Wind Turbine Facilities Municipal Taxation Act: overview
Overview of the Wind Turbine Facilities Municipal Taxation Act.
The Wind Turbine Facilities Municipal Taxation Act governs how wind turbines used to produce electricity are taxed.
What a wind turbine facility includes
A wind turbine facility includes the wind turbine, the generator and all electrical equipment, including the substation, the tower and all foundations (except building foundations).
Regular tax and facility tax
Taxation of the whole wind farm is based partly on regular taxes and partly on a special facility tax. Land and buildings are taxed in the regular way (assessment times rate). Wind turbine facilities are exempt from regular taxation, but subject to a special tax on the amount of energy generated.
Who is responsible for the taxes
The owner of the wind turbine facility, not the owner of the land, needs to pay the facility tax. This is because many facilities are built on leased land. The landowner is responsible for the taxes on land and buildings.
When taxation begins
Taxation of a wind turbine facility begins 6 months after the facility has been connected to the grid or to a power consumer, and has been in continuous operation for at least a day.
Tax when generator is dismantled
When a wind turbine generator is dismantled, taxes are pro-rated for the part of the year before dismantling. No change in tax liability results from reducing the capacity of the wind turbine generator.