Washington Enacts Exemptions for Solar Energy Systems

Effective July 1, 2019, Washington has enacted a sales tax exemption on the purchase and installation of qualified solar energy systems. The exemption covers sales tax paid on the purchase and installation of solar energy systems that generate up to 100 kilowatts AC of electricity. The exemption only applies to purchase made on or after July 1, 2019. In order to claim the exemption, purchasers must complete and provide a Buyer’s Retail Sales Tax Exemption Certificate to the seller. Sellers are required to maintain the exemption certificate in their records for five years. To qualify for the exemption on the installation charges, the seller must:

• Be registered with the Washington Department of Labor and Industries as a contractor
• Possess a current state unified business identifier (UBI) number
• Possess proof of industrial insurance coverage
• Possess an Employment Security Department number
• Have no findings of violations of federal or state wage and hour laws and regulations in the past 24 months

Effective January 1, 2020, larger solar energy systems that generate between 101 and 500 kilowatts AC can qualify for a sales and use tax exemption. Sellers of these larger systems will collect sales tax and submit it to the state, and customers will need to request a refund from the Department of Revenue. (News Release, Washington Department of Revenue, July 1, 2019)