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California

California

Incentives/Policies for Renewables & Efficiency

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Partial Sales and Use Tax Exemption for Agricultural Solar Power Facilities   

Last DSIRE Review: 12/13/2012
Program Overview:
State: California
Incentive Type: Sales Tax Incentive
Eligible Renewable/Other Technologies: Photovoltaics
Applicable Sectors: Agricultural
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.
Web Site: http://www.boe.ca.gov/sutax/exemptfem.htm
Authority 1:
CA Revenue and Taxation Code § 6356.5
Authority 2:
18 CCR § 1533.1
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.

 


 
Contact:
  Taxpayer Information
California State Board of Equalization
P.O. Box 942879
Sacramento, CA 94279
Phone: (800) 400-7115
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.