Effective December 1, 2015, New York has enacted a sales and use tax exemption for certain sales of electricity generated by residential or commercial solar energy systems equipment and sold under a written solar power purchase agreement (PPA). Under a PPA, the owner of the solar energy equipment installs the equipment on a customer’s premises at no charge to the customer, and sells the power generated by the equipment to the customer at a fixed rate established in the agreement. The equipment generating the electricity must be used to provide heating, cooling, hot water, or electricity at the customer’s premises. The exemption applies to sales by a person who is primarily engaged in the sale of residential or commercial solar energy systems equipment and/or electricity generated by such equipment when the electricity is sold under a written PPA. For residential electricity, counties, cities, and certain school districts that impose local sales and use taxes on sales of residential electricity can elect to allow the new exemption. Sales of residential electricity are already exempt from the state and Metropolitan Commuter Transportation District (MCTD) sales and use taxes. The new exemption applies to the state and MCTD sales and use taxes imposed on sales of commercial electricity. Counties, cities, and certain school districts are also allowed to elect the exemption for local sales and use taxes on sales of commercial electricity. (TSB-M-15(5)S, New York Department of Taxation and Finance, November 4, 2015)