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State sales tax being wrongly collected by equipment vendors, check your states laws!.

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Firstrapid

New Member
Joined
Jan 26, 2023
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67
Location
Del Norte Colorado
Colorado has exempted sales tax on solar equipment for residential installation.
Some states have similar allowances.
Many vendors, signature solar for one, do not honor that exemption and collect the tax. I don't know if that money goes anywhere except to in vendors pocket.
Comments please!
 
Firstrapid said:
Colorado has exempted sales tax on solar equipment for residential installation.
Some states have similar allowances.
Many vendors, signature solar for one, do not honor that exemption and collect the tax. I don't know if that money goes anywhere except to in vendors pocket.
Comments please!
Click to expand...
If that’s true and they are not remitting it to the state then they could be in big trouble.
 
State should have a form to fill out to report sales tax paid which ends up being exempt so you can get a refund.

Tax laws are COMPLICATED. Here in Vermont at work, paint to paint machinery is exempt from sales tax while paint to paint the building is taxable….. (at least when the secretary explained it to me years back)

?‍♂️
 
I own a small business. Sales tax is a nightmare. It is almost impossible to be 100% correct on every sale if you are selling to all 50 states. State tax, county tax, town tax are constantly changing.

The good news, you should be able to file paperwork with your state for a refund on over-payment of sales tax. I would do it right away because there is likely a deadline. I know this is possible in my state.

There is 1 large company that I purchase from occasionally. They have an unusual method for sales tax collection. They charge every possible sales tax they can possibly find, so you are likely to over pay. Then it is up to the purchaser to file for a refund for the overpaid amount. They tell you what they are doing and tell you how to get the money back. They do it to avoid undercharging and paying penalties. It is weird but it works for them. Their annual sales volume is $1.5 to $2.0 Billion US dollars.
 
kayakingphotos said:
State should have a form to fill out to report sales tax paid which ends up being exempt so you can get a refund.

Tax laws are COMPLICATED. Here in Vermont at work, paint to paint machinery is exempt from sales tax while paint to paint the building is taxable….. (at least when the secretary explained it to me years back)

?‍♂️
Click to expand...
Get it is writing!
 
kayakingphotos said:
Tax laws are COMPLICATED. Here in Vermont at work, paint to paint machinery is exempt from sales tax while paint to paint the building is taxable….. (at least when the secretary explained it to me years back)
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Sure are but you definitely do not want to be collecting sales tax without remitting it to the state collected.

They really don’t look kindly on that.

For a company of that size I would think they would have a National processor who would know what states collect tax and don’t.
 
Tax was charged on the gear I purchased at SS and allot of allot of other vendors as well. When I asked my states tax authority, they said it depends on which sales tax they collected. Whether it was taxed at their states tax rate (the companies) or at your state tax rate, where you live. Most all sales online now, are subject to online sales tax based on YOUR states rate. (a recent law passed by congress, go figure...) I suspect solar vendors just lumped this new law into their accounting practices and don't follow other states tax exempt laws for solar equipment.

When I questioned SS on this, I called a few other suppliers as well and had them create an invoice with my state for billing and some were state tax free (my state tax and theirs) and some charged. SS just gave me the run around on this and said you collect a credit at the end of the year, ya, ok.

When I questioned my state tax authority, they stated ALL sales of solar equipment are sales tax exempt, whether you install it yourself or have it installed, labor too. I assume tools as well.

Since all companies selling online, are now required to collect state tax on your purchases for the state in which you live, they must remit that tax they collected/charged, no matter what company, in what state collected it, to the state in which you live.

The tax authority here sent me a form to fill out to be reimbursed for any state tax I paid for the state I live in. I haven't gotten to it yet but suspect I should fill it out with all the receipts showing tax paid and submit it before the end of the year. It's on the list.

ETA: Even if they collected tax based on their states tax rate, he said I would have to be reimbursed by their state.
 
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It is a massive problem and even huge corporations like Home Depot cannot get it right all the time. When I was ordering doors and windows for my new home build there was tax on some of them and not others for reasons that no one could explain. They did end up managing to zero all the tax out for me.. it's a nightmare.
Guess who gets into trouble if you don't get taxation right, yep the little guy.
 
