Post Content

Thinking of developing a wind farm, or building a single wind turbine?

In a letter ruling issued earlier this month at the request of a taxpayer, DOR ruled that sales of machinery used to construct a wind turbine, tower and components, and the supporting foundation are exempt from Massachusetts sales tax under G.L. c64H Sec. 6(s).

The reason? The turbine, tower and components and supporting foundation qualify as machinery that is used directly and exclusively in furnishing electricity that is delivered to consumers through mains, lines or pipe. Such machinery, according to 64H Sec. 6(s), is exempt from sales tax.

The ruling on wind turbines breaks new ground in that DOR has never before been asked the question about the applicability of this exemption to wind turbines.  It probably won't be the last time.

While the letter ruling applies only to the individual taxpayer, it also sets a precedent which well might apply to which other taxpayers engaged in a similar project. Such taxpayers are urged to contact DOR for clarification rather than to assume the exemption.

The ruling in its concluding paragraph notes that "with respect to other machinery required to build the wind turbine, tower or foundation, such machinery is exempt only if it becomes a part of the integrated and synchronized system that furnishes the electricity to consumers … for example, machinery such as erection cranes, support cranes and bulldozers are subject to tax." 

But the blade, turbine, tower and the equipment used to capture the energy and sent it on its way are exempt from the sales tax. 

With interest growing in harnessing the wind to provide clean and renewable energy, this letter ruling may provide some additional financial incentive to wind energy developers.

Written By:

Recent Posts

Class in Session at DOR University posted on Jan 20

Looking to educate yourself this tax season? Want to learn more about tax options, or DOR-related issues? All this can be achieved at DOR University, the Department of Revenue’s free online e-learning module. DOR University, created to offer free tax education to the public and   …Continue Reading Class in Session at DOR University

Multi-agency investigation in two states leads to charges posted on Nov 19

Earlier this year, the Massachusetts Illegal Tobacco Commission, chaired by DOR Commissioner Amy Pitter, released a report on the illicit tobacco trade which recommends that teaming up with federal, state and local law enforcement can be a successful model for combatting such criminal activity. And   …Continue Reading Multi-agency investigation in two states leads to charges

Top priority: protecting the taxpayer and the Commonwealth’s revenue posted on Oct 8

With identity theft on the rise, the Massachusetts Department of Revenue is taking new steps to combat the problem and protect taxpayers. In some cases, this means asking taxpayers to take a quiz before getting their state refund check. DOR is teaming up with LexisNexis   …Continue Reading Top priority: protecting the taxpayer and the Commonwealth’s revenue