Massachusetts ruled that the state sales tax does not apply to wind turbines, towers and foundations.
The state sales tax is 6.25%. It does not apply to “machinery” that is used “directly and exclusively” in furnishing “power to an industrial manufacturing plant” or “electricity when delivered to consumers through mains, lines or pipes.” An independent generator plans to install a single 1.65-megawatt wind turbine inside the fence at an industrial site. It plans to supply all of the electricity to a realty trust that is leasing it the site. The trust will provide 5% of the electricity to the other, industrial tenant on the site and resell the remaining 95% to the local utility.
The Massachusetts Department of Revenue said in a letter ruling in July that the turbine, tower and foundation are all exempted from sales tax as “machinery.” The ruling did not discuss whether the independent generator is furnishing electricity to “consumers through mains, lines or pipes.”
The ruling is Letter Ruling 10-3.