Washington State's Renewable Energy Sales and Use Tax Exemption

In the State of Washington, sales of equipment used to generate electricity via sustainable energy are tax-exempt. Energy sources that are eligible for this exemption are wind, sun, fuel cells, biomass energy, tidal or wave energy, anaerobic digestion, geothermal, and landfill gas. This is how the state rewards those who incorporate the use of renewable energy in their homes or businesses.

The sales tax exemption does not only apply to the machinery and equipment, but also to the services and labor connected to the installation of the equipment. To be eligible for tax exemption, the system must be capable of generating a minimum of 1 kilowatt. Small residential systems that generate less that 1 kilowatt are ineligible for this sales tax exemption.

In 2006, HB 2799 was passed and added solar water heating systems to the list. Tax-exempt solar water heating equipment includes the OG-300 rated solar water heating systems, OG-100 rated solar water heating collectors, solar heat exchangers, differential solar controllers, and their replacement parts. This is good news for those using solar heating systems in their facilities.

In May 2009, Washington passed SB 6170, which extends the sales tax and use tax exemptions to June 30, 2011. This legislation will take effect on July 1, 2009 and will be applicable to systems generating electric energy using wind, sun, fuel cells, biomass energy, tidal or wave energy, anaerobic digestion, geothermal, and landfill gas. The tax exemption for solar water heating systems will expire on June 30, 2009. Those who are thinking of installing water heating systems should do so before this deadline.

Those who bought wind, sun, fuel cells, biomass energy, tidal or wave energy, anaerobic digestion, geothermal, and landfill gas systems may file for an exemption, but they need to act fast. From July 1, 2011 to June 30, 2013, the sales tax and use tax will be 25 percent.

SB 6170 also extends the exemption for solar energy systems that generate under 10 kilowatts, until June 30, 2013. Buyers of such systems can present the seller with an exemption certificate to avoid being charged with sales and use taxes.

The exemption does not include property with a useful life of less than one year; hand-powered tools; replacement pairs that don’t increase the productivity of the system; repair parts that are needed to restore the system to normal working order; and buildings or building fixtures that are not necessary for the generation of the energy.

Disclaimer:  This article does not constitute a source of a official legal or financial advice. While we attempt to represent all data as accurately as possible, we advice you to refer to official government websites, for the most accurate and up-to-date information.

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

No comments yet.

Leave a Reply

Leave your opinion here. Please be nice. Your Email address will be kept private.