Firstrapid said:
Colorado has exempted sales tax on solar equipment for residential installation.
Some states have similar allowances.
Many vendors, signature solar for one, do not honor that exemption and collect the tax. I don't know if that money goes anywhere except to in vendors pocket.
Comments please!
Click to expand...
It is State Law in Colorado that sales tax will not be collected on residential items. Companies that do business in CO must have a CO sales tax license so they are not allowed to charge the tax in the first place by law. NAZ does not charge sales tax on shipments to CO, they are located in AZ. Same with Sunpower. The point is not to have the customer come up with $$$ and then go through the bs to get it back. I had a $20K cart full with Signature and cancelled it because they wouldn't remove the tax, went someplace else. I even sent them a copy of the C.R.S. (Colorado Revised Statue).
 
Firstrapid said:
It is State Law in Colorado that sales tax will not be collected on residential items. Companies that do business in CO must have a CO sales tax license so they are not allowed to charge the tax in the first place by law. NAZ does not charge sales tax on shipments to CO, they are located in AZ. Same with Sunpower. The point is not to have the customer come up with $$$ and then go through the bs to get it back. I had a $20K cart full with Signature and cancelled it because they wouldn't remove the tax, went someplace else. I even sent them a copy of the C.R.S. (Colorado Revised Statue).
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When I ordered last month, the precalculated sales tax was removed when I selected my state upon payment, which also doesn't have any sort of sales tax.
 
My experience with Signature solar over multiple purchases once I apply my Florida address Sales tax come off the total.
 
@Firstrapid

all tax collected goes to the states, we have been very responsive to missed exemptions and have freed several states up already. these states o not write straight-forward laws, for instance, Washington state says it is exempt as long as the system is under 10kw... what the actual heck??? Basically we have to get a defense strategy in place so that when we get audited by the state we are not forced to pay huge fines for not collecting taxes.


this says we still have to collect city and county sales tax, for instance, Batteries are also not mentioned by name.

tax law is changing all the time as well, we definitely need to make sure that solar inverters and panels are exempt here, if the state can clarify that batteries are included we would love to release that as well.
 
SignatureSolarJames said:
@Firstrapid

all tax collected goes to the states, we have been very responsive to missed exemptions and have freed several states up already. these states o not write straight-forward laws, for instance, Washington state says it is exempt as long as the system is under 10kw... what the actual heck??? Basically we have to get a defense strategy in place so that when we get audited by the state we are not forced to pay huge fines for not collecting taxes.


this says we still have to collect city and county sales tax, for instance, Batteries are also not mentioned by name.

tax law is changing all the time as well, we definitely need to make sure that solar inverters and panels are exempt here, if the state can clarify that batteries are included we would love to release that as well.
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This should cover batteries. Colo. Rev. Stat. § 39-26-733 Section 39-26-733 - Residential energy storage systems - tax preference performance statement - legislative declaration - definition - repeal (a) In accordance with section 39-21-304(1), which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that the purposes of the tax expenditure created in subsection (3) of this section are to: (I) Induce certain designated behavior by taxpayers, specifically the purchase and installation of residential energy storage systems; and (II) Contribute to the state's effort to achieve its climate goals. (b) The general assembly and the state auditor shall measure the effectiveness of the tax exemption in achieving the purposes specified in subsection (1)(a) of this section based on the number of residential energy storage systems sold and used in the state. The Colorado energy office shall provide the state auditor with any available information that would assist the state auditor's measurement. (2) As used in this section, unless the context otherwise requires, "energy storage system" means any commercially available, customer-sited system, including batteries and the batteries paired with on-site generation, that is capable of retaining, storing, and delivering energy by chemical, thermal, mechanical, or other means. (3) On and after January 1, 2023, all sales, storage, and use of energy storage systems that are used in a residential dwelling are exempt from taxation under parts 1 and 2 of this article 26. (4) This section is repealed, effective January 1, 2033. C.R.S. § 39-26-733
 
Remitting sales tax for just a single state is awful. I can only imagine the horror of trying to do it for all 50 states. All businesses having to deal with it have my condolences.
 
