Arizona Court Says State Cannot Tax Leased Solar Systems

By Will Stone
Published: Friday, May 19, 2017 - 2:45pm

The state of Arizona cannot make companies that lease rooftop solar panels to homeowners pay property taxes on those.

Many solar customers in Arizona lease their systems, rather than buy them outright, from companies like SunRun and Solar City. Those companies had sued the state department of revenue after it decided to start charging property taxes on the leased systems back in 2013.

A lower court had initially ruled in the companies' favor, but also that the underlying state law that exempted the systems might violate the state Constitution. The court said counties, not the state, could collect the property taxes.

But this week, the Arizona Court of Appeals shot that down, deciding that the lower court was wrong and that the state law was constitutional.

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