Proposed Rule2024-20748
Section 30C Alternative Fuel Vehicle Refueling Property Credit
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 19, 2024
Issuing agencies
Treasury DepartmentInternal Revenue Service
Abstract
This document contains proposed regulations regarding the Federal income tax credit under the Inflation Reduction Act of 2022 for certain costs relating to qualified alternative fuel vehicle refueling property that is placed in service within a low-income community or within a non-urban census tract. These proposed regulations would affect eligible taxpayers who place qualified property into service during a taxable year.
Full Text
<html>
<head>
<title>Federal Register, Volume 89 Issue 182 (Thursday, September 19, 2024)</title>
</head>
<body><pre>
[Federal Register Volume 89, Number 182 (Thursday, September 19, 2024)]
[Proposed Rules]
[Pages 76759-76782]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-20748]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-118269-23]
RIN 1545-BR19
Section 30C Alternative Fuel Vehicle Refueling Property Credit
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations regarding the
Federal income tax credit under the Inflation Reduction Act of 2022 for
certain costs relating to qualified alternative fuel vehicle refueling
property that is placed in service within a low-income community or
within a non-urban census tract. These proposed regulations would
affect eligible taxpayers who place qualified property into service
during a taxable year.
DATES: Written or electronic comments and requests for a public hearing
must be received by November 18, 2024.
ADDRESSES: Commenters are strongly encouraged to submit public comments
electronically via the Federal eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a> (indicate IRS and REG-118269-23) by following the
online instructions for submitting comments. Requests for a public
hearing must be submitted as prescribed in the ``Comments and Requests
for a Public Hearing'' section. Once submitted to the Federal
eRulemaking Portal, comments cannot be edited or withdrawn. The
Department of the Treasury (Treasury Department) and the IRS will
publish for public availability any comments submitted to the IRS's
public docket. Send paper submissions to: CC:PA:01:PR (REG-118269-23),
Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin
Station, Washington, DC 20044.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
contact Kevin I. Babitz or Whitney E. Brady of Office of Associate
Chief Counsel (Passthroughs & Special Industries) at (202) 317-6853
(not a toll-free number); concerning submissions of comments and
requests for a public hearing, Publications and Regulations Section at
(202) 317-6901 (not a toll-free number) or by email to
<a href="/cdn-cgi/l/email-protection#89f9fcebe5e0eae1ece8fbe0e7eefac9e0fbfaa7eee6ff"><span class="__cf_email__" data-cfemail="b4c4c1d6d8ddd7dcd1d5c6dddad3c7f4ddc6c79ad3dbc2">[email protected]</span></a> (preferred).
SUPPLEMENTARY INFORMATION:
Authority
This document contains proposed amendments to the Income Tax
Regulations (26 CFR part 1) under sections 30C, 48, 48E, 6417, and 6418
of the Internal Revenue Code (Code) issued by the Secretary of the
Treasury or her delegate (Secretary) under the authority granted under
sections 30C(e)(5), (g)(4), and (h), 45(b)(12), 48(a)(16), 48E(i),
6417(h), 6418(g) and (h), and 7805(a) of the Code (proposed
regulations).
Section 30C includes three specific delegations of regulatory
authority. First, 30C(h) provides a general grant of regulatory
authority for section 30C as a whole, stating, ``[t]he Secretary shall
prescribe such regulations as necessary to carry out the provisions of
this section.'' Second, section 30C(g)(4) provides a specific
delegation of authority related to the prevailing wage and registered
apprenticeship (PWA) requirements: ``The Secretary shall issue such
regulations or other guidance as the Secretary determines necessary to
carry out the purposes of this subsection, including regulations or
other guidance that provides for requirements for recordkeeping or
information reporting for purposes of administering the requirements of
this subsection.'' Third, section 30C(e)(5) provides a specific
delegation of authority by cross-reference to provide recapture rules
similar to those under former section 179A (described in part III.A. of
the Background section and part IV.A. of the Explanation of Provisions
section) as authorized by former section 179A(e)(4).
Sections 45(b)(12) and 48(a)(16) provide specific delegations of
authority with respect to the requirements of section 45(b), including
the PWA requirements of section 45(b)(7) and (8) that sections
48(a)(10) and (11) and 48E(d)(3) and (4) refer to, each stating,
``[t]he Secretary shall issue such regulations or other guidance as the
Secretary determines necessary to carry out the purposes of this
subsection, including regulations or other guidance which provides for
requirements for recordkeeping or information reporting for purposes of
administering the requirements of this subsection.'' Section 48E(i)
provides a specific delegation of authority with respect to the
requirements of section 48E, including the PWA requirements of section
48E(d)(3) and (4), stating, that ``[n]ot later than January 1, 2025,
the Secretary shall issue guidance regarding implementation of this
section.''