Firstrapid said:
This should cover batteries. Colo. Rev. Stat. § 39-26-733 Section 39-26-733 - Residential energy storage systems - tax preference performance statement - legislative declaration - definition - repeal (a) In accordance with section 39-21-304(1), which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that the purposes of the tax expenditure created in subsection (3) of this section are to: (I) Induce certain designated behavior by taxpayers, specifically the purchase and installation of residential energy storage systems; and (II) Contribute to the state's effort to achieve its climate goals. (b) The general assembly and the state auditor shall measure the effectiveness of the tax exemption in achieving the purposes specified in subsection (1)(a) of this section based on the number of residential energy storage systems sold and used in the state. The Colorado energy office shall provide the state auditor with any available information that would assist the state auditor's measurement. (2) As used in this section, unless the context otherwise requires, "energy storage system" means any commercially available, customer-sited system, including batteries and the batteries paired with on-site generation, that is capable of retaining, storing, and delivering energy by chemical, thermal, mechanical, or other means. (3) On and after January 1, 2023, all sales, storage, and use of energy storage systems that are used in a residential dwelling are exempt from taxation under parts 1 and 2 of this article 26. (4) This section is repealed, effective January 1, 2033. C.R.S. § 39-26-733
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Good find! this is a perfect example of how much specific research has to go into each state. we will get on this monday and confirm our team can defend it given all these facts and whatever else they find.

could you please change the Title of this thread to "Do you think you should not have to pay solar sales tax in your state?"

I get you started in a personal context, but the more people drive information gathering and other points of view the faster we are likely to help out.
 

Colo. Rev. Stat. § 39-26-733​

Section 39-26-733 - Residential energy storage systems - tax preference performance statement - legislative declaration - definition - repeal
  • (a)
    In accordance with section 39-21-304(1), which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that the purposes of the tax expenditure created in subsection (3) of this section are to:
    • (I)
      Induce certain designated behavior by taxpayers, specifically the purchase and installation of residential energy storage systems; and
    • (II)
      Contribute to the state's effort to achieve its climate goals.
  • (b)
    The general assembly and the state auditor shall measure the effectiveness of the tax exemption in achieving the purposes specified in subsection (1)(a) of this section based on the number of residential energy storage systems sold and used in the state. The Colorado energy office shall provide the state auditor with any available information that would assist the state auditor's measurement.
    • (2)
      As used in this section, unless the context otherwise requires, "energy storage system" means any commercially available, customer-sited system, including batteries and the batteries paired with on-site generation, that is capable of retaining, storing, and delivering energy by chemical, thermal, mechanical, or other means.
    • (3)
      On and after January 1, 2023, all sales, storage, and use of energy storage systems that are used in a residential dwelling are exempt from taxation under parts 1 and 2 of this article 26.
    • (4)
      This section is repealed, effective January 1, 2033.
      • C.R.S.
        § 39-26-733
 
SignatureSolarJames said:
Good find! this is a perfect example of how much specific research has to go into each state. we will get on this monday and confirm our team can defend it given all these facts and whatever else they find.

could you please change the Title of this thread to "Do you think you should not have to pay solar sales tax in your state?"

I get you started in a personal context, but the more people drive information gathering and other points of view the faster we are likely to help out.
Click to expand...
Too bad you lostmy order to your competition. I gave SS this info months ago and it was ignored!
Cheers
 
Firstrapid said:
Colorado has exempted sales tax on solar equipment for residential installation.
Some states have similar allowances.
Many vendors, signature solar for one, do not honor that exemption and collect the tax. I don't know if that money goes anywhere except to in vendors pocket.
Comments please!
Click to expand...

Take your receipt to your secretary of state / treasure and ask for a refund, if they refuse during filing for local taxes put it in your deduction and include a copy of the receipt.
 
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Onehand said:
Since all companies selling online, are now required to collect state tax on your purchases for the state in which you live
Click to expand...

Only if you have sufficient sales in that state, if you do less than 100K of sales then you aren't required, its called economic nexus:

www.salestaxinstitute.com

Economic Nexus State Chart - State by State Economic Nexus Rules | Sales Tax Institute

Key information such as effective dates, thresholds, and includable sales for out-of-state sellers making sales into states that have enacted economic nexus legislation both before and after the South Dakota v. Wayfair Supreme Court decision.
www.salestaxinstitute.com www.salestaxinstitute.com

basically its one of the few times a small seller has advantage over a larger one, as you can get automatic 5-11% off.
 
Before I send the tax refund form in, along with all the receipts they want, I have a question into my states tax authority asking if the small parts in the system like breakers, electrical components, hardware, etc are all also exempt. Should be as I see it, as it's all part of the completed system. Also asked of tools purchased and required for installation are exempt. What the hell, might as well go for it all. Save all your receipts if you plan to go back after your taxing authority and make copies for yourself, you will not get them back.
 
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State sales tax? What’s that?

Is that something like a state income tax I hear about? So you get taxed when you make money, then you get taxed again when you spend it?

Crazy!
 
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