Business owners of community solar gardens are subject to personal property tax on the personal property used to generate electricity. Property tax assessors value the taxable personal property by using the cost approach. This entails determining the alternating current electricity generating capacity of the personal property and multiplying that by the cost per kilowatt of alternating current electricity as published by the division of property taxation.
The bill specifies that the percentage of electricity generated by a community solar garden that is attributed to residential or governmental subscribers is exempt from the levy and collection of property tax so that a business owner of a community solar garden is levied a property tax on the electricity generating capacity used by businesses.