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Over the past decade, Missouri has experienced steady growth in utility-scale solar projects[1] and developers have benefited from a property tax exemption under Section 137.100(10) of the state’s tax code. Since the statutory property tax exemption was passed in 2013, solar facilities have leveraged the tax exemption to offset development and operations costs. Until recently, the solar facility tax exemption had flown largely under the radar, as even the largest solar facilities to come online in Missouri have been smaller than 15 megawatts[2]. Over the last few years, however, Missouri counties have started to see the kind of interest from large utility-scale solar developers that states in the south have been experiencing. But in August of 2022, the Missouri Supreme Court bucked the state’s solar-friendly trend in Johnson v. Springfield Solar 1, LLC, 648 S.W.3d 101 (Mo. 2022), unanimously finding the exemption for “solar energy systems not held for resale” under Section 137.100(10) unconstitutional. The case involved a small solar facility that supplied energy to Springfield, Missouri. The Missouri Supreme Court’s decision means that Springfield Solar 1, LLC could owe Greene County, Missouri more than $400,000 in back property taxes, and more generally, that developers who installed solar equipment in Missouri since 2013 will not be able to rely on the property tax exemption as they had anticipated under the tax code.

In the wake of the Springfield Solar 1, LLC decision, Missouri solar developers are searching for new incentives to reduce their property tax burden. Enhanced Enterprise Zones (“EEZs”) and Chapter 100 incentives are the most likely mechanisms to be used by developers to fill the gaps in development and operations costs. This blog post explores the benefits and procurement of Chapter 100 incentives.

Chapter 100 Incentives

Missouri Revised Statutes Chapter 100 authorizes cities, counties, incorporated towns, and incorporated villages (defined by statute as a “municipality”)[3] in Missouri to issue bonds to finance the acquisition, construction, and equipping of various types of solar projects. Typically, the incentive is awarded through a leaseback structure coupled with revenue bonds, the proceeds of which are used to finance the solar project. Unlike general obligation bonds, these types of revenue bonds are not backed by the full faith and credit of the local government. Chapter 100 financing incentives include real and/or personal property tax abatement, a sales tax exemption on construction materials, and a sales tax exemption on tangible personal property. Developers can ask for one of the available incentives, or all the incentives, depending on the needs of the project. If granted, an abatement allows solar companies to enjoy a temporary exemption from taxes on new construction or improvements to existing facilities. The term and percentage of the abatement must be negotiated with the municipality.

Tax Abatement on Real and/or Personal Property

One of the main benefits of Chapter 100 incentives is that, unlike EEZs, Chapter 100 bonds can provide abatement on both real and personal property tax. Chapter 100 tax abatements are particularly appealing to solar developers as they wait on state guidance regarding how solar facility property will be classified for taxation purposes. Currently, the only guidance available from the Missouri Tax Commission is a supplement to the Assessor Manual that provides six hypothetical scenarios and short answers to each. In the most analogous scenario to a large utility-scale project provided in that guidance, the panels and racking would be classified as business personal property because the “panels and aluminum poles are not intended to be permanently affixed to the land and, therefore, are not fixtures.” [4] Conversely, when the Missouri legislature enacted a flat tax rate on wind energy facilities[5], the Missouri Tax Commission took the position that wind energy facilities should be classified as fixtures and taxed as real property.[6] A similar bill that would make solar facilities subject to a flat tax rate has been introduced this year, but so far no legislation has been passed in direct response to the Missouri Supreme Court decision.[7]

Sales Tax Exemption

Chapter 100 also allows solar developers to apply for a sales tax exemption on construction materials and tangible personal property if the municipality allows the company to use its sales tax-exempt status to acquire necessary materials or real property improvements for the project. The municipality tax exempt status applies to state and local sales and uses taxes.

Chapter 100 Incentive Application Process

To obtain a Chapter 100 incentive, a solar developer must first submit an application to the municipality in the location where the investment will be made. The application process and eligibility requirements vary, but typically, the application must include a detailed description of the proposed solar project, including its location, size, and expected economic impact on the surrounding community. Municipalities can set additional parameters to be eligible for Chapter 100 incentives. For instance, the City of Kansas City requires that the proposed project be in a location with a blight finding.

The municipality will then review the application and determine if the solar project meets the criteria for the Chapter 100 incentives. If the project is approved and an abatement is granted, the municipality will issue bonds to finance the project, which are then purchased by the solar developer. In a typical Chapter 100 revenue bond transaction, the solar developer conveys fee simple title of the project site to the municipality, together with all improvements (e.g., solar panels). The municipality then leases the project site, together with all improvements, back to the developer pursuant to a lease agreement. To achieve a tax abatement, the developer will then be responsible for repaying the bonds over the course of the abatement period. These payments are referred to as PILOTs (“payments in lieu of taxes”), and they are equal to the difference between the abatement amount and the taxes otherwise due.

Throughout the abatement period, the company must also comply with certain reporting requirements set by the municipality to ensure that the project is meeting its intended economic impact. This includes providing regular updates on job creation, investment levels, and other relevant metrics to the municipality.

Overall, the process of obtaining a Chapter 100 bond in Missouri requires careful planning and preparation but can provide significant benefits for solar developers looking to invest in new or existing projects in the State.

[1]See SEIA/Wood Mackenzie Power & Renewables, Solar Market Insight©,

[2]See SEIA, Missouri Solar,

[3]§ 100.010(4) RSMo

[4]See State of Missouri State Tax Commission, Assessment of Solar Property,

[5]§ 137.123, RSMo.

[6]See State of Missouri State Tax Commission, Assessment of Wind Energy Facilities,

[7]See Missouri House of Representatives, House Bill No. 1065,

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Photo of Lizzy McEntire Lizzy McEntire

Lizzy assists clients with real property transactions, primarily in renewable energy.

Lizzy’s first experience in law centered on real estate, when she took an undergraduate internship at a Kansas law firm that specialized in farmland transactions. With one side of her family in

Lizzy assists clients with real property transactions, primarily in renewable energy.

Lizzy’s first experience in law centered on real estate, when she took an undergraduate internship at a Kansas law firm that specialized in farmland transactions. With one side of her family in law and the other side in farming, the work was a perfect fit for her background. Lizzy went on to focus on real estate during her law school summers, working on commercial leases, industrial leases, and solar and wind projects.

Today, Lizzy supports real estate transactions for renewable energy projects. With most wind and solar developments located on farmland, she draws on her personal knowledge of farming communities and the agricultural world to assist clients in negotiations. Lizzy loves working in a practice area where the final result is a win for all sides: when a renewable transaction closes, she knows her work has benefitted the client, the farmer landowner and society as a whole.

While Lizzy served as a summer associate at Husch Blackwell before fully joining the firm, she also spent a summer as a legal intern in-house at a multinational conglomerate company. The experience showed her what was most helpful from outside counsel and how best to deliver for clients. Lizzy brings this sense of client focus to her professional practice and aims to look at issues holistically, considering not just the legal matters but also the business implications of her advice. Her goal is to go out of her way to understand a client’s situation and to ensure that they are set up for future success.

Photo of Anna Kimbrell Anna Kimbrell

Anna focuses her practice on energy project development. Since joining the firm, Anna has represented developers, tax equity investors and lenders in the acquisition, funding and financing of wind and utility-scale solar projects across the country.