Sections 6417(h) and 6418(h) provide specific delegations of
authority with respect to the elective payment election rules of
section 6417 and the transfer of certain credits under section 6418,
each stating, in part, that ``[t]he Secretary shall issue such
regulations or other guidance as may be necessary to carry out the
purposes of this section . . .'' Finally, section 7805(a) authorizes
the Secretary to prescribe all needful rules and regulations for the
enforcement of the Code.
Background
I. Overview
Section 30C of the Code allows a credit (section 30C credit)
against the tax imposed by chapter 1 of the Code (chapter 1) with
respect to each item of qualified alternative fuel vehicle refueling
property that a taxpayer places in service. The section 30C credit is
determined and allowed with respect to the taxable year in which the
taxpayer places the item of property in service.
Section 30C was originally enacted by section 1342(a) of the Energy
Policy Act of 2005, Public Law 109-58, 119 Stat. 594, 1049 (Aug. 8,
2005), to provide a credit for the cost of qualified alternative fuel
vehicle refueling property. Section 30C has been amended several times
since its enactment, most recently by section 13404 of Public Law 117-
169, 136 Stat. 1818, 1966 (August 16, 2022), commonly known as the
Inflation Reduction Act of 2022 (IRA). As amended by the IRA, section
30C allows taxpayers to claim a credit for up to 30 percent of the cost
of qualified alternative fuel vehicle refueling property placed in
service after December 31, 2022, and on or before December 31, 2032.
The amount of the section 30C credit is treated as a personal
credit or a general business credit depending on the character of the
property that the taxpayer places in service. In general, the section
30C credit is a nonrefundable personal credit allowed under subpart B
of part IV of subchapter A of chapter 1. However, the amount of the
section 30C credit that is attributable to property that is of a
character subject to an allowance for depreciation (depreciable
property) is treated under section 30C(d)(1) as a current year business
credit under section 38(b) of the Code instead of being allowed under
section 30C(a).
[[Page 76760]]
II. Credit Amount and Limitation
For property placed in service after December 31, 2022, and on or
before December 31, 2032, section 30C(a) provides a credit equal to 6
percent of the cost of any qualified alternative fuel vehicle refueling
property that the taxpayer places in service during the year, if the
property is depreciable property. However, for depreciable property
that is placed in service as part of a qualified alternative fuel
vehicle refueling project that satisfies the prevailing wage and
apprenticeship requirements (discussed further in part V of this
Background section), the amount of the section 30C credit is multiplied
by five. For property that is not subject to depreciation, section
30C(a) allows a 30 percent credit for any property placed in service
during the taxable year, with no requirement to satisfy any prevailing
wage and apprenticeship requirements.
The section 30C credit with respect to any single item of qualified
alternative fuel vehicle refueling property placed in service by the
taxpayer during the taxable year is limited to $100,000 in the case of
depreciable property, and $1,000 in any other case. Before the IRA's
amendments to section 30C became applicable, prior law limited the
section 30C credit, on a per location basis, to $30,000 in the case of
depreciable property and to $1,000 in the case of any other property.
Section 13404 of the IRA modified the limitation on the section 30C
credit so that it now applies with respect to any single item of
qualified alternative fuel vehicle refueling property instead of with
respect to all qualified alternative fuel vehicle refueling property at
a location.
Under section 30C(e)(1), taxpayers who claim a section 30C credit
are required to reduce the basis of any property for which the section
30C credit is allowable by the amount of the credit allowed (without
regard to the rules of section 30C(d)). If a taxpayer elects not to
claim the credit, then no section 30C credit is allowed, whether under
section 30C(a) or section 38, and no basis reduction is required. See
section 30C(e)(4).
No section 30C credit is allowable for the portion of the cost of
any property taken into account under section 179. Section 30C(e)(3).
III. Qualified Alternative Fuel Vehicle Refueling Property
A. In General
Section 30C(c) defines ``qualified alternative fuel vehicle
refueling property'' by reference to section 179A of the Code, with
some modifications. (Section 30C(e)(6) clarifies that for purposes of
section 30C, any references to ``section 179A'' are to section 179A as
in effect immediately before its repeal by section 221(a)(34)(A) of the
Tax Increase Prevention Act of 2014, enacted as Division A of Public
Law 113-295, 128 Stat. 4010, 4042 (December 19, 2014), which is
referred to as ``former section 179A'' in this preamble.) Following the
definition in former section 179A, therefore, qualified alternative
fuel vehicle refueling property generally includes any depreciable
property (not including a building and its structural components), the
original use of which begins with the taxpayer, and that is (1) for the
storage or dispensing of a clean-burning fuel into the fuel tank of a
motor vehicle propelled by such fuel, but only if the storage or
dispensing of the fuel is at the point where such fuel is delivered
into the fuel tank of the motor vehicle, or (2) for the recharging of
motor vehicles propelled by electricity, but only if the property is
located at the point where the motor vehicles are recharged. See former
section 179A(d). Notwithstanding former section 179A's general
requirement that the property be depreciable, section 30C allows a
taxpayer to claim a credit for qualified alternative fuel vehicle
refueling property that is not depreciable property, provided that the
property is installed at the taxpayer's principal residence (within the
meaning of section 121 of the Code). See section 30C(c)(1)(A) and
former section 179A(d)(1).
