Section Tax 11.10 - Wind, solar, and certain gas powered products(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).Wis. Admin. Code Department of Revenue Tax 11.10
EmR1110: emerg. cr., eff. 6-29-11; CR 11-052: cr. Register July 2012 No. 679, eff. 8-1-12.