Like many states, Florida has enacted a renewable energy device exemption legislation that is intended to incentivize construction of residential, building and utility size solar and wind farms. After all, it is the Sunshine State! Incentives include an eighty percent exemption from property taxation, but can the developer rely upon that exemption for the full term of the statute (presently, 2037)? Not necessarily.[i]

Tangible Personal Property Tax

Under Florida law, all property is taxable; unless, it is specifically exempted.[ii] Whether a property is subject to tax valuation, tax levy, or exemption, each year’s assessment constitutes an annual determination, and thereby, “independent” of the prior year.[iii] Thus, Florida, like most states, generally, requires a taxpayer to annually file an exemption or exemption renewal application.[iv] For any exemption application, the burden of showing that the property is exempt lies with the taxpayer.[v]

Florida taxes both real and tangible business personal property. Tangible personal property includes anything other than real estate that is used in a business or rental property. Every new business owning tangible personal property on January 1 must file an initial tax return.[vi] Property owners, who lease, lend, or rent property must also file. Thereafter, annually by April 1, owners of tangible personal property having value in excess of $25,000 are required to file Form DR-405, Tangible Property Tax Return (“Form DR-405”) in the county where the property is located. The owner of tangible personal property must file a separate return for each site in the county where he or she transacts business.[vii]

The taxable value of tangible personal property tax is the just value (fair market value) of the property adjusted for exclusions, differentials, or exemptions allowed by the Constitution and Florida Statutes. The Constitution strictly limits the Legislature’s authority to provide exemptions or adjustments to fair market value.[viii] The tax rate for tangible personal property is the same millage rate levied by counties, cities, school districts, and special districts on real property.

By the 2017 Florida Senate Bill No. 90, tangible personal property that constituted renewable energy source devices were given an eighty (80%) percent exemption from ad valorem taxation.[ix]

Exemption Application 

  1. Generally

To obtain an exemption, the application process commences upon the filing of an application with the appropriate county on the form prescribed by the Florida Department of Revenue.[x] Following the receipt of the exemption application (or renewal application), the county appraiser determines if the property is or remains exempt.[xi][xii] As part of this review, the county appraiser may seek additional information from the taxpayer. Thus, and provided it is filed prior to March 1, the filing of an exemption application merely commences the administrative review process. Only upon the granting of the exemption and the assessment rolls being made final (July 1) are the exemption rights “vested”.[xiii]

  1. Renewable Energy Source Devices Application

Being a State defined partial exemption, the application for an exemption must be made on the form prescribed by the Florida Department of Revenue. For renewable energy source devices, in 2016, the DOR repealed Form DR-455, which had served as the renewable energy device exemption application.[xiv] In its proposed rules and forms arising from the 2017 legislation, the DOR had not proposed an exemption application form specific to the renewable energy source devices. Instead, it amended Form DR-405 to include a new line “24” to report costs specific for the renewable energy source devices.[xv] As the purpose of Form DR-405 is to obtain cost information for the County Appraiser to compute a personal property value, it is not, per se, an exemption application. As such, its filing date is April 1, as opposed to March 1 (for exemption applications). However, to the extent that Form DR-405 must be filed as the application for exemption, its filing must be on or before March 1 of every year that an exemption is sought.[xvi] A taxpayer might also consider filing the general exemption application form (DR-504), with the DR-405 (again, on or before March 1).

At the time the taxpayer files the exemption application, the renewable energy source devices must exist and have been “installed” on or before January 1 of the year that the exemption application is being filed.[xvii] Upon receipt of the application, the County Appraiser determines whether the installed tangible personal property is exempt pursuant to FS §196.182. This statute requires the property to be a “renewable energy source device” as defined in FS §193.624, which include solar devices, provided such devices are installed on or after January 1, 2018. To be exempt in any given year, and using 2018 as an example, the renewable energy source devices would have had to been both existing and installed on or before January 1, 2018.[xviii] The Florida Supreme Court has held that “the actual use of the property as of the assessment date, rather than its intended future use, … controls the determination of whether the property qualifies for an exemption from ad valorem taxes.”[xix] In Cedars, the Supreme Court stated, ‘[I]t is immaterial that the corporation intended to use the property for an exempt purpose subsequent to January 1; the controlling factor was that, as of the assessment date, it was not actually in use for such purpose.’[xx]

For determining the meaning of “installed”, “[o]ne of the most fundamental tenets of statutory construction requires that we give statutory language its plain and ordinary meaning, unless the words are defined in the statute or by the clear intent of the Legislature. If necessary, the plain and ordinary meaning of the word can be ascertained by reference to a dictionary.”[xxi] After consulting various dictionaries, a multitude of courts have defined “install” as follows:

           Install: to place or fix (equipment or machinery) in position ready for use.

