Solar and CHP Sales Tax Exemption

Solar energy systems have been exempt from Florida's sales and use tax since July 1, 1997. The term "solar energy system" means the equipment and requisite hardware that provide and are used for collecting, transferring, converting, storing, or using incidental solar energy for water heating, space heating and cooling, or other applications that would otherwise require the use of a conventional source of energy such as petroleum products, natural gas, manufactured gas or electricity. This exemption was originally set to expire on July 1, 2002, but it was extended for three more three years. In May 2005, the exemption was made permanent upon the enactment of H.B. 805. In addition, the exemption applies to machinery and equipment used at a fixed location for the purpose of producing electrical or steam energy resulting from the burning of boiler fuels other than residual oil. However, such energy must be primarily used for manufacturing, processing, compounding, or producing for sale items of tangible personal property in Florida. In facilities where machinery and equipment are necessary to burn both residual and non-residual fuels, the exemption is prorated. Furthermore, the purchase of machinery and equipment primarily used in the production, storage, transportation, compression, or blending of green hydrogen (as long as the machinery and equipment are used at a fixed location) is exempt. The exemption also applies to green hydrogen-derived ammonia, if the ammonia is converted back to green hydrogen before use or sale; and machinery and equipment necessary to produce electricity resulting from the electrochemical reaction of green hydrogen and oxygen in a fuel cell.