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.

Louisiana Sales Tax Rates and Exemptions Set to Change...

Friday, May 25th, 2018 -Louisiana's sales tax rates and exemptions are set to change July 1, 2018, when several 2016 law changes will ...

Florida Exempts Generators Used in Assisted Living...

Thursday, May 24th, 2018 -Florida recently adopted an emergency rule on exempt sales of emergency generators for use at nursing homes an...

Washington Penalty Reduction Program

Monday, May 21st, 2018 -Businesses that apply to register with Washington's Marketplace Fairness Penalty Reduction Program by June 30,...

Fuel Used to Heat Detached Garages Taxable in Maine

Monday, May 21st, 2018 -Maine Revenue Services recently released a publication explaining that sales tax applies to fuel that is used ...

Cloud Software No Longer Taxable in Indiana

Thursday, May 17th, 2018 -Effective July 1, 2018, cloud software will no longer be taxable in Indiana. Indiana taxes the sale, lease,...

Sales Tax Increase in the Historic Triangle Region of...

Monday, May 14th, 2018 -Effective July 1, 2018, there will be an additional one percent (1%) regional sales and use tax imposed in the...