BOSTON – A bill closing a loophole in the state’s personal property tax law – benefitting commercial solar farms – was passed by the state Senate and now heads to the House, Sen. Mark C.W. Montigny’s office said.
A language change in the personal property tax law ensures that homeowners with solar devices are protected from taxation under the version of the bill passed by the Senate on Monday, according to Audra Riding, an aide to Montigny. However, private solar farms are not protected from taxation unless they enter into a payment in lieu of taxation agreement with the local community.
The measure was filed by Montigny, chairman of the Senate Rules Committee.
Dartmouth officials said they are pleased with the Senate bill, an issue that Riding described as a potential concern to “a dozen or so communities” elsewhere in the state.
Gregory W. Barnes, treasurer and director of budget and finance in Dartmouth, and now serving as the interim co-town administrator, said he and Richard Gonsalves, the town’s director of assessing, worked with Montigny for about 10 months on the issue.
In Dartmouth, the town doesn’t use payments in lieu of taxation agreements and instead taxes these private commercial solar farms under the personal property law, they said. Dartmouth currently has eight commercial solar farms and another one “in the queue,” according to Barnes.
“We hope the House and the governor follow through with something similar” to the Senate version of the bill, Barnes said.
“We’re hopeful that the House will take it up,” Riding said.
A language change was needed by the Legislature after the state Appellate Tax Board ruled in October 2016 that a Swansea property selling 98 percent of the solar power it generated to local commercial institutions was exempt from taxation, Riding said. “That’s not what this exemption was ever meant for,” she said.
In Dartmouth, the ruling potentially jeopardized $600,000 in personal property tax revenue from private solar farms, she said. Over the years, town officials estimate that solar farms have brought in millions in revenue for the town, she said.
However, by this year’s Feb. 1 deadline for filing for abatements, no one had filed one in Dartmouth, according to Barnes.
“If the town lost its revenue, they would have to make it up someplace else,” Riding said.
The language change ensures that solar and wind farms producing up to 125 percent of a property’s annual energy needs are exempt from the personal property tax law, Riding said. “Most homeowners are below 100 percent,” she said.
This protects homeowners from taxation, even allowing them to generate above the energy need, while eliminating any ambiguity that solar farms “whose sole purpose is to generate profit” will be subject to the personal property tax law, she said.
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