Sales and Use Taxes for Items Used in Renewable Energy Industries

This program does not directly benefit homeowners. It provides sales and use tax exemptions on machinery, equipment, materials, and fuel for companies that manufacture or develop solar, wind, and geothermal renewable energy systems—not for homeowners purchasing those systems for their own properties.

If your business manufactures, produces, improves, or develops solar (photovoltaic or thermal), wind, or geothermal systems, you may qualify for a Connecticut sales and use tax exemption on equipment, machinery, tools, materials, supplies, and fuel directly used in those production processes. Qualifying items must directly transform raw materials, be predominantly used during manufacturing/development activities, or be used to control, monitor, or test products being produced; the exemption has been in effect since July 1, 2010.

This statutory exemption under Conn. Gen. Stat. §12-412(117)(B)—enacted May 2010 and effective July 1, 2010—removes sales tax on tangible personal property (machinery, equipment, tools, materials, supplies, fuel) used directly in renewable energy and clean energy technology manufacturing and development for solar, wind, and geothermal industries. Eligibility requires that items be used predominantly (>50%) in production, improvement, or development processes; DRS evaluates cases individually to determine whether items directly transform materials or control/monitor manufacturing activities. The program targets commercial and industrial manufacturers, with no funding mechanism beyond foregone tax revenue.