What's happening
This bill exempts residential and commercial energy storage systems and related electricity sales from New York State sales tax.
Why it matters
Encourages adoption of energy storage systems. By exempting both residential and commercial energy storage equipment and their installation from state sales tax, the bill lowers upfront costs, making it more financially attractive for homeowners and businesses to invest in energy storage technology.
Facilitates innovative ownership and energy models. The tax exemption extends to electricity sold via third-party-owned storage systems installed on-site (e.g., leasing or power purchase agreements), potentially accelerating the spread of new business models and expanding access to energy storage for those unable or unwilling to purchase systems outright.
Targets grid modernization and renewable integration. By making energy storage more accessible, the bill supports efforts to modernize the grid, improve reliability, and integrate intermittent renewable energy sources (like solar and wind), which rely on storage to balance supply and demand.
Aligns state and local tax policy but requires local action. While the bill mandates the exemption at the state level, it allows cities and counties to opt in or out of the exemption for their own local sales taxes, meaning the total savings will depend on local government decisions—impacting the uniformity and overall effectiveness of the policy.
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Who cares
Headline styles
End Tax on Energy Storage
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to budget and revenue
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
No Tax on Energy Storage
In Assembly Committee · Ways And Means · Sponsor Michael Cusick
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8219
IN SENATE
April 22, 2020
Introduced by Sen. PARKER -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to establishing a sales tax exemption for energy storage
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1115 of the tax law is amended by adding two new subdivisions (ll) and (mm) to read as follows:
(ll) The following shall be exempt from tax under this article: (1) Receipts from the retail sale of, and consideration given or contracted to be given for, or for the use of, residential energy storage systems equipment and the service of installing such systems. For the purposes of this subdivision, "residential energy storage systems equipment" shall mean an arrangement or combination of components installed in a residence that stores electricity for use at a later time to provide heating, cooling, hot water and/or electricity.
(2) Receipts from the sale of electricity by a person primarily engaged in the sale of energy storage system equipment and/or electricity generated by such equipment pursuant to a written agreement under which such electricity is generated by residential energy system storage equipment that is: (A) owned by a person other than the purchaser of such electricity; (B) installed on residential property of the purchaser of such electricity; and (C) used to provide heating, cooling, hot water or electricity.
(mm) The following shall be exempt from tax under this article: (1) Receipts from the retail sale of, and consideration given or contracted to be given for, or for the use of, commercial energy storage systems equipment and the service of installing such systems. For the purposes of this subdivision, "commercial energy storage systems equipment" shall mean an arrangement or combination of components installed upon non-residential premises that stores electricity for use at a later time to provide heating, cooling, hot water and/or electricity. Such arrangement or components shall not include equipment that is part of a non-solar energy system.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15984-01-0
S. 8219 2
(2) Receipts from the sale of electricity by a person primarily engaged in the sale of energy storage system equipment and/or electricity generated by such equipment pursuant to a written agreement under which the electricity is generated by commercial energy system equipment that is: (A) owned by a person other than the purchaser of such electricity; (B) installed on the non-residential premises of the purchaser of such electricity; and (C) used to provide heating, cooling, hot water or electricity to such premises.
§ 2. Paragraph 1 of subdivision (a) of section 1210 of the tax law, as amended by section 2 of part WW and subparagraph (i) as separately amended by section 5 of part Z of chapter 60 of the laws of 2016, is amended to read as follows:
(1) Either, all of the taxes described in article twenty-eight of this chapter, at the same uniform rate, as to which taxes all provisions of the local laws, ordinances or resolutions imposing such taxes shall be identical, except as to rate and except as otherwise provided, with the corresponding provisions in such article twenty-eight, including the definition and exemption provisions of such article, so far as the provisions of such article twenty-eight can be made applicable to the taxes imposed by such city or county and with such limitations and special provisions as are set forth in this article. The taxes authorized under this subdivision may not be imposed by a city or county unless the local law, ordinance or resolution imposes such taxes so as to include all portions and all types of receipts, charges or rents, subject to state tax under sections eleven hundred five and eleven hundred ten of this chapter, except as otherwise provided. (i) Any local law, ordinance or resolution enacted by any city of less than one million or by any county or school district, imposing the taxes authorized by this subdivision, shall, notwithstanding any provision of law to the contrary, exclude from the operation of such local taxes all sales of tangible personal property for use or consumption directly and predominantly in the production of tangible personal property, gas, electricity, refrigeration or steam, for sale, by manufacturing, processing, generating, assembly, refining, mining or extracting; and all sales of tangible personal property for use or consumption predominantly either in the production of tangible personal property, for sale, by farming or in a commercial horse boarding operation, or in both; and all sales of fuel sold for use in commercial aircraft and general aviation aircraft; and, unless such city, county or school district elects otherwise, shall omit the provision for credit or refund contained in clause six of subdivision (a) or subdivision (d) of section eleven hundred nineteen of this chapter. (ii) Any local law, ordinance or resolution enacted by any city, county or school district, imposing the taxes authorized by this subdivision, shall omit the residential solar energy systems equipment and electricity exemption provided for in subdivision (ee), the commercial solar energy systems equipment and electricity exemption provided for in subdivision (ii), the commercial fuel cell electricity generating systems equipment and electricity generated by such equipment exemption provided for in subdivision (kk), the residential energy storage systems equipment and electricity exemption provided for in subdivision (ll), the commercial energy storage systems equipment and electricity exemption provided for in subdivision (mm) and the clothing and footwear exemption provided for in paragraph thirty of subdivision (a) of section eleven hundred fifteen of this chapter, unless such city, county or school district elects otherwise as to such residential solar energy systems equipment and electricity exemption,
S. 8219 3
such commercial solar energy systems equipment and electricity exemption, commercial fuel cell electricity generating systems equipment and electricity generated by such equipment exemption or such clothing and footwear exemption.
