USE/OCC TX-SOLAR PANELS

104th Regular Session Introduced by Don DeWitte and 3 co-sponsors

Exempts leases of solar energy systems from Illinois state sales/use taxes, making lessee’s use of leased solar panels tax‑exempt.

Senate Committee Amendment No. 1 Rule 3-9(a) / Re-referred to Assignments

Summary — SB 1633 (as related to solar lease tax exemption)

Note: The document you provided appears to contain text from multiple different SB 1633 bills across states (Arizona charter‑school changes, an Illinois revenue bill, and a Hawaii hemp/green‑building bill). The title you supplied ("USE/OCC TX‑SOLAR PANELS") aligns with the Illinois version. The summary below focuses on the Illinois measure in the packet, which would exempt leases of solar energy systems from certain State taxes. If you intended a different state's SB 1633, tell me which state and I will re‑focus.

Main purpose / intent

To exempt leased solar energy systems from several Illinois state taxes—specifically to treat the lessee’s “use” of a leased solar energy system as tax‑exempt under the Use Tax Act, Service Use Tax Act, Service Occupation Tax Act, and Retailers’ Occupation Tax Act—thereby removing sales/use tax on solar energy system leases and encouraging solar adoption through leasing.

Key provisions

Amends the Use Tax Act (35 ILCS 105/3‑5) to clarify that, beginning January 1, 2025, “use” includes use by a lessee and to add specified exemptions; the bill’s stated change is to exempt leases of solar energy systems from use tax.

Parallel changes are proposed to the Service Use Tax Act, Service Occupation Tax Act, and Retailers’ Occupation Tax Act to ensure leases of solar energy systems are not subject to those taxes (as indicated by the bill synopsis).

A Senate amendment was filed (4/1/2025) and the bill text was substantially revised in committee amendment language (per legislative record).

Who is affected

Lessees of solar energy systems (homeowners, businesses) — would no longer pay state sales/use taxes on lease payments for solar systems.

Solar leasing companies and installers — would see lower tax burdens on lease transactions, potentially reducing administrative burden and pricing for customers.

Illinois Department of Revenue — would implement and administer the new exemption, and adjust guidance/forms.

State budget/treasury — potential reduction in state tax receipts (magnitude depends on market size and lease volumes).

Potential impacts

Lower effective cost of leased solar installations, likely increasing uptake of leased solar systems.

Shift in tax revenue: reduced near‑term state sales/use tax receipts from solar leases; long‑term fiscal impact depends on program uptake and any offsetting economic activity.

Simplification for businesses that offer leases, because multiple tax statutes would be aligned to exempt leased systems.

Procedural / timeline notes

Introduced in the Illinois Senate on 2/4/2025 (Sen. Donald DeWitte sponsor).

Senate Committee Amendment No. 1 filed 4/1/2025 and referred to Assignments/Revenue.

Legislative record shows committee activity and that the Senate passed the bill (third reading) on 5/20/2025; received in the House and referred to Ways & Means on 5/23/2025.

Effective dates in the text point to January 1, 2025 for the “use by lessee” language; final effective date would be set in the enacted version.

If you want, I can:
- Produce a version comparing the before/after tax code language (citations) for each affected Act;
- Estimate potential fiscal impact using available data on Illinois solar leases; or
- Summarize the unrelated Arizona and Hawaii bill texts found in the packet.