NYS Tax Dept: No sales tax on commercial wind farm [older]

In the oldie but goodie department, the New York State Department of Taxation and Finance Office of Counsel Advisory Opinion Unit issued an Advisory Opinion in December 2009, for PETITION NO. S080416A, relating to whether sales tax would apply to a BP commercial wind farm on leased property.

The Tax Department states:

Petitioner BP Wind Energy North America, Inc. requested an advisory opinion as to whether its construction and installation of a commercial wind farm on leased premises are considered a capital improvement and are subject to sales tax.

We conclude that Petitioner’s installations of its equipment on leased property pursuant to the terms of its lease agreement do not constitute a capital improvement to the leased premises. The assembly and installation of its wind generation equipment used directly and predominantly in the generation of electricity for sale may nonetheless qualify for exemption from sales tax pursuant to the provisions of sections 1115(a)(12), 1105(c)(3) and 1105-B of the Tax Law. The purchases of property, machinery and equipment (and charges for installation of that property) that do not qualify for the exemption for machinery and equipment used directly and predominantly in the generation of electricity for sale are subject to tax.

Advisory Opinion here.

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