Sales Tax Credit for Clean Energy Technology

Summary

Tenn. Code Ann. Section 67-6-346 allows a taxpayer to take a credit, apply for a refund of taxes paid, or to apply for authority to make tax-exempt purchases of machinery and equipment used to produce electricity in a certified green energy production facility. A certified green energy production facility is a facility certified by the Department of Environment and Conservation as producing electricity for use and consumption on and off the premises using clean energy technology. Clean energy technology is a technology used to generate electricity from geothermal, hydrogen, solar, or wind sources, and includes storage paired with these technology types. CHP facilities utilizing natural gas for heat production and electricity for on-site consumption are also included.

A contractor who is installing pollution control or green energy machinery and equipment must file an application with the department and must attach a copy of the contract to its application. The taxpayer who hires a contractor must also file an application with the department. If both applications are approved, the authority to purchase tax-exempt will be extended to the contractor for the certified green energy production facility project described in the application. If taxes have been paid, the approved application will be used to support a refund or credit directly to the taxpayer.