Legislator D'Amaro Details "Green Energy" Tax Exemptions

In response to rising energy costs and the impact of fossil fuels on the environment, the Suffolk County Legislature recently passed two measures to encourage energy efficient construction. Under the first program, a limited property tax exemption is granted for residential and commercial building improvements meeting stringent “Green Building” standards. The second initiative waives the County’s sales tax for the purchase of solar energy systems.

“Passage of these measures illustrates exactly why Suffolk County is at the forefront of the renewable energy movement,” said Legislator Lou D’Amaro, a supporter of both bills. “Anything we can do on a policy level to protect taxpayers and our environment is definitely a win-win.”

The first bill authorized a minimum of seven years’worth of County property tax exemptions for improvements to properties meeting LEED (Leadership in Energy and Environmental Design) standards. LEED designated buildings are certified Silver, Gold or Platinum depending on the level of energy efficient improvements that are incorporated into the final design. The applicable tax exemptions begin at 100% for the first year and diminish by an annual percentage based upon the level of the LEED improvement being implemented. Under the proposal, Silver designated improvements will receive a 100% property tax exemption for three years and gradually decline before phasing out altogether after seven years. Gold and Platinum designated improvements will receive a 100% property tax exemption for four and six years respectively and phase out after eight and ten years respectively.

The property tax exemptions only apply to improvements to existing buildings where the value of construction exceeds $10,000. They would not apply to the entire structure, unless it is new construction in which case all of the property would qualify for the exemption. The improvements must have commenced on or after January 1, 2013 and be documented by a town issued building permit. The local town assessor has the ultimate authority to determine if the applicant has met the criteria for an exemption and he/she may require other documentation, as deemed appropriate, to make this determination.

“Suffolk wants to ensure that we are doing everything possible to promote new development during these difficult economic times,”said D’Amaro. “This unique financial incentive provides the impetus for new construction while simultaneously fostering environmental sustainability. I encourage individuals and businesses to take advantage of this program and recommend that they retain all pertinent documents and sales receipts so the records may be verified by the appropriate town officials.”

The second bill exempts commercial businesses that purchase and install solar energy systems from paying County sales tax on the purchases. The legislation will take effect on June 1, 2013 and apply to sales made, services rendered and uses occurring on and after that date. The bill mirrors a law previously approved by New York State that also exempts these types of purchases from the State’s portion of sales tax.

The measure received strong support from the burgeoning solar energy industry. A host of representatives from the industry testified that the tax exemption will make solar energy systems more affordable for Suffolk County businesses, which in turn will lower their operating costs and likely afford them the opportunity to hire new employees. The incentive will also create solar installation jobs while enhancing our region’s clean energy supply. The measure also seeks to reverse the trend whereby solar energy businesses are purchasing most of their equipment out of state to avoid making onerous sales tax payments.

“It is a well-known fact that targeted tax incentives are effective in fostering economic growth,” said D’Amaro. “The timing is perfect for Suffolk to offer these exemptions, especially in the wake of Hurricane Sandy, which has unfortunately forced a large number of homeowners and businesses to rebuild. If the County can help to at least partially offset these construction costs, while at the same time fostering renewable energy sources, it is an absolute no-brainer. Suffolk has a long history of pursuing policies that promote energy efficiency and reduce greenhouse gas emissions. These recently adopted measures will only enhance our proven track record as one of the leading municipalities in the fight against global warming.”