Sales and Use Tax Credit for Emerging Clean Energy Industry

July 16, 2021


Tenn. Code Ann. § 67-6-232 has been repealed, this program is no longer available.

In June 2009, Tennessee enacted the Tennessee Clean Energy Future Act of 2009 and expanded its Sales and Use Tax Credit for Emerging Industries to manufacturers of clean energy technologies on the sale or use of qualified tangible personal property. The Sales and Use Tax is reduced to 0.5% for clean energy technology manufacturers. Clean energy technologies are defined as those that result in energy efficiency and technologies that use biomass, geothermal, hydrogen, hydropower, landfill, solar, and wind to generate energy. Qualifying manufacturers must make a minimum $100 million investment, create and maintain 50 full-time jobs for 10 years that pay 150% above the Tennessee occupational average wage, and the taxpayer must be subject to the franchise and excise taxes.

The taxpayer must submit an application to the Department of Revenue to be certified as a qualified facility. Both the Department of Revenue and Department of Economic and Community Development must determine that the allowance of the credit is in the best interests of the state. Once approved as a qualified facility, the taxpayer must submit a claim for credit and documentation that the sales and use tax has been paid on qualified tangible property. Qualified property includes building materials, machinery, and equipment used in the qualified facility and purchased (or leased) during the investment period. The Department of Revenue will then provide a determination to the taxpayer on the amount and how to take the credit.

For additional information, review the Sales and Use Tax Guide found at the Department of Revenue website or contact them directly.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Tennessee
Incentive Type: Industry Recruitment/Support
Web Site:
Administrator: Tennessee Department of Revenue
Start Date: 07/01/2009
Eligible Renewable/Other Technologies:
  • Solar Water Heat
  • Solar Space Heat
  • Geothermal Electric
  • Solar Thermal Electric
  • Solar Thermal Process Heat
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Hydroelectric
  • Hydrogen
  • Geothermal Heat Pumps
  • Landfill Gas
  • Solar Pool Heating
  • Wind (Small)
  • Hydroelectric (Small)
  • Anaerobic Digestion
  • Other Distributed Generation Technologies
Incentive Amount: Tax rate reduced to 0.5%
Terms: Taxpayer must make $100 million investment (minimum) and create 50 full-time jobs at 150% rate of Tennessee's average occupational wage.


Name: Tenn. Code § 67-6-232


Name: Department of Revenue Information
Organization: Tennessee Department of Revenue
Address: Andrew Jackson Building, Room 1200
Nashville TN 37242-1099
Phone: (615) 741-2461

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.