On
January 1st Congress pulled an all-nighter to pass the American Taxpayer Relief
Act of 2012, which was signed into Law on January 2nd by President Obama. In
addition to dodging the “fiscal cliff” of across-the-board increase in taxes,
Public Law 112-240 provides a number of energy tax benefits. Specifically, this
legislation extends several tax credits and other incentive programs related to
Clean Cities portfolio items. A summary of these extensions can be found below:
To view the full bill click here.
IRS FAQs on claiming credits click here.
- This credit was extended from December 31, 2011 to
December 31, 2013 and effective to property placed in service after
December 31, 2011.
- This credit is equal to 30% of the cost
of any qualified alternative fuel vehicle refueling property placed in
service during the taxable year.
- at a location shall not exceed—
- (1) $30,000 in the case of a property of
a character subject to an allowance for depreciation, and
- (2) $1,000 in any other case.
- 26 USC § 30C - Alternative fuel vehicle refueling
property credit
- the term “qualified alternative fuel vehicle refueling
property” has the same meaning as the term “qualified clean-fuel vehicle
refueling property” would have under section 179A if—
- (1) does not apply to property
installed on property which is used as the principal residence of the
taxpayer, and
- (2) the following were treated
as clean-burning fuels:
- (A) Any fuel at least 85
percent of the volume of which consists of one or more of the
following: ethanol, natural gas, compressed natural gas, liquefied
natural gas, liquefied petroleum gas, or hydrogen.
- (B) Any mixture—
- (i) which consists of two
or more of the following: biodiesel (as defined in section 40A (d)(1)), diesel
fuel (as defined in section 4083 (a)(3)), or
kerosene, and
- (ii) at least 20 percent of the
volume of which consists of biodiesel (as so defined) determined
without regard to any kerosene in such mixture.
- (C) Electricity.
- (g) Termination. This section shall not apply to any property placed
in service—
- (1) in the case of property
relating to hydrogen, after December 31, 2014, and
- (2) in the case of any other
property, after December 31, 2013.
- Previously, this credit was only applied to vehicles
with at least 4 wheels. This is now extended to “qualified 2- or 3-wheeled
plug-in electric vehicles.” The credit is in the amount of “the
lesser of: (1) 10 percent of the cost of the qualified 2- or 3-wheeled
plug-in electric vehicle, or (2) $2,500.” This vehicle must be
capable of achieving a speed of 45 mph or greater and manufactured for
primary use on public streets, roads and highways. It also must be
acquired after December 31, 2011, and before January 1, 2014.
- The 4 wheel credit applies to vehicles acquired after
December 31, 2009 (the first 200,000 vehicles, with a phase out period
after that).
Extension and Modification of
Cellulosic Biofuel Producer Credit
- Extends the date for credit from January 1, 2013 to
January 1, 2014.
- Algae is now considered a qualified feedstock for this
credit; including any cultivated algae, cyanobacteria or lemna.
- The word “Cellulosic” is struck from each of the places
it appears in the text of this section of the code and replaced with
“second generation.”
- 26 USC § 40 Alcohol, etc., used as fuel -For purposes of section 38 (general business credit), the
alcohol fuels credit determined under this section for the taxable year is
an amount equal to the sum of—
- (1)
the alcohol mixture credit
- 60 cents for each gallon of alcohol
used by the taxpayer in the production of a qualified mixture,
- (2)
the alcohol credit,
- 60 cents for each gallon of alcohol
which is not in a mixture with gasoline or a special fuel (other than
any denaturant) and which during the taxable year—
- (i) is used by the taxpayer as
a fuel in a trade or business, or
- (ii) is sold by the taxpayer at
retail to a person and placed in the fuel tank of such person’s
vehicle.
- (3)
in the case of an eligible small ethanol producer, the small ethanol
producer credit, plus
- 10 cents for each gallon of qualified
ethanol fuel production of such producer.
- (4)
the second generation biofuel producer credit.
http://www.afdc.energy.gov/laws/law/US/10515
- amount equal to the applicable
amount for each gallon of qualified second generation biofuel
production
- the applicable amount means $1.01,
except that such amount shall, in the case of second generation biofuel
which is alcohol, be reduced by the sum of—
- (i) the amount of the credit in
effect for such alcohol under subsection (b)(1) (without regard to
subsection (b)(3)) at the time of the qualified s second generation
biofuel production, plus
- (ii) in the case of ethanol,
the amount of the credit in effect under subsection (b)(4) at the time
of such production.
Extension of Incentives for
Biodiesel and Renewable Diesel.
- This incentive is extended from December 31, 2011 until
December 31, 2013.
- 26 USC § 40A - Biodiesel and renewable diesel used as
fuel
http://www.afdc.energy.gov/laws/law/US/396
- (a) General rule - For purposes of section 38 (general business
credit), the biodiesel fuels credit is an amount equal to the sum of—
- (1) the biodiesel mixture
credit, plus
- $1.00 for each gallon of
biodiesel used by the taxpayer in the production of a qualified
biodiesel mixture.
