Sales Tax Exemption - Machinery for New and Expanded Industry

December 05, 2023

Summary

Kentucky offers a sales and use tax exemption for machinery for new and expanded industry. In 2021, the Kentucky Department of Revenue offered guidance on how this exemption may apply to solar energy systems.

According to the guidance, solar energy system components that are involved in the production of electricity for sale may be exempt from sales and use tax. The exemption would not apply to components not directly involved in electricity production, like distribution lines, transformers, and battery storage systems. The exemption would also only apply to solar energy systems that produce electricity for sale, rather than for on-site use.

Program Overview

Implementing Sector:	State
Category:	Financial Incentive
State:	Kentucky
Incentive Type:	Sales Tax Incentive
Web Site:	https://revenue.ky.gov/DOR%20Training%20Materials/KY%20TAM%2021-01%20Solar%20Power%20FINAL.pdf
Administrator:
Start Date:
Eligible Renewable/Other Technologies:	Solar Photovoltaics
Incentive Amount:	Exemption from sales and use tax.

Authorities

Name:

K.R.S. 139.480

Name:

Kentucky Technical Advice Memorandum KY-TAM-21-01

Contact

Name:	Office of Tax Policy and Regulation
Organization:	Kentucky Department of Revenue
Address:
Email:	DORtaxpolicy@ky.gov

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.