200002081L



February 29, 2000


**************
<**************>


Dear **************:

You have obtained a sales tax permit and will be selling solar panels and wind 
turbines that will be installed on farms and ranches.  In our telephone 
conversation of February 29, 2000, you stated that you would initially 
wholesale the panels and turbines to third-party vendors who will resell and 
install the items.  The panels and turbines will be incorporated into the 
realty in such a way as to become a permanent improvement to the realty.  You 
said that at some future point you may perform some installation yourself, but 
only as an employee of one of the retailers to whom you sell the panels.

The panels and turbines are subject to sales tax when sold to the retailers.  
You should either collect sales tax or accept a resale certificate in lieu of 
tax from these individuals.  Individuals purchasing solar panels and wind 
turbines that will be installed as part of a lump-sum contract (see Tax Code  
151.056 attached) owe tax at the time of purchase.  

Individuals that buy the panels and turbines to resell them to farmers and 
ranchers or install them under separated contracts must collect the tax from 
those individuals at the time of sale.  A solar panel or wind turbine purchased 
to provide power to a house, barn, or general-purpose building would not 
qualify for the agricultural exemption. The purchase of a solar panel or wind 
turbine purchased to provide power exclusively to an electric fence, gate or 
special purpose building (as defined in Rule 3.296 (g)(9)(C)) on a farm or 
ranch would qualify for the agricultural exemption.

You will also be engaged in various agricultural activities selling organic 
hay, produce and beef.  Sales of these items are exempt from sales tax.  

As we discussed, purchases of land or wind rights are not subject to sales tax. 
 I would need more information regarding developing sites for large-scale wind 
energy production before giving an opinion on the taxability.  

Because the solar panels and wind turbines become improvements to realty when 
attached, you will be treated as a contractor when installing these devices at 
a residence.  The device itself will be subject to sales tax while the labor to 
install it at the residence will be exempt. Tax Code  151.056 gives information 
on who is responsible for the tax in various situations.  Please feel free to 
contact me directly with questions as they arise.

I am enclosing Rule 3.281 on records, Rule 3.286 on seller's responsibilities, 
and Rule 3.296 on agriculture for your reference. 

I hope this information is helpful.  This opinion is rendered based on the 
information you provided.  Other facts, though similar, may yield different 
results.

You may call me toll-free at 1-800-531-5441, ext. 3-4680.  The direct line is 
(512) 463-4680.  You may also write to Tax Policy, Comptroller of Public 
Accounts.  The e-mail address is tax.help@cpa.state.tx.us.

Sincerely,


Al Van Allen
Tax Policy Division

cc:  **************




ACCESSION NUMBER: 200002081L  
SUPERSEDED: N 
DOCUMENT TYPE: L
DATE: 02/29/2000  
TAX TYPE: SALES