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IRS CLARIFIES ‘BINDING WRITTEN CONTRACT’ GUIDANCE FOR PTC AND ITC

WASHINGTON, D.C. – April 25, 2013

The Internal Revenue Service (IRS) today updated Notice 2013-29 to clarify guidance it had issued on April 15 regarding facilities eligible for the renewable energy production tax credit (PTC) or investment tax credit (ITC). A provision under Section 4.03 previously stated that a manufacturing, construction or production contract is only binding if it is enforceable under local law against the taxpayer or predecessor and does not limit damages to a specified amount. The revised version says that a contractual provision that limits damages to an amount equal to at least 5 percent of the total contract price will not be treated as limiting damages to a specified amount.

MASTER LIMITED PARTNERSHIPS PARITY ACT RE-INTRODUCED

WASHINGTON, D.C. – April 24, 2013

Sens. Chris Coons, D-Del.; Jerry Moran, R-Kan.; Debbie Stabenow, D-Mich.; and Lisa Murkowski, R-Alaska, today re-introduced the Master Limited Partnerships (MLP) Parity Act. The bill would allow renewable energy investors to form MLPs, a publicly traded business structure that combines the funding advantages of corporations with the tax advantages of partnerships, which is currently available only to investors in fossil-fuel based energy projects. The bill’s sponsors say its enactment could unleash significant private capital for renewable energy development.

IRS RELEASES BEGINNING OF CONSTRUCTION GUIDANCE

WASHINGTON, D.C. – April 16, 2013

The Internal Revenue Service (IRS) in Notice 2013-29 yesterday provided guidelines and a safe harbor to determine when construction has begun on a qualified facility for purposes of the renewable electricity production tax credit (PTC), or the energy investment tax credit (ITC). In Notice 2013-29, the IRS provides two methods that a taxpayer may use to establish that construction of a qualified facility has begun: starting physical work of a significant nature before Jan. 1, 2014, and/or meeting a safe harbor before Jan. 1, 2014. Detailed requirements for both methods are described in the notice.

To discuss this important guidance, join Novogradac & Company at the Novogradac Financing Renewable Energy Conference in San Francisco, April 24-25.

Questions about Notice 2013-29 can be directed to Stephen Tracy, CPA, at 415-356-8000 or Tony Grappone, CPA, at 617-330-1920.

LEGISLATION WOULD REQUIRE 85 PERCENT DOMESTIC CONTENT TO BE ELIGIBLE FOR PTC, ITC

WASHINGTON, D.C. – April 15, 2013

Rep. John Garamendi, D-Calif., last week introduced H.R. 1524, the Make It In America: Create Clean Energy Manufacturing Jobs in America Act. H.R. 1524 would require that, within three years of the bill’s enactment, 85 percent of a renewable energy facility be manufactured in the United States to be eligible for renewable energy production or investment tax credits. Rep. Garamendi introduced a similar bill, H.R. 487, in Feb. 2011.

ADMINISTRATION’S BUDGET PROPOSES PERMANENT, REFUNDABLE PTC

WASHINGTON, D.C. – April 10, 2013

In its proposed budget for fiscal year (FY) 2014 the Obama administration proposes to permanently extend the production tax credit for renewable energy property and to make it refundable. As proposed, property that is part of a facility otherwise eligible for the renewable electricity production tax credit for which construction begins after December 31, 2013 would be eligible for the refundable PTC.

To discuss these proposals, join Novogradac & Company at the Novogradac Financing Renewable Energy Conference in San Francisco, April 24-25.

TIGTA Releases 48C Program Audit

WASHINGTON, D.C. – March 27, 2013

The Treasury Inspector General for Tax Administration (TIGTA) today released an audit of the 48C Advanced Energy Manufacturing Tax Credit (MTC). TIGTA found that, as a result of Internal Revenue Service (IRS) attempts to simplify program guidance so it would be more easily understood as well as efforts to ensure equitable credit distribution, inconsistencies exist between issued guidance and the law governing the program. However, TIGTA also found that these inconsistencies did not affect the IRS’s compliance with the Internal Revenue Code when awarding credits. TIGTA did not make any recommendations for change.

Tune in to the April 2 Tax Credit Tuesday podcast to hear more about the audit and what TIGTA found.

SENATOR PROPOSES REPEAL OF THE PRODUCTION TAX CREDIT

WASHINGTON, D.C. – March 22, 2013

Sen. Lamar Alexander, R-Tenn., yesterday sponsored a budget amendment that would repeal the recently passed, one-year extension of the renewable energy production tax credit (PTC). The PTC repeal was proposed to help pay for the repeal of an excise tax on medical devices. The amendment, if passed, would repeal both tax provisions without increasing the federal debt, according to a press release on Sen. Alexander’s website.

BILL INTRODUCED TO CREATE BIOGAS INVESTMENT TAX CREDIT

WASHINGTON, D.C. – March 11, 2013

Reps. Ron Kind, D-Wis., and John Lewis, D-Ga., on Feb. 27 introduced a bill to make qualifying biogas technologies eligible for the investment tax credit (ITC) and new clean renewable energy bonds. The Biogas Investment Tax Credit Act of 2013 (H.R. 860) provides a 30 percent tax credit for biogas projects that uses anaerobic digesters or other biological, chemical, thermal or mechanical processes  to convert biomass into a gas which consists of not less than 52 percent methane and captures such gas for use as a fuel. The ITC would be available for taxable years beginning after Dec. 31, 2012. The bill was referred to the House Ways and Means Committee and Science, Space and Technology energy subcommittee.

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