Indiana Exempts Solar Power Plant Production Equipment

Friday, January 16th, 2015

Solar panels.

The Indiana Department of Revenue released a letter ruling discussing the taxability of equipment used in solar power plants.

The taxpayer planned to develop and operate solar power plants and sell the energy produced to customers. The taxpayer needed to purchase (1) modules to convert sunlight into electricity, (2) racking to install modules in, (3) inverters to change direct current generated by the modules to alternating current for use, (4) MV transformers to change medium voltage current into a high voltage current for transport, and (5) monitoring equipment used to monitor the performance of the entire system.

Manufacturing equipment acquired for direct use in the production of tangible personal property is exempt. Electricity is considered tangible personal property in Indiana. The "direct use" requirement means the equipment must have an immediate effect on the property produced. Equipment must be an essential and integral part of the production process to be exempt.

The modules, racks, and inverters were exempt manufacturing equipment. Each component immediately affected the electricity and was essential and integral to the production of electricity. However, the MV transformers and monitoring equipment were not exempt. The transformers were used to transmit and distribute electricity, not produce it. The monitoring equipment did not have an immediate effect on the electricity, but simply monitored exempt production equipment. These items were therefore not exempt.

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 or call 866.578.8193.

Texas Exempts Boats and Motors Temporarily Used in the...

Wednesday, June 26th, 2019 -Texas has recently passed a bill creating an exemption for boats and motors purchased for use outside of the s...

Data Survey Services Not Taxable in South Carolina

Monday, June 24th, 2019 -The South Carolina Department of Revenue recently ruled that business data survey services were non-taxable pr...

Senior Center Cafeterias are Taxable in Missouri

Friday, June 21st, 2019 -Missouri's Director of Revenue recently issued a letter ruling taxing the sale of cafeteria food by a 501(c)(3...

Hot-Air Balloon Rides in Missouri are Taxable When...

Wednesday, June 19th, 2019 -Missouri recently released a letter ruling addressing the taxation of hot-air balloon rides. The taxpayer was ...

Nevada Exempts Certain Medical Equipment

Monday, June 17th, 2019 -Effective July 1, 2019, Nevada will exempt durable medical equipment, oxygen delivery equipment, and mobility ...

Participatory Sports are Taxable in New York

Friday, June 14th, 2019 -The New York Division of Tax Appeals recently denied a refund claim made by an instructor-led indoor spin clas...