Establishes a sales tax exemption for energy storage

• Democratic48
• Republican12

◆ The sponsor's argument

Why Kevin S. Parker says this is needed

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 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, equip- ment,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 generation. 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 addition to greenhouse gas reduction goals, the CLCPA requires the state to have three gigawatts of energy storage installed by 2030. Energy storage is a key enabling technology to achieve the state's renewable energy and climate goals, providing increased grid flexibili- ty, 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 Storage Order adopting the state's roadmap for storage and authorizing the state Energy Research and Development Authority (NYSER- DA) 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.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.