Rose Law Group partner Court Rich leads opponents of legislation
By Phil Riske, managing editor | Rose Law Group Reporter
STATE CAPITOL — A force of residents and businesses testified Monday against a bill that would tax those who finance the acquisition of rooftop solar systems.
The bill (HB 2595 ), sponsored by Rep. John Allen, R-Scottsdale, is tied to a pending interpretation by the Department of Revenue (DOR) that would unwind nearly a decade of steady tax treatment and institute a new tax on tens of thousands of Arizonan’s who finance the acquisition of solar systems, rather than pay cash. It would result in roughly $40 per month of new taxation on an average-sized solar system for the life of the system.
Appearing before the House Ways and Means Committee on behalf of SolarCity, Rose Law Group partner Court Rich cited the bill’s disparity between those who
pay cash for solar equipment and those who lease it. Rich illustrated the inequity of having neighbors with the same solar system subject to dramatically different tax consequences based solely on their method of financing.
“You’re being asked to levy a tax that would destroy the rooftop solar industry,” Rich said, adding any potential solar savings would “be drowned out” by the new tax.
Two witnesses testified 80 percent of rooftop solar is financed, and Mark Holohan of the Arizona Solar Energy Industries Association added the tax also would affect financed solar systems for schools, churches and other nonprofit facilities.
Chris Wahl from SolarCity said solar provides 8,500 jobs in Arizona.
“Let’s keep decapitation of the solar industry at bay,” Wahl said.
Albert Gervenack said 10,000 Sun City West residents have rooftop solar, and most couldn’t purchase it outright. The law and the proposed DOR policy change would result in higher taxes for each of those Sun City residents’ solar systems.
Thomas McPherson questioned how the state could provide the Apple plant in Mesa a 19 percent discount on property taxes, while taxing homeowners who lease rooftop solar.
Rep. Allen said the bill merely codifies DOR’s rulings.
“This will not go away,” Allen said. “This is not anti-solar. It is more about business models that spring from” home solar.
He and the Arizona Prosperity Alliance (APA) were the only ones testifying for the bill.
The members or motives of APA were not identified, but the group’s advocate, lobbyist Mark Osborne, made incorrect allegations about the nature of financed solar, and he mistakenly suggested a leased solar facility “sells energy into the grid,” which is factually inaccurate, Court Rich added after the hearing.
He said there is no difference between how a financed or a cash-purchased solar system interacts with the grid,
The hearing, while originally scheduled for a vote, ended up being for discussion only, and no vote was taken.
Similar bill
A House committee last week advanced a bill that would change formula for taxing utility-scale energy projects.
The bill (HB 2358) would affect a half-dozen large renewable energy companies — those that have received federal cash grants or incentives. DOR says the assessed valuation of those companies should include the amounts of federal contributions, which would increase their property taxes and affect depreciation rates.
Representing a solar and a wind power company, lobbyist Stan Barnes of Copper State Communications told the House Energy, Environment & Natural Resources Committee, “None of these [companies] were figuring on that. Our clients don’t get to depreciate that big value; they only depreciate their investment.”
The committee voted 8-0 to forward the bill.
