[revised] You'll find a detailed discussion of the topic in this web reference from a CPA journal: http://archives.cpajournal.com/old/13928356.htm
Bottom line (assuming the article is still correct): If the cash rebate is from the utility company and not from the product's manufacturer or dealer, it is taxable. But if the rebate is in the form of a rate reduction or a credit on the utility bill, it is not taxable.
A cash rebate from the product's dealer or manufacturer is not taxable.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
