BILL NUMBER: S1527A
SPONSOR: PARKER
 
TITLE OF BILL:
An act to amend the tax law, the public service law and the labor law,
in relation to establishing a sales tax exemption for energy storage
 
PURPOSE OR GENERAL IDEA OF BILL:
This legislation would exempt, from state sales and use taxes, retail
sale and installation of energy storage equipment, for both residential
and commercial uses. The legislation would also provide local govern-
ments with the authority to exempt energy storage from local sales and
use taxes.
 
SUMMARY OF PROVISIONS:
Section 1: Amends section 1115 of the tax law by adding subdivisions
(11) and (mm) so that residential energy storage systems equipment and
the service of installing such systems are exempt from state sales and
use taxes.
Sections 2 and 3: Amends section 1210 of the tax law so that local
governments have the option to apply such exemptions locally.
 
JUSTIFICATION:
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.
 
PRIOR LEGISLATIVE HISTORY:
2023/24: S4547 - REPORTED AND COMMITTED TO FINANCE
2021/22: S3277A - REPORTED AND COMMITTED TO FINANCE
2019/20: 58219 - REFERRED TO BUDGET AND REVENUE
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Undetermined.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S1527: 1115 tax law, 1210 tax law
S1527A: 1115 tax law, 1210 tax law, 66-r public service law, 66-r(1-a) public service law, 66-r(3) public service law, 224-d labor law, 224-d(1) labor law, 224-d(8) labor law