New Washington State Personal Property Tax Exemption for Certain Renewable Energy Generation and Storage Facilities

Legal Alert

Beginning with taxes levied for collection in 2025, a newly enacted Washington property tax statute provides an exemption from the state-imposed portion of personal property tax for qualified personal property used for the generation or storage of renewable energy. The exemption is available for either a 10-year or 15-year term following the date on which the facility first becomes operational.

The term “qualified personal property” means personal property that is used exclusively for the generation or storage of renewable energy in a facility, the construction of which began on or after July 1, 2023. The term “renewable energy” means energy produced by a solar or wind facility with nameplate capacity sufficient to generate at least 10 megawatts of nameplate capacity of alternating current power.

Renewable energy facilities that are granted the personal property tax exemption must pay a new “production excise tax” based on the generation or storage capacity of the facility. The amount of the production excise tax depends in part on whether the facility qualifies for a 10-year exemption or 15-year exemption from State property tax. The per month per MW nameplate capacity excise tax is:

Activity 10-Year Exemption 15-Year Exemption
Solar Energy Generation $80 $75
Wind Energy Generation $150 $130
Storage (solar or wind) $19 $14

Applications for the property tax exemption must be filed with the Washington Department of Revenue (Department) by March 31 of the year before the year in which in the personal property tax exemption would take effect. Thus, to claim an exemption for personal property taxes due in calendar year 2025, the application must be submitted by March 31, 2024.

The application must indicate whether a 10-or 15-year exemption is being requested and must include an attestation that the eligible taxpayer has registered with the Department to pay the production excise tax. After the initial application, an annual attestation by the eligible taxpayer is required to continue the personal property tax exemption.

An applicant who is granted the exemption from personal property tax must report and pay the production excise taxes for the duration of the exemption on a monthly basis. The excise tax rates may change by legislation during the exemption period based on the Department’s review of rate structures to help ensure they reflect changes in technology, capacity, market incentives, and inflation.

As the personal property exemption only applies to property taxes levied for any state purpose, qualified personal property is not exempt from any local taxing district property taxes, and taxpayers must continue to file any annual personal property listing with the county assessor as required. Additionally, real property remains fully taxable.

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