales taxable?

The two largest revenue streams from producing electricity through renewable sources are electricity sales and renewable energy certificates (REC). The sale of electricity is typically taxable except in states with exemptions. An exemption taxpayers should examine is whether electricity is at retail or for resale.

Do electric vehicle batteries qualify for a sales tax exemption?

Taxpayers with battery storage at their facility should determine whether storing and releasing electricity could qualify for a production exemption from sales tax. This also applies for charging electric vehicle batteries.

Does a bundled electricity sale qualify for a sales tax exemption?

If sold together in a bundled transaction, taxpayers should determine whether the electricity or REC is the true object of the transaction. Taxpayers with battery storage at their facility should determine whether storing and releasing electricity could qualify for a production exemption from sales tax.

Does Washington have a sales tax exemption for solar energy?

Washington also provides a sales tax exemption for solar energy system machinery and equipment under specific criteria. States generally treat electricity as tangible personal property for sales tax purposes and thus may provide for manufacturing exemptions.

Are solar panels exempt from sales tax?

Many states have either a solar or wind exemption, which provides that equipment used for electricity generation by either solar or wind be exempt from sales tax. Florida, for example, provides an exemption for solar energy systems, and New York provides a specific sales and use tax exemption for solar modules and panels.