The Emerging Industry Sales and Use Tax Credit allows a taxpayer to take a credit, to apply for a refund of taxes paid, or to apply for authority to make tax-exempt purchases of machinery and equipment used to produce electricity in a certified green energy production facility. A certified green energy production facility is a facility certified by the Department of Environment and Conservation as producing electricity for use and consumption off the premises using clean energy technology. Clean energy technology is technology used to generate electricity from geothermal, hydrogen, solar, or wind sources. The credit is equal to 6.5% of the 7% state sales and use tax paid to Tennessee on the sale or use of qualified tangible personal property. To be eligible a facility must invest a minimum of $100 million of capital in the emerging industry project, and create at least 50 new full-time jobs paying 150% of Tennessee’s average occupational wage.
A contractor who is installing pollution control or green energy machinery and equipment must file an application with the department and must attach a copy of the contract to its application. The taxpayer who hires a contractor must also file an application with the department. If both applications are approved, authority to purchase tax exempt will be extended to the contractor for the certified green energy production facility project described in the application. If taxes have been paid, the approved application will be used to support a refund or credit directly to the taxpayer.