Sales Tax Articles
Sales Tax State Activity Update - March 2008
The Golden State Sheds New Light on Solar Energy Construction
California's State Board of Equalization (SBE) has updated their regulation 1521 for Construction Contractors to reflect the addition of coverage for Solar Cells, solar Panels and Solar Modules.
Section (b)(13) was added to describe the differences in solar energy systems. Certain items are classified in subsection (A) as Materials. As such, those types of items become part of a real estate construction contract.
Other items are described in subsection (B) as items that remain fixtures. Generally, items classified as fixtures that do not lose their identity as tangible personal property are subject to the sales tax based on their selling price. In the event a selling price is not available, an earlier section of the regulation provides for the determination of the basis for the tax. Labor to affix solar panels classified as either materials or fixtures are not subject to tax.
The full text can be viewed on the California State Board of Equalization Website.(PDF)
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