New York: Residential Solar Sales Tax Exemption

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. The exemption does not apply to solar pool heating or other recreational applications. There is not an expiration date for this incentive.*

The law also permits 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. 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 (Publication 718-S) is updated several times per year. 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 Publication TSB-M-05(11)S.


* The New York Code contains duplicate sections NYCL Tax § 1115 (ee). The first pertains to the sales tax exemption for residential solar energy systems and contains no expiration date, while the second contains rules for an unrelated exemption with expiration dates of December 1, 2014, and December 1, 2016. This appears to be a mistake that will not affect the sales tax exemption for residential solar energy equipment.