New York Approves Sales Tax Exemption and Personal Income Tax Credit for Solar Systems

September 01, 2005

New York solar energy systems become exempt from state sales taxes on September 1. New York Governor George Pataki signed a bill (S.4962-a) on August 1 that exempts both the sale and installation of the equipment from state sales and compensating use taxes. The new law also allows municipalities to waive their city sales taxes on the sale of solar equipment.

Pataki also signed a separate bill (S.5252) that extends the state's personal income tax credit for solar energy systems to include systems used for water heating and space heating or cooling. The credit applies to 25% of the cost of buying and installing solar energy equipment, and now has a cap of $5,000, up from $3,750. See the governor's August 1 press release.

For information about incentives available in other states, see the Database of State Incentives for Renewable Energy (DSIRE) Web site.