Sales Tax Exemption - Fuel Cells

August 04, 2004


The Maryland Clean Energy Incentives Act provides for a sales tax exemption for fuel cells that: (i) generate electricity and heat using an electrochemical process; (ii) have an electricity-only generation efficiency greater than 35%; and (iii) have a generating capacity of at least 2 kW. Under Maryland law, sales tax for many types of heating, ventilation, and air conditioning equipment is charged at the wholesale level and not to the consumer directly. Therefore, in this case, the contractor who installs the fuel cell is the one who would pay the sales tax and, therefore, is eligible to receive the tax exemption. The process for obtaining the tax exemption for the following equipment requires the applicant to submit four documents to the Maryland Comptrollers Office: (1) system components purchased as a package; (2) Invoice from vendor showing sales tax was actually paid; (3) Statement or Certification from manufacturer, vendor or accepted industry rating association showing that the system meets applicable efficiency rating requirements; (4) Comptroller Sales and Use Tax Refund Application (The application form, # COT/ST 205, can be downloaded from the Web site shown above).

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Maryland
Incentive Type: Sales Tax Incentive
Web Site:
Administrator: Maryland Energy Administration
Start Date: 7/1/2000
Eligible Renewable/Other Technologies:
  • Fuel Cells using Non-Renewable Fuels
  • Fuel Cells using Renewable Fuels
Incentive Amount: 100%
Maximum Incentive: none
Equipment Requirements: Electric efficiency of greater than 35%; at least 2kW


Name: Maryland Code: Tax - General § 11-226
Date Enacted: 7/1/2000
Effective Date: 7/1/2000
Expiration Date: 7/1/2004


Name: Louise Collins
Organization: Comptroller of Maryland
Annapolis MD 21411-0001
Phone: (410) 260-7980

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.