Maine Sales Tax Refund Coming for Battery Energy Storage Systems
By: Andrew Wells and Alex Day
The state of Maine offers sales tax exemptions for the purchase of certain personal property manufacturing equipment, which includes equipment that manufactures electricity as a form of tangible personal property. However, the language of the manufacturing sales tax exemption did not clearly extend to battery storage systems. In May 2022, the Maine legislature enacted 36 MRSA §2021, “Refund of Sales and Use Tax on Purchases of Battery Energy Storage Systems.” While this new law is not a sales tax exemption, it does provide a sales or use tax reimbursement to individuals and businesses that purchase batteries to store and later sell electricity.
What Batteries Qualify:
Battery storage systems with a capacity of 50 megawatts or greater, located in a single site in the state. This law only applies to Maine taxes paid on battery purchases and includes parts and accessories “integral to such a battery energy storage system.”
Who This Law Affects:
Individuals and businesses that purchase and pay sales or use tax on battery storage systems, including integral parts and accessories.
How the Reimbursement Works:
This new law does not create a tax exemption for the qualifying batteries. However, it authorizes a sales or use tax refund, paid by the Maine Revenue Services to the battery purchaser. The purchaser must file a claim form to a Maine Revenue Services assessor within the specific time period listed in the “When This Law Applies” section below.
After receiving the claim, the assessor has 30 days to reimburse the sales tax to the purchaser and may audit the claim to determine whether the reimbursement amount is correct.
When This Law Applies:
This reimbursement is applicable for battery storage system equipment purchased within a two-year window, which begins on or after January 1, 2023, and before December 31, 2025. After purchasing a qualified battery energy storage system, the purchaser may submit a reimbursement claim to Maine Revenue Services after July 1, 2023, but the reimbursement must be filed within three years of paying the sales tax.
Where To File a Reimbursement Claim:
Payers of sales tax on batteries must file for reimbursement through the Maine Revenue Services. Maine Revenue Services is currently unclear on which claim form it will require from purchasers, but more guidance will likely be given when the refunds become available.