- (2) the biodiesel credit,
plus
- $1.00 for each gallon of
biodiesel which is not in a mixture with diesel fuel and which
during the taxable year—
- (i) is used by the taxpayer
as a fuel in a trade or business, or
- (ii) is sold by the
taxpayer at retail to a person and placed in the fuel tank of such
person’s vehicle.
- (3) in the case of an
eligible small agri-biodiesel producer, the small agri-biodiesel
producer credit.
- 10 cents for each gallon of
qualified agri-biodiesel production of such producer.
Extension and Modification of
Credits with Respect to Facilities Producing Energy from Certain Renewable
Resources - Production Tax Credit
- Definition of Municipal Solid Waste - Paper which is commonly recycled is now excluded
from this definition.
- Definition of Qualified Facility – previously said that facility must be placed in
service after December 31, 1993 and before January 1, 2013. In order to be
considered a qualified investment credit facility to be an energy
property, the property must now be placed in service after 2008 and begin
construction prior to January 1, 2014 (and meet the definitions described
here)
- o This new definition applies to wind facilities,
closed loop biomass facilities, open loop biomass facilities, geothermal
facilities, landfill gas facilities, trash facilities, qualified
hydropower facilities, and marine and hydrokinetic renewable energy
facilities.
- o For closed loop biomass facilities,
modification means if the construction of such modification begins before
January 1, 2014.
- o For incremental hydropower production, an
efficiency improvement or addition to capacity shall be treated as
“placed in service before January 1, 2014,” if the construction of such
improvement or addition begins before such date.
- This amendment extends the allowance from January 1,
2013 to January 1, 2014 (property placed in service after December 31,
2012).
- Again, algae is treated as a qualified feedstock for
purposes of bonus depreciation for biofuel plant property (cellulosic is
replaced with “second generation”).
Extension of Special Rule for Sales
or Dispositions to Implement FERC or State Electric Restructuring Policy for
Qualified Electric Utilities.
- Deadline to do this is extended from January 1, 2012 to
January 1, 2014. This amendment applies to dispositions made after
December 31, 2011
- This Credit is extended from December 31, 2011 to
December 31, 2013.
- 26 USC § 6426 - Credit for alcohol fuel, biodiesel, and
alternative fuel mixtures
http://www.afdc.energy.gov/laws/law/US/417
- (a) Allowance of credits - There shall be allowed as a credit—
- (1) against the tax imposed
by section 4081 an amount equal to the sum of the credits described in
subsections (b), (c), and (e), and
- (2) against the tax imposed
by section 4041 an amount equal to the sum of the credits described in
subsection (d).
- No credit shall be allowed in the case of the credits
described in subsections (d) and (e) unless the taxpayer is registered
under section 4101.
- (b) Alcohol fuel mixture credit
- (1) In general - For purposes
of this section, the alcohol fuel mixture credit is the product of the
applicable amount and the number of gallons of alcohol used by the
taxpayer in producing any alcohol fuel mixture for sale or use in a
trade or business of the taxpayer.
- (2) Applicable amount
-
- (A) In general - Except as
provided in subparagraphs (B) and (C), the applicable amount is—
- o (i) in the case of
calendar years beginning before 2009, 51 cents, and
- o (ii) in the case of
calendar years beginning after 2008, 45 cents.
- (B) Mixtures not containing
ethanol
- In the case of an alcohol
fuel mixture in which none of the alcohol consists of ethanol, the
applicable amount is 60 cents.
- (c) Biodiesel mixture credit
- (1) The biodiesel mixture
credit is the product of the applicable amount and the number of
gallons of biodiesel used by the taxpayer in producing any biodiesel
mixture for sale or use in a trade or business of the taxpayer.
- (2) Applicable amount is $1.00.
http://www.afdc.energy.gov/laws/law/US/395
- (d) Alternative fuel credit
- (1) The alternative fuel
credit is the product of 50 cents and the number of gallons of
an alternative fuel or gasoline gallon equivalents of a nonliquid
alternative fuel sold by the taxpayer for use as a fuel in a
motor vehicle or motorboat, sold by the taxpayer for use as a fuel in
aviation, or so used by the taxpayer.
- (e) Alternative fuel mixture credit
- (1) The alternative fuel
mixture credit is the product of 50 cents and the number of gallons
of alternative fuel used by the taxpayer in producing any
alternative fuel mixture for sale or use in a trade or business of the
taxpayer.
Extension
of discretionary funding for the following U.S. Department of Agriculture
programs through September 2013:
The changes outlined above became
effective immediately. It may take time, however, for the relevant agencies to
update documentation to reflect these extensions and changes. For further
information, please refer:
A special thank you to the Clean Cities Technical Response Team and South Shore Clean Cities for their extensive informational resources.
