Tax Exemption Upheld for Solar Energy Farm Owner

Rosenblum attorneys Jeff Hunt and Jessica Gittemeier obtained a major taxation victory for MCP-Rolla, LLC, owner of a solar energy farm in Rolla, Missouri.  In a case of first impression, the State Tax Commission upheld Missouri’s tax exemption for solar energy systems not held for resale.  Missouri Statute Section 137.100(10).  The Phelps County Assessor had assessed property taxes on the solar energy system claiming that the system was “held for resale” because MCP-Rolla “purchased” the system from the contractor who built the system and because sometime in the distant future, the Missouri Joint Municipal Electric Utility Commission may exercise an option to purchase the solar farm.  The Tax Commission rejected the Assessor’s arguments and held that the plain language of the statute requires enforcement of the exemption.

This is an important decision for the growing solar energy industry in Missouri.  Missouri has expressed a strong public policy of promoting alternative energy sources, such as solar energy.  Unfortunately, the start-up and operational costs of solar energy farms are enormous and it takes many years for an operator to recoup the initial investment in infrastructure.  The taxation of solar energy farms would drive up the cost of solar energy and would discourage the establishment of solar energy farms to produce clean, renewable energy for the citizens of Missouri.