Renewable Energy Equipment Exemption

Last updated: January 24, 2020

Program Overview

Implementing Sector:State
Category:Financial Incentive
State:Iowa
Incentive Type:Sales Tax Incentive
Web Site:http://www.state.ia.us/tax/educate/salespubs.html
Administrator:Iowa Department of Revenue
Eligible Renewable/Other Technologies:Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Solar Photovoltaics, Wind (All), Hydroelectric, Solar Pool Heating, Wind (Small), Hydroelectric (Small)
Incentive Amount:100% of sales tax
Maximum Incentive:None

Authorities

Name:Iowa Code § 423.3
Date Enacted:05/26/1993 (subsequently recodified, amended)
Name:H.F. 630
Date Enacted:5/1/2013

Summary

Renewable Energy Equipment Exemption

Iowa allows a sales tax exemption for solar, wind, and hydroelectricity equipment. As of February 2016, the Iowa sales tax rate is 6%.

Wind

For wind energy, the exemption includes the total cost of wind energy equipment and all materials used to manufacture, install, or construct wind energy systems. The exemption does not apply to equipment used to construct a plant to manufacture wind energy systems.

Solar

Effective July 1, 2006, solar energy equipment is also exempt from the state sales tax. Solar equipment means any equipment that is used to convert incident solar radiation to energy, or equipment used to transform the converted energy into storage or to some point of use.

Hydroelectricity

In May 2013 a sales tax exemption was also added for hydroelectricity conversion equipment. This includes, but is not limited to, generators, turbines, powerhouses, intakes, coffer dams, walls, water conduits, tailraces, other concrete components, electric equipment substations, poles, wires, transformers, breakers, and switches used to convert water, water power, or hydroelectricity to a form of usable energy.

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