For purposes of section 30C, ``clean-burning fuels'' includes only
(1) 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,
liquified natural gas, liquefied petroleum gas, or hydrogen; (2) any
mixture that consists of two or more of the following: biodiesel (as
defined in section 40A(d)(1) of the Code), diesel fuel (as defined in
section 4083(a)(3) of the Code), or kerosene, and at least 20 percent
of the volume of which consists of biodiesel determined without regard
to any kerosene in such mixture; (3) electricity; or (4) any
transportation fuel (as defined in section 45Z(d)(5) of the Code) that
is produced after December 31, 2024.
Section 30C does not provide a general definition of ``motor
vehicle.'' However, former section 179A(e)(2) defined motor vehicle to
mean any vehicle that is manufactured primarily for use on public
streets, roads, and highways (not including a vehicle operated
exclusively on a rail or by rails) and that has at least four wheels.
Further, section 30C(f) explicitly allows the credit for depreciable
property to recharge two- and three-wheeled motor vehicles manufactured
primarily for use on public streets, roads, or highways that are
propelled by electricity. Section 30C(f)(1)(A) requires that the
depreciable property ``meets the requirements of subsection (a)(2),''
but there is no subsection (a)(2) in the statute.
Section 30C(c)(2) provides that qualified alternative fuel vehicle
refueling property does not exclude otherwise eligible property that
both is capable of charging the battery of a motor vehicle propelled by
electricity and also allows discharging electricity from such battery
to an electric load external to the motor vehicle.
B. Eligible Census Tracts
Section 30C, as amended by the IRA, requires that property be
placed in service in an eligible census tract in order to qualify for
the credit. An eligible census tract is any population census tract
that either is a low-income community under section 45D(e) of the Code
or is not an urban area (non-urban area). See section 30C(c)(3)(B). The
Census Bureau defines a ``population census tract'' as a small-area
geographic division of a county or statistically equivalent entity
defined for the tabulation and presentation of data from the decennial
census and selected other statistical programs. Population census
tracts are comprised of ``census blocks,'' and a census block is the
smallest geographic area for which the Census Bureau collects and
tabulates decennial census data. The Census Bureau assigns to each
population census tract, including census tracts in U.S. territories, a
unique 11-digit census tract Geographic Identifier (GEOID). Each 11-
digit census tract GEOID is comprised of a 2-digit state GEOID, 3-digit
county GEOID, and 6-digit census tract GEOID.
1. Low-Income Community Census Tracts
Section 30C(c)(3)(B)(i)(I) includes as an eligible census tract any
population census tract that is described in section 45D(e), which
defines the term ``low-income community'' for purposes of the new
markets tax credit (NMTC). As a general rule, section 45D(e)(1) defines
a low-income community as any population census tract for which the
poverty rate is at least 20 percent. The statute also provides more
specific ways that a tract can constitute a low-income community.
Section 45D(e)(1) provides that a tract not located within a
[[Page 76761]]
metropolitan area constitutes a low-income community if the median
family income for such tract does not exceed 80 percent of statewide
median family income. Similarly, a tract located within a metropolitan
area is a low-income community if the median family income for such
tract does not exceed 80 percent of the greater of the statewide median
family income or the metropolitan area's median family income. Section
45D(e)(2) provides that certain targeted populations (within the
meaning of section 103(20) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4702(20)) may be treated
as low-income communities. Section 45D(e)(3) describes the appropriate
areas not within population census tracts that are used to determine
poverty rates and median family income. Section 45D(e)(4) describes
certain population census tracts with a population of less than 2,000
that are treated as a low-income community for purposes of the NMTC.
Finally, section 45D(e)(5) describes population census tracts located
within a high migration rural county.
Following the guidelines in section 45D(e), the Community
Development Financial Institutions Fund (CDFI Fund) designates
population census tracts as low-income communities for purposes of the
NMTC. The CDFI Fund determines these population census tracts based in
part on American Community Survey (ACS) 5-year estimates, which are
published by the Census Bureau. The CDFI Fund updates its NMTC
determination of ``low-income community'' census tracts approximately
every five years based on the updated ACS 5-year estimates. The last
update occurred on September 1, 2023, when the NMTC low-income
community census tracts were updated to be based on the 2016-2020 ACS
5-year estimates (2016-2020 NMTC tracts), which use the 2020
delineation of census tract boundaries (2020 census tract boundaries).
