Current through August 26, 2024
(1) GENERAL.
Section
77.54(56),
Stats., provides a sales and use tax exemption for the following:
(a) The sales price from the sale of and the
storage, use, or other consumption of a product whose power source is wind
energy, direct radiant energy received from the sun, or gas generated from
anaerobic digestion of animal manure and other agricultural waste, if the
product produces at least 200 watts of alternating current or 600 British
thermal units per day, except that the exemption does not apply to an
uninterruptible power source that is designed primarily for
computers.
(b) Except for the sale
of electricity or energy that is exempt from taxation under s.
77.54(30),
Stats., the sales price from the sale of and the storage, use, or other
consumption of electricity or energy produced by a product described in par.
(a).
(2) DEFINITIONS. In
this section and in s.
77.54(56),
Stats.:
(a) "Agricultural waste" means a
byproduct of farming.
(b) "Farming"
has the meaning given in s.
Tax 11.12(2) (f), except "farming"
includes holding livestock in a feed lot for less than 30 days.
(c) "Feed lot" has the meaning given in s.
Tax 11.12(2) (g).
(d) "Gas" means a fuel that is comprised
primarily of methane and exists in a gaseous state at normal room temperature
and pressure.
(e) "Product" means
tangible personal property that converts wind energy, direct radiant energy
received from the sun, or gas generated from the anaerobic digestion of animal
manure and other agricultural waste into alternating current electricity or
heat.
(3) ITEMS WHICH
ARE PRODUCTS. Product, as defined in sub. (2) (e), includes the following
items:
(a) Wind turbine generators, including
blade assembly and tower.
(b) Gas
powered electric generators.
(c)
Gas fueled furnaces, space heaters, and water heaters.
(d) Photovoltaic cells, modules, and arrays,
including tracking equipment that maintains optimal orientation to the
sun.
(e) Solar thermal
collectors.
(f) Inverters used to
transform direct current produced by an item described in sub. (2) into
alternating current, including property used to convey the direct current from
the product to the inverter.
(g)
Hardware required for installation of an item described in pars. (a) to
(f).
(4) ITEMS WHICH ARE
NOT PRODUCTS. Product, as defined in sub. (2) (e), excludes the following
items:
(a) Tangible personal property that
consumes electricity or heat produced by an item described in sub. (2) (e).
Example: A refrigerator that consumes
electricity produced by a wind turbine generator is not itself a product whose
power source is wind energy.
(b) A foundation for an item described in
sub. (2) (e).
Example: A solar tracking device that holds an
array of photovoltaic cells is installed onto a concrete foundation. The
concrete foundation is not a product whose power source is direct radiant
energy received from the sun.
(c) Except as provided in sub. (3) (f),
property necessary to convey, transfer, or alter electricity or heat generated
by an item described in sub. (2) (e).
(d) Tangible personal property used to store
electricity or heat produced by an item described in sub. (2) (e).
Examples:
1) A tank that stores hot water heated by a
solar collector is not itself a product whose power source is direct radiant
energy received from the sun.
2)
Batteries used to store electricity produced by a wind turbine generator or
photovoltaic cells are not themselves products whose power source is wind
energy or direct radiant energy received from the sun.
(5) EXEMPTION FOR PRODUCTS.
(a) For purposes of the exemption under sub.
(1) (a), a product that produces direct current shall be considered to produce
alternating current if the direct current is modified to alternating current
prior to the direct current being stored, used, consumed, or sold by the
producer.
Examples:
1) An array of photovoltaic cells produces
direct current. All of the current produced by the array is transferred
directly to an inverter. The alternating current from the inverter is then
either used to power equipment or it is sold to a utility. The photovoltaic
array is considered to meet the requirement that it be a product that produces
alternating current.
2) A wind
turbine generator produces direct current. The current is used to charge
batteries. When needed, the batteries supply direct current to an inverter,
producing alternating current used to power various devices. The direct current
generator does not qualify for exemption since the direct current is being
stored by the producer prior to changing it to alternating current.
(b) In order to qualify for the
exemption under sub. (1) (a), a product using gas as a power source shall use
gas from the anaerobic digestion of animal manure and other agricultural waste
exclusively as its power source. A product that uses other fuels such as
natural gas, propane, or gas generated from a landfill does not qualify for
exemption.
(c) Products that
qualify for the exemption under sub. (1) (a) include the following:
1. An alternating current wind turbine
generator rated by the manufacturer to produce at least 200 watts of
alternating current with a wind speed of 25 miles per hour.
