Solar Gross Receipts Tax Exemption
The 2007 New Mexico legislative session declared 2007 as the Year of Clean Energy. The New Mexico Comprehensive Clean Energy Legislative Package provides the foundation for positioning New Mexico to become a national leader in clean energy. A piece of the foundation includes the enactment of the Solar Gross Receipts Tax Deduction, a tax deduction for businesses from the sale and installation of solar energy systems.
The Solar Gross Receipts Tax (GRT) Deduction (7-9-112 NMSA 1978) became effective July 1, 2007.
Solar GRT Deduction
The Solar GRT Deduction is available for the sale and installation of a solar energy system. A solar energy system is an installation used to provide space heat, hot water, or electricity to the property in which it is installed and is:
(1) an installation that utilizes solar panels that are not also windows, including the solar panels and all equipment necessary for the installation and operation of the panels;
(2) dark colored water tank exposed to sunlight, including all equipment necessary for the installation and operation of the water tank as a part of the overall water system of the property; or
(3) a non-vented Trombe wall, and all equipment necessary for the installation and operation of the Trombe wall.
Solar Energy System Components and Materials Guidance Document
The Solar Energy System Components and Materials (SESCM) list, developed by the New Mexico Energy, Minerals and Natural Resources Department (EMNRD), provides guidance for vendors, contractors, citizens of New Mexico, and other entities interested in taking advantage of the deduction from GRT for the sale and installation of a solar energy system.
The SESCM list provides guidance in determining the components and materials included in a solar energy system, eligible for the GRT deduction. The list is not comprehensive or static, but is a "living" list of components and materials. Vendors, contractors, citizens of New Mexico, and other entities will have the opportunity to provide feedback and recommendations.
SESCM Qualifying Components and Materials
Equipment necessary for the sale and installation of a solar energy system includes an essential machine, mechanism, or tool, or a component or fitting used directly and exclusively in the solar energy system, and includes replacement of some part of the system, or similar change to the system that would qualify as an adjustment for federal income tax purposes as established under the applicable provisions of the Internal Revenue Code of 1986. Additionally, equipment is limited to components and systems related to storage and collection of solar energy. A solar energy system does not include components or systems related to the uses of the energy.
For information concerning the technical aspects or the Solar Energy System Components and Materials guidance document of the Solar GRT, please contact Mark Gaiser (505) 476-3318.
Solar Energy Systems Tax Deduction Purchase and Use Statement
In order to receive the Solar GRT deduction, the seller must have a signed copy of Form RPD-41341, Solar Energy Systems Gross Receipts Tax Deduction Purchase and Use Statement, or other evidence acceptable to TRD that the service or equipment is purchased for the sole use of the sale and installation of a qualified energy system before the seller may deduct gross receipts from the sale. The Solar Energy Systems Gross Receipts Tax Deduction Purchase and Use Statement can be found on the New Mexico Taxation and Revenue Department's website under CRS tax forms.
For administrative related aspects or the Solar Energy Systems Tax Deduction Purchase and Use Statement, please call (505) 827-0792 in Santa Fe or toll free at (866) 809-2335, select option 2, or email CRS.TaxReturnHelp@state.nm.us. For federal tax-related aspects, contact the Internal Revenue Service.