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Wind Energy Production Tax
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Wind Energy Production Tax is the tax on the energy produced by means of a wind energy conversion system.
A wind energy conversion system (WECS) is any device that converts wind energy to a usable form of energy.
The Wind Energy Production Tax rate varies, based on the combined nameplate capacity of the WECS being taxed. This table shows the tax rates in megawatt (MW) hour.
| Type of WECS |
Nameplate Capacity |
Tax Per MW Hour |
|---|
| Large Scale |
Over 12 |
$1.20 |
| Medium Scale |
Between 2 and 12 |
$0.36 |
| Small Scale |
2 and under |
$0.12 |
The Wind Energy Production Tax applies to WECS installed after January 2, 1999, unless the system is exempt from the tax. These WECS are exempt from the Energy Production Tax:
- WECS with a nameplate capacity of 0.25 megawatts or less
- WECS owned by a municipality and with a nameplate capacity of 2 MW or less
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The owner of a WECS that converts wind to usable form of energy must file a Wind Energy Production report.
Filing
The owner of a WECS must file the Wind Energy Production report online through our e-Services system. See filing details in the Wind Energy Production Report Instructions.
The owner of a WECS must register for an Energy Production Account before filing. Register by calling Business Registration at 651-282-5225.
Report Deadline
The Wind Energy Production Tax report is due annually on January 15.
An extension of up to 15 days may be granted if the owner submits a written request showing good cause. For more information, visit the extensions request instructions webpage.
If the owner of a WECS does not file on time, we will determine the tax by applying a production rate of 60% to the nameplate capacity of the system.
The department will determine the tax due and notify the owner of the WECS and the counties where the systems are located by February 28.
Counties bill and collect the wind energy production tax. The counties where the systems are located will send the tax bills. The tax must be paid to the appropriate county treasurer by May 15.
The department has an optional Energy Production Tax Statement that counties can use for billing the Solar or Wind Energy Production Taxes.
The amount of tax is paid to the county treasurer at the time and manner provided for payment of property taxes. Taxes are considered personal property taxes.
Revenues from wind energy production taxes are part of the settlement between the county auditor and county treasurer. Revenue is distributed as 80% to the county and 20% to the city/township where the systems are located.
The nameplate capacities of WECS under common ownership will be combined if the system meet both criteria:
- Located within five miles of each other
- Constructed in the same 12 month period
Common ownership exists when the same, or similar, persons or entities own two or more systems, even if the ownership shares are different for each system. Common ownership does not exist solely because the same person or entity provided equity financing.
The original date of an existing wind energy conversion system is not changed if the system is replaced, repaired, or otherwise maintained or altered.
In the case of a disagreement with the department of revenue on the combined nameplate capacity of the system, the department of commerce shall determine the total size of the system.
If approved by the county where the system is located, the land that the WECS is located on is valued in the same manner as similar land that has not been improved with a WECS.
The land is classified as the most probable use if it were not improved with a WECS.
A developer of a new or existing WECS may negotiate with the county where the system is located to establish a payment in lieu of the wind energy production tax.
The in-lieu payment is to provide fees or compensation to the host jurisdiction to maintain public infrastructure and services. A host jurisdiction includes a city or town and the county where the facility is located.
The agreement must be signed by the parties and filed with the commissioner of revenue and the county recorder.
Questions?
If you have questions, email us at sa.property@state.mn.us or call 651-556-6091.
