The Arizona Supreme Court says the state can't levy property taxes on rooftop solar systems leased to homeowners, ruling they are exempt from taxes just like rooftop systems owned by residents.
But Friday's decision doesn't totally clear up a long-simmering issue of whether leased systems can be taxed. That's because the high court said counties might be able to levy their own property taxes on leased solar panels. The nine justices sent that question back to a lower court to decide and a constitutional question.
The battle between the state Department of Revenue and solar leasing companies SunRun and SolarCity began in 2013. That's when the Department of Revenue decided that leased systems were subject to property taxes because they are really solar company-owned power generating facilities.
The companies sued and a Maricopa County judge ruled in their favor, but also decided that the underlying state law allowing home systems to avoid taxes was unconstitutional. An appeals court ruling last year overturned that portion.