2. A direct current wind turbine generator
that is rated by the manufacturer to produce at least 250 watts of direct
current at a wind speed of 25 miles per hour and produces alternating current
as described in par. (a).
Example: A direct current wind turbine generator
is rated by the manufacturer to produce at least 250 watts of direct current
with a wind speed of 25 miles per hour. The generator is connected to an
inverter that modifies the direct current to alternating current prior to the
direct current being stored, used, consumed, or sold by the producer. The
generator, inverter, and the property used to convey the direct current from
the generator to the inverter qualify for exemption.
3. A direct current wind turbine generator
that produces alternating current as described in par. (a) of at least 200
watts as measured at the inverter under normal operating conditions with a wind
speed of no more than 25 miles per hour.
4. A solar thermal collector with an output
rating of at least 600 British thermal units per day, as determined by the
Solar Rating and Certification Corporation, that is normally in service every
day throughout the year.
5. A
photovoltaic cell, module, or array with a standard test condition output
rating of at least 250 watts of direct current that produces alternating
current as described in par. (a).
6. A direct current gas powered generator
that meets the requirement in par. (b) and produces alternating current as
described in par. (a) of at least 200 watts as measured at the inverter when
producing direct current under its normal operating conditions.
7. A gas fueled furnace, space heater, or
water heater that meets the requirement in par. (b) and can be expected to
consume gas in an amount equivalent to at least 600 British thermal units per
day throughout the year.
Example: Gas generated by the anaerobic
digestion of animal manure or agricultural waste is used solely as the power
source for a space heater and a water heater. Both products, when in use,
produce over 600 British thermal units per day. The water heater is used every
day of the year while the space heater is used only during the months of
October through April. The water heater qualifies for exemption; the space
heater does not.
(d) The exemption under sub. (1) (a) may be
claimed by the consumer of the product who purchases the product as tangible
personal property. A contractor who will purchase, furnish, and install a
product which will become real property when installed is the consumer of the
product, and may provide its supplier with a properly completed exemption
certificate, claiming the product is exempt under s.
77.54(56),
Stats. A contractor who will furnish and install a product that will remain
tangible personal property when installed may purchase a product without tax
for resale. The purchaser may then issue the contractor an exemption
certificate, claiming the product is exempt under s.
77.54(56) (a), Stats.
Note: See s.
Tax 11.68(4), (5), and (6) for
information on the determination of the classification of property after
installation.
(6)
EXEMPTION FOR ENERGY PRODUCED BY A PRODUCT.
(a) The exemption under sub. (1) (b) applies
to a direct sale from the producer of electricity or energy to the consumer of
the same electricity or energy where all of the following apply:
1. The electricity or energy is produced by a
product that qualifies for exemption under sub. (1) (a).
2. The sale does not qualify for exemption
under s.
77.54(30),
Stats.
Note: Section
77.54(30) (a), Stats., includes an exemption for
electricity sold from November through April for residential use, fuel and
electricity sold for use in farming, and fuel and electricity consumed in
manufacturing tangible personal property in Wisconsin.
(b) The exemption under sub. (1)
(b) does not apply to electricity or energy which is first purchased for resale
from the producer and is then sold in a subsequent retail sale, unless the
person making the retail sale is able to account for the quantity of
electricity or energy that qualifies for exemption under s.
77.54(56) (b), Stats., and is able to identify the
person to whom such electricity or heat is sold.
Example: Electricity that would otherwise
qualify for exemption under s.
77.54(56) (b), Stats., is commingled in a distribution
network with electricity that is not produced by a product whose power source
is wind energy, direct radiant energy received from the sun, or gas generated
from anaerobic digestion of animal manure and other agricultural wastes. It is
not possible to determine to whom, or in what amount, the electricity that
qualifies for exemption is sold. A purchaser of this electricity will not be
able to provide an exemption certificate to a utility and properly claim what
portion of the electricity it has purchased is exempt pursuant to s.
77.54(56) (b), Stats., nor is it possible for a utility
to know what portion of the electricity purchased by the consumer was from
eligible sources.
(c) The
exemption under sub. (1) (b) does not apply to the sale of, or the storage, use
or other consumption of gas produced by the anaerobic digestion of animal
manure or other agricultural wastes unless such gas is produced by a product
described in sub. (1) (a).