§ 3. Subdivision (d) of section 1210 of the tax law, as amended by section 4 of part WW of chapter 60 of the laws of 2016, is amended to read as follows:
(d) A local law, ordinance or resolution imposing any tax pursuant to this section, increasing or decreasing the rate of such tax, repealing or suspending such tax, exempting from such tax the energy sources and services described in paragraph three of subdivision (a) or of subdivision (b) of this section or changing the rate of tax imposed on such energy sources and services or providing for the credit or refund described in clause six of subdivision (a) of section eleven hundred nineteen of this chapter, or electing or repealing the exemption for residential solar equipment and electricity in subdivision (ee) of section eleven hundred fifteen of this article, or the exemption for commercial solar equipment and electricity in subdivision (ii) of section eleven hundred fifteen of this article, or electing or repealing the exemption for commercial fuel cell electricity generating systems equipment and electricity generated by such equipment in subdivision (kk) of section eleven hundred fifteen of this article, or the exemption for residential energy storage equipment or electricity in subdivision (ll) of section eleven hundred fifteen of this article, or the exemption for commercial energy storage equipment and electricity in section (mm) of section eleven hundred fifteen of this article must go into effect only on one of the following dates: March first, June first, September first or December first; provided, that a local law, ordinance or resolution providing for the exemption described in paragraph thirty of subdivision (a) of section eleven hundred fifteen of this chapter or repealing any such exemption or a local law, ordinance or resolution providing for a refund or credit described in subdivision (d) of section eleven hundred nineteen of this chapter or repealing such provision so provided must go into effect only on March first. No such local law, ordinance or resolution shall be effective unless a certified copy of such law, ordinance or resolution is mailed by registered or certified mail to the commissioner at the commissioner's office in Albany at least ninety days prior to the date it is to become effective. However, the commissioner may waive and reduce such ninety-day minimum notice requirement to a mailing of such certified copy by registered or certified mail within a period of not less than thirty days prior to such effective date if the commissioner deems such action to be consistent with the commissioner's duties under section twelve hundred fifty of this article and the commissioner acts by resolution. Where the restriction provided for in section twelve hundred twenty-three of this article as to the effective date of a tax and the notice requirement provided for therein are applicable and have not been waived, the restriction and notice requirement in section twelve hundred twentythree of this article shall also apply.
§ 4. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to establishing a sales tax exemption for energy storage
Purpose or general idea of bill
This legislation would exempt, from state sales and use taxes, retail sale and installation of energy storage equipment, for both residential and commercial uses. The legislation would also provide local govern- ments with the authority to exempt energy storage from local sales and use taxes.
Summary of provisions
Section 1: Amends section 1115 of the tax law by adding subdivisions
Read the full memo (687 words)
(11) and (mm) so that residential energy storage systems equipment and the service of installing such systems are exempt from state sales and use taxes.
Sections 2 and 3: Amends section 1210 of the tax law so that local governments have the option to apply such exemptions locally.
Justification
New York State tax law provides sales and use tax exemptions for a number of activities, products, and services. Notably, the sale and installation of residential and commercial solar energy equipment and commercial fuel cells are exempt from the state sales and use tax and certain localities have followed suit. The energy storage energy has attempted to rely on existing sections of the state tax law to seek a similar exemption from state sales and use taxes. For example, Section 1115(a)(12) of the tax law provides an exemption for machinery and equipment for use and consumption directly and predominantly in the production of electricity by generating. Section 1105-B of the tax law also exempts parts, tools, and supplies used in the production of elec- tricity for sale by generating. Receipts from the services of install- ing, repairing, maintaining, or servicing such machinery, equipment, parts, tools, and supplies are exempt from the tax imposed on these services under section 1105(c) (3).
However, according to an advisory opinion (1) issued by the Department of Tax and Finance in relation to a specific project, the energy storage equipment must first be considered a generation facility, and section 1115(a) (12) of the tax law requires that the machinery and equipment be used directly and predominantly in the production of electricity for sale by generating. This interpretation is problematic for energy stor- age which is typically used to inject energy into the energy grid less than 50 percent of the time.
Moreover, energy storage is not considered generation under Public Service Law, and thus attempting to define it as generation for the purposes of tax law could create a more complex and troublesome legal situation in relation to the treatment of storage for other purposes. In 2019, New York State codified the most aggressive climate goals in the nation, requiring New York to achieve 100 percent carbon-free energy by 2040 (The Climate Leadership and Community Protection Act). In addi- tion to greenhouse gas reduction goals, the CLCPA requires the state to have three gigawatts of energy storage installed by 2030. Energy stor- age is a key enabling technology to achieve the 'state's renewable ener- gy and climate goals, providing increased grid flexibility, enabling the wide scale deployment of renewable energy, promoting efficient use of grid resources, and enhancing grid resiliency. The state Public Service Commission recognized the critical role for storage in its Energy Stor- age Order adopting the state's roadmap for storage and authorizing the state Energy Research and Development Authority (NYSERDA) to implement new incentive programs for energy storage. While these efforts have jumpstarted energy storage projects across the state, the cost of deploying and siting energy storage remains high.
This legislation will help reduce the cost of deploying energy storage projects by providing an exemption from state taxes for the sale and installation of energy storage equipment, both residential and commer- cial, and providing municipalities the option to grant such exemptions for local sales tax. The legislation will give energy storage technology similar tax exemptions to solar energy and fuels cells, creating a fair and level playing field for clean energy technologies while stimulating the state's economy and creating new green collar jobs.
Prior legislative history
None.
Fiscal implications for state and local governments
Undetermined.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.