Kentucky offers a sales and use tax exemption for machinery for new and expanded industry. In 2021, the Kentucky Department of Revenue offered guidance on how this exemption may apply to solar energy systems.
According to the guidance, solar energy system components that are involved in the production of electricity for sale may be exempt from sales and use tax. The exemption would not apply to components not directly involved in electricity production, like distribution lines, transformers, and battery storage systems. The exemption would also only apply to solar energy systems that produce electricity for sale, rather than for on-site use.
| Implementing Sector: | State |
| Category: | Financial Incentive |
| State: | Kentucky |
| Incentive Type: | Sales Tax Incentive |
| Web Site: | https://revenue.ky.gov/DOR%20Training%20Materials/KY%20TAM%2021-01%20Solar%20Power%20FINAL.pdf |
| Administrator: | |
| Start Date: | |
| Eligible Renewable/Other Technologies: |
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| Incentive Amount: | Exemption from sales and use tax. |
| Name: | K.R.S. 139.480 |
| Name: | Kentucky Technical Advice Memorandum KY-TAM-21-01 |
| Name: | Office of Tax Policy and Regulation |
| Organization: | Kentucky Department of Revenue |
| Address: |
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| Email: | DORtaxpolicy@ky.gov |
This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.
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