Leases of Solar Panels Taxable as Leases of Tangible Personal Property

Tuesday, July 2nd, 2013

 
 
Share
Link
Louisiana
General

In a recent revenue ruling, the Louisiana Department of Revenue (Department) held that the lease of solar panels was a taxable lease of tangible personal property because the panels could be removed easily.

The taxpayer leased solar panels. The panels were installed either on rooftops or on poles mounted in the ground on the lessee's property. The panels were installed in a way that allowed quick removal in case the lessee chose not to renew the lease. The lessees generally used the panels to supplement their energy needs. The panels did not replace the existing hardwiring or electrical systems.

Leases of tangible personal property are subject to tax in Louisiana. Tangible personal property is corporeal moveable property. Corporeal moveable property means those things that normally move or can be moved from one place to another. Immoveable property, on the other hand, means tracts of land and their component parts. Component parts include things incorporated into a building (or other construction) so as to become an integral part of it. The taxpayer argued that the panels were integral component parts of buildings and therefore immoveable.

The Department held that because the panels could easily be removed, the panels were moveable. The panels were not an integral part of the building because they were not intended to be permanent and because they provided a supplement to, rather than a replacement of, the electrical system. The panels were therefore tangible personal property. Because the solar panels were tangible personal property, their lease was subject to tax.

http://www.rev.state.la.us/forms/lawspolicies/RR%2013-006.pdf


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Texas Releases Detailed Guidance on Exempt Organizations

Thursday, October 18th, 2018 -The Texas Comptroller has released a publication that provides detailed information on how sales and use tax a...

Telephone Answering Services Taxable in Arkansas

Tuesday, October 16th, 2018 -The Arkansas Department of Finance and Administration recently ruled that the service of answering calls on be...

Washington Provides Guidance on Lodging Tax for Online...

Friday, October 12th, 2018 -The Washington Department of Revenue released updated guidance that provides tax reporting information for bed...

Economic Nexus in West Virginia

Wednesday, October 10th, 2018 -The West Virginia State Tax Department announced that it will require remote sellers to begin collecting sales...

Idaho Provides Guidance on the Exemption for Medical...

Monday, October 8th, 2018 -The Idaho State Tax Commission recently released guidance that explains Idaho's sales and use tax laws for buy...

Arkansas Does Not Follow Federal Law on Foreign Income

Friday, October 5th, 2018 -The Arkansas Department of Taxation and Finance recently released an opinion that says the state does not conf...