A. Sales of Qualifying Electrical Appliances. The sales and use tax does not apply to the sale of the following electrical appliances that meet or exceed applicable Energy Star efficiency requirements developed by the United States Environmental Protection Agency and the United States Department of Energy:
(1) Clothes washers purchased on or after July 1, 2000, but before July 1, 2003;
(2) Room air conditioners purchased on or after January 1, 2001, but before July 1, 2004; and
(3) Standard size refrigerators purchased on or after July 1, 2001, but before July 1, 2004.
B. Sales of Qualifying Fuel Cells, Heat Pumps, Air Conditioners and Water Heaters. The sales and use tax does not apply to the following sales:
(1) A fuel cell sold on or before July 1, 2004 that:
(a) Generates electricity and heat using an electrochemical process;
(b) Has an electricity-only generation efficiency greater than 35 percent; and
(c) Has a generating capacity of at least 2 kilowatts;
(2) A heat pump that is:
(a) A natural gas heat pump sold on or before July 1, 2004, that has a coefficient of performing of at least 1.25 for heating and at least 0.70 for cooling; or
(b) An electric heat pump sold on or before July 1, 2004, that has a heating system performance factor of at least 7.5 and a cooling seasonal energy efficiency rating of at least 13.5;
(3) A central air conditioner sold on or before July 1, 2004, that has a cooling seasonal energy efficiency ratio of at least 13.5; and
(4) A water heater that is an:
(a) Advanced natural gas water heater sold on or before July 1, 2004 that has an energy factor of at least 0.65; or
(b) Electric heat pump hot water heater sold on or before July 1, 2004 that yields an energy factor of at least 1.7.
C. The sales and use tax does not apply to a sale of a multifuel pellet stove designed to burn agricultural field corn. The fact that agricultural field corn can be burned in a stove not specifically designed for the burning of agricultural field corn does not exempt the sale of that stove from the tax.
D. Collection of Tax.
(1) A vendor shall collect the tax on sales of electric appliances as described in §A of this regulation that do not meet the Energy Star efficiency requirements. Evidence that the appliance is listed by the Environmental Protection Agency as a qualifying high efficiency Energy Star appliance is sufficient for the vendor not to collect the tax.
(2) A vendor shall collect the tax on sales of fuel cells, heat pumps, air conditioners, and water heaters that do not meet the energy factors or energy efficiency ratings described in §B of this regulation.
(3) Fuel cells, heat pumps, air conditioners, and water heaters installed by the purchaser so that they meet the requirements of §B of this regulation are exempt from sales tax.
(4) Certification by the manufacturer that the equipment in §B of this regulation meets the required energy efficiency rating may be relied upon by the vendor to make a determination of whether the sale of that equipment qualifies for the tax exemption.
(5) If all component parts are certified by the manufacturer as meeting the specifications in §B of this regulation, the parts are exempt from sales tax. Component parts not certified by the manufacturer as meeting the requirements for exemption as stated in §B of this regulation are subject to the tax, and the vendor shall charge and collect the tax.
(6) Component parts or equipment, or both, not certified by the manufacturer as meeting the requirements in §B of this regulation that qualify the equipment for the exemption upon installation shall be certified by a licensed engineer or similar professional that they have performed the appropriate tests to determine that the assembled unit meets or exceeds the minimum qualifications stated in §B of this regulation.
(7) If it is determined after sales or use tax has been paid that the sale should have been exempt, the person paying the tax may apply to the Comptroller for a refund pursuant to COMAR 03.06.03.05.
E. Records. Vendors and purchasers of electric appliances, fuel cells, heat pumps, air conditioners, water heaters, and multifuel pellet stoves shall keep records or documentation identifying the items as meeting the requirements for the exemption under this regulation.