Arizona Legislature Exempts the Sale of Renewable Energy Credits from State Sales Tax

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Affirming its commitment to the development of renewable energy resources, the Arizona legislature recently passed legislation exempting the sale and/or use of Renewable Energy Credits (generally referred as "RECs") from Arizona's transaction privilege tax, which operates similar to a sales tax. Given that Arizona's state transaction privilege tax is over seven percent in most counties, and that city tack on an additional 2 to 3 percent tax, the decision to exempt the sale of RECs from a 10 percent tax is a significant development that should encourage the development of renewable energy in Arizona.

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