Transaction Privilege (“Sales”) Tax Exemptions:
A.R.S. § 42-5061(N) provides that a registered solar energy retailer may exclude from tax up to $5,000 from the sale of each solar energy device. A.R.S. § 42-5075(B)(14) allows a registered solar energy contractor to exclude up to $5,000 of income derived from a contract to provide and install a solar energy device. For more information, please contact the Arizona Energy Office at (602) 280-1402.
To take advantage of these exemptions from tax, a solar energy retailer or a solar energy contractor must register with the Arizona Department of Revenue prior to selling or installing solar energy devices. (Arizona Form 6015, Solar Energy Devices – Application for Registration, is available on the Arizona Department of Revenue’s website at www.AZDOR.gov) The Arizona Energy Office (Arizona Department of Commerce) has compiled a guide to the solar energy devices that qualify for exemption under the statutory definition [See A.R.S. § 42-5001(15)]. It is possible to petition the Arizona Department of Commerce to add additional items if they qualify per the statutory definition.
Most cities have a 0.5 to 2% city privilege (“sales”) tax that is applicable to sales or installations of solar energy devices, unless a city specifically exempts such sales under its city tax code. Solar energy retailers should check with the city in which the retail business is located to find out whether city privilege tax is applicable. Solar energy contractors should check with the city in which the installation will be performed to find out whether city privilege tax is applicable. (updated 2/15/05)
