Biomass Sales and Use Tax Exemption

Georgia exempts biomass materials from state sales and use taxes when they are used to produce energy such as electricity or steam, which lowers the cost of fuels like wood chips, pellets, and agricultural residues. The energy produced must be sold, so this mainly helps those running energy-generating operations rather than ordinary home heating. Contact the Georgia Department of Revenue to confirm whether your situation qualifies.

Customers buying biomass material to produce electricity, steam, or both can avoid state sales and use tax on those purchases, which improves the economics of biomass energy projects. Eligible materials include wood and wood residues, sawmill waste, agricultural crops and residues, nut shells, cotton plants, corn stalks, aquatic plants and grasses, and generally pellets and fuels derived from biomass. The material must be used in energy production and the energy must be sold, and the Georgia Department of Revenue can confirm documentation requirements and any other exemptions available to electricity generators.

This is a sales and use tax exemption created by Georgia HB 1018 in April 2006 and administered by the Georgia Department of Revenue, with no dedicated funding since it operates as foregone tax revenue. It covers biomass material, defined as organic matter excluding fossil fuels, used in producing electricity, steam, or both, and the resulting energy must be sold. It targets commercial and residential sector participants, chiefly energy producers, and generators may also qualify for other Georgia industry exemptions.