See e.g., Meriam Webster Dictionary; or Oxford English Dictionary. If the exemption application is granted for the renewable energy source devices, the eighty percent partial exemption is applied to the derived just value for the year that the application or renewal is filed.

Term of Exemption – Revocable

It is axiomatic that statutes defining an exemption can be amended or repealed by subsequent legislative actions.[xxii] Any future legislation that amends or repeals the renewable energy source device exemption prior to July 1 of a given year may not constitute a violation of a taxpayer’s due process rights.[xxiii] However, such legislation should not be able to reach back into prior years where the final assessment rolls had been finalized and the exemption’s application already enjoyed by the taxpayer. The United States Supreme Court has repeatedly concluded that the retroactive application of tax laws is permissible when the period of retroactivity is limited.[xxiv]

Although Florida has presently committed to an 80% exemption for renewable energy source devices until 2037, the Florida Legislature may enact future legislation that either amends or repeals such exemption. That is, just as the Legislature may enact statutes authorizing the grant of tax exemptions, “it lies within the legislature’s prerogative to repeal tax exemptions and impose taxes on lands previously exempt.”[xxv]

About the Author: 

Mark Lansing focuses his practice on property tax & condemnation matters with respect to energy, industrial and commercial properties. He achieves significant property tax savings and assessment reductions for his clients through litigation, negotiations (settlements), due diligence reviews and alternative agreements (e.g., PILOTs). Mark assists clients with their valuation of complex property, and through real property tax management. Mr. Lansing also works with energy, industrial and commercial companies in buying, building and operating facilities to effectively manage their property taxes, including due diligence review in the purchase or development phase, and representation before administrative agencies. As an experienced trial lawyer, Mark has successfully represented clients in settlement negotiations, motions, trials and appeals at all levels of state and Federal Courts (including, Circuit Courts of Appeal). Mark is also well published in property tax and condemnation valuation matters. Mark may be reached in our Washington, D.C. office at 202.466.5964, or via email at and you may visit his bio here.


[i] Unlike twenty-nine other states, Florida has not adopted a Renewable Portfolio Standard (“RPS”). An RPS is a regulation that requires the increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal by a certain date. In addition, Florida lacks an RPS Renewable Carve Out.

[ii] FS §196.001.

[iii] Id.

[iv] FS §196.011 and 196.193.

[v] Sowell v. Panama Commons, L.P., 192 So.3d 27 (2016).

[vi] FS §193.062.

[vii] FS §196.183(1).

[viii] FL. CONST. art. VII, s. 4.

[ix] FS §196.182. It should be noted that purchasers of solar energy systems used in place of conventional energy systems have been exempt from paying Florida’s sales and use tax since July 1, 1997. The term “solar energy system” includes the equipment and requisite hardware that provide and are used for collecting, transferring, converting, storing or using incidental solar energy for water heating, space heating and cooling, or other applications that would otherwise require the use of a conventional source of energy such as petroleum products, natural gas, manufactured gas or electricity. The exemption covers all components used in the system. Sellers of solar energy systems are required to document sales to get the exemption.

[x] FS §196.011 and 196.193.

[xi] FS §196.011 and 196.193.

[xii] Although some properties do not require an annual renewal application, Renewable Energy Source Devices have not been specifically identified as being one of those types of properties or exemption. Id. Thus, an annual renewal application should be made.

[xiii] Prior to being finalized, the assessment rolls are technically subject to change, either by the County Appraiser or the Value Adjustment Board. FS §194.011(3) (d). Sowell v. Panama Commons, L.P., 192 So.3d 27 (2016).

[xiv] 2016 FL REG Text 427019 (NS).

[xv] Proposed Changes to Rule 12D-16.002 (Vol. 43, No. 203, pp. 4566-4568).

[xvi] FS §196.011.

[xvii] FS §196.011.

[xviii] FS §196.011(1) (a), §196.182 and §193.624.

[xix] Dade County Taxing Auths. v. Cedars of Lebanon Hosp. Corp., 355 So.2d 1202, 1204 (Fla.1978); Metropolitan Dade County v. Miami-Dade County Community College Foundation, Inc., 545 So.2d 324 (Fla. 3d DCA 1989) (reversed tax exemption granted to property that was being remodeled for an exempt use).

[xx] Cedars, supra, 355 So.2d at 1204.

[xxi] Green v. State, 604 So. 2d 471, 473 (Fla. 1992); Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984).

[xxii] Sowell v. Panama Commons, L.P., 192 So.3d 27 (2016).

[xxiii] Sowell, supra.

[xxiv] United States v. Carlton, 512 U.S. 26, 30–32.

[xxv] Straughn v. Camp, 293 So.2d 689, 695 (Fla.1974); see also Daytona Beach Racing & Recreational Facilities Dist. v. Volusia Cnty., 372 So.2d 419, 420 (Fla.1979) (“[A] subsequent legislature has the unquestioned authority to repeal prior tax exemption statutes.”).