Sales and Use Tax Exemption for Electric Power Generation and Storage Equipment

Last updated: June 18, 2019

Program Overview

Implementing Sector:State
Category:Financial Incentive
State:California
Incentive Type:Sales Tax Incentive
Administrator:California Department of Tax and Fee Administration
Start Date:01/01/2018
Expiration Date:07/01/2030
Eligible Renewable/Other Technologies:Geothermal Electric, Solar Thermal Electric, Solar Photovoltaics, Wind (All), Biomass, Combined Heat & Power, Fuel Cells using Non-Renewable Fuels, Landfill Gas, Hydroelectric (Small), Anaerobic Digestion, Fuel Cells using Renewable Fuels
Incentive Amount:100%

Authorities

Name:AB 398

Summary

AB 389 of 2017 created an exemption from the sales and use tax for "qualified tangible personal property purchased for use by a qualified person to be used primarily in the generation or production, or storage and distribution, of electric power." The exemption also applies to contractors who purchase the equipment in the service of a contract with a qualified person. "Qualified person" is defined in the statutes. 

The exemption does not apply to the generation or production of electricity from nuclear energy, large hydro, or fossil fuels, except when used in cogeneration. However, the exemption does apply to the storage and distribution of electric power from any source.  

The exemption also applies to "special purpose buildings and foundations used as an integral part of the generation or production or storage and distribution of electric power."

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