Partial Sales and Use Tax Exemption for Agricultural Solar Power Facilities (California)

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Summary

Last modified on December 17, 2014.

Financial Incentive Program

Place California

Name Partial Sales and Use Tax Exemption for Agricultural Solar Power Facilities
Incentive Type Sales Tax Incentive
Applicable Sector Agricultural
Eligible Technologies Photovoltaics
Active Incentive Yes

Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs
Amount 100% of the taxes levied by the State. Local and district sales taxes will still apply.






Equipment Requirements At least half of the electricity produced by the system must be used to power agricultural equipment.



















Program Administrator California State Board of Equalization
Website http://www.boe.ca.gov/sutax/exemptfem.htm
Date added to DSIRE 2012-12-13
Last DSIRE Review 2014-11-06



References DSIREDatabase of State Incentives for Renewables and Efficiency[1]


Summary

California provides a partial exemption of the state's sales and use tax for farm equipment and machinery. The exemption only applies to taxes levied by the State, and not sales and use taxes levied by local governments. Further, the exemption does not apply to the taxes imposed or administered pursuant to sections 6051.2 and 6201.2 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use Tax Law, the Transactions and Use Tax Law, or section 35 of article XIII of the California Constitution.


The California State Board of Equalization issued a Special Notice in November 2012, clarifying that photovoltaic (PV) systems that are used to provide electricity to farm equipment and machinery may qualify for the partial exemption. For any farm equipment or machinery to qualify for the partial exemption, it must be used primarily in producing and harvesting agricultural products. "Primarily" means 50% or more of the time. In the case of PV, according to the Special Notice, 50% or more of the electricity produced by the system must be used to provide power to farm equipment and machinery. The system does not need to be directly connected to the equipment to qualify. The system can be connected to the local electrical grid and used to offset the farm's electrical use through a net metering arrangement with the local utility. Applicants will need to demonstrate, however, that the farm equipment annually consumes at least half of the amount of electricity annually produced by the PV system.


Leased equipment also qualifies for the partial exemption. For more information, including a sample Partial Exemption Certificate, can be found on the web site above.


Incentive Contact

Contact Name Taxpayer Information
Department California State Board of Equalization

Address P.O. Box 942879

Place Sacramento, California
Zip/Postal Code 94279
Phone (800) 400-7115




     
     

Authorities (Please contact the if there are any file problems.)

Authority 1: CA Revenue and Taxation Code § 6356.5




Authority 2: 18 CCR § 1533.1




















  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]

References

  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency"