Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017
 

Property Tax Annotations


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610.0000 NEWLY CONSTRUCTED PROPERTY

Annotation 610.0092

610.0092 Solar Energy System Exclusion. Company constructs and sells completed solar energy systems to customers through the sale of its interests in a special purpose entity, typically a limited liability company (LLC), which owns the solar energy system upon completion of construction. Before the sale to the purchaser, the LLC is owned 100 percent by the company. At some point after the completion of construction, the company transfers 100 percent of the ownership interests in the LLC to the purchaser. This causes a reassessment of all property owned by the LLC pursuant to Revenue and Taxation Code section 64(c)(1). However, the Legislature has declared that purchasers of a solar energy system may still receive the new construction exclusion even if the solar energy systems are transferred in "sale-leaseback arrangements, partnership flip structures, or other transactions to purchasers," as long as the active solar energy system is newly constructed or added and another taxpayer has not received an exclusion for the same active solar energy system. Therefore, where 100 percent of the interests in an LLC owning a newly constructed solar energy system are transferred to a purchaser, the solar energy system may be excluded from reassessment as long as no other taxpayer has received an exclusion for the same active solar energy system. C 2/20/2014.