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Local Option - Solar Sales Tax Exemption (New York)

Eligibility 
Multi-Family Residential
Residential
Savings Category 
Photovoltaics
Solar Water Heat
Program Info
Start Date 

09/01/2005

State 
New York
Program Type 
Sales Tax Incentive
Rebate Amount 

Upon local authorization, 100% exemption from local sales tax

Provider 
New York State Department of Taxation and Finance

New York enacted legislation in July 2005 exempting the sale and installation of residential solar-energy systems from the state's sales and compensating use taxes. The exemption applies to solar-energy systems that utilize solar radiation to produce energy designed to provide heating, cooling, hot water and/or electricity. In 2012 the exemption was also extended to commercial solar energy systems, effective January 1, 2013. The exemption does not apply to solar pool heating or other recreational applications. The laws also permit local governments (municipalities and counties) to grant an exemption from local sales taxes. If a city with a population of 1 million or more chooses to grant the local exemption, it must enact a specific resolution that appears in the state law. Local sales tax rates in New York range from 1.5% to more than 4% in addition to the general state sales tax rate of 4%.

The New York Department of Taxation and Finance publishes a variety of sales tax reports detailing local tax rates and exemptions, including those for solar energy equipment. The solar sales tax list [http://www.tax.ny.gov/pdf/publications/sales/pub718s.pdf (Publication 718-S)] is updated frequently. The New York Department of Taxation and Finance has issued a small amount of additional guidance and instructions on how to claim the exemption in [http://www.tax.ny.gov/pdf/memos/sales/m05_11s.pdf Publication TSB-M-05(11)S] (residential) and [http://www.tax.ny.gov/pdf/memos/sales/m12_14s.pdf Publication TSB-M-12(14)S] (commercial).