Prior to September 1, 2023, the NMTC low-income community census tracts
were based on 2011-2015 ACS 5-year estimates (2011-2015 NMTC tracts),
which use the 2015 delineation of census tract boundaries (2015 census
tract boundaries). The next update is expected to occur in 2028.
When there is an update, the CDFI Fund provides a one-year
transition period during which taxpayers may look to either of the 5-
year census tracts. Therefore, between September 1, 2023, and August
31, 2024, taxpayers can look to either the 2011-2015 NMTC or the 2016-
2020 NMTC tracts to determine which population census tracts are low-
income communities for the NMTC (and, by extension for section 30C
purposes). On or after September 1, 2024, taxpayers must look to the
2016-2020 NMTC tracts to determine which population census tracts are
low-income communities for the NMTC.
2. Non-Urban Area
Pursuant to section 30C(c)(3)(B)(i)(II), an eligible census tract
includes a non-urban area. Section 30C(c)(3)(B)(ii), defines ``urban
area'' as a population census tract that has been designated as an
urban area by the Secretary of Commerce in the most recent decennial
census. However, as of the 2020 Census (that is, the most recent
decennial census as of the publication of this document), the Census
Bureau defines urban areas on the basis of census blocks and not on the
basis of population census tracts. The Census Bureau determines urban
areas based on how densely developed a territory is, and to what extent
the territory encompasses residential, commercial, and other non-
residential urban land uses. The Census Bureau delineates urban areas
after each decennial census.
3. Census Tracts in U.S. Territories
Section 30C(e)(3) provides generally that property used outside the
United States does not qualify for the section 30C credit by excluding
property referred to in section 50(b)(1) of the Code, which provides
generally that property used predominantly outside the United States
does not qualify for a credit to which section 50 applies. However,
section 50(b)(1)(B) provides an exception for certain categories of
property described in section 168(g)(4) of the Code. Section 168(g)(4)
describes, among other things, property owned by a domestic corporation
or by a United States citizen (other than a citizen entitled to the
benefits of section 931 or section 933) and that is used predominantly
in a territory (also referred to as a possession) of the United States
by such a corporation or such a citizen, or by a corporation created or
organized in, or under the law of, a territory of the United States.
Accordingly, because section 30C(e)(3), by reason of sections
50(b)(1)(B) and 168(g)(4), would allow for qualified alternative fuel
vehicle refueling property to be used by certain taxpayers
predominantly in a territory of the United States, eligible census
tracts include low-income community census tracts and non-urban census
tracts located in a territory of the United States.
IV. Property Used by a Tax-Exempt or Government Entity
Section 30C(e)(2) provides that in the case of any qualified
alternative fuel vehicle refueling property the use of which is
described in section 50(b)(3) (generally, use by tax-exempt
organizations) or (b)(4) (generally, use by the United States or a
government entity or foreign persons or entities) and that is not
subject to a lease, the person who sold such property to the person or
entity using such property is treated as the taxpayer that placed such
property in service, but only if the seller clearly discloses to the
tax-exempt or government entity in a document the amount of any credit
allowable under section 30C(a) with respect to such property
(determined without regard to section 30C(d) (treating the credit as a
credit listed in section 38(b) or as a personal credit)). For purposes
of section 30C(d), property to which section 30C(e)(2) applies is
treated as of a character subject to an allowance for depreciation.
V. Prevailing Wage and Registered Apprenticeship Requirements
The IRA amended several sections of the Code, including section
30C, to provide increased credit amounts for taxpayers who satisfy
certain requirements, including an increased credit amount for
satisfying prevailing wage and registered apprenticeship (PWA)
requirements. This same increased credit amount is available under
certain sections of the Code, including section 30C, if beginning of
construction occurs before January 29, 2023 (BOC Exception).\1\
---------------------------------------------------------------------------
\1\ On November 30, 2022, the Treasury Department and the IRS
published Notice 2022-61 in the Federal Register (87 FR 73580,
corrected in 87 FR 75141 (Dec. 7, 2022)), providing guidance with
respect to the PWA requirements in section 45(b)(7) and (8),
including initial guidance for determining the beginning of
construction under section 45 and other credits and the beginning of
installation under section 179D. The final PWA regulations published
in the Federal Register (89 FR 53184) (part III of the Background
section) provide further detail on the BOC Exception.
---------------------------------------------------------------------------
For properties placed in service after December 31, 2022, the
section 30C credit is equal to 6 percent for depreciable property. If a
taxpayer satisfies the PWA requirements in section 30C(g)(2) and (3) or
meets the BOC Exception with respect to a qualified alternative fuel
vehicle refueling project, then the credit determined under section
30C(a) for any qualified alternative fuel vehicle refueling property
that is depreciable property and that is part of such project is
multiplied by five. For purposes of the PWA requirements, section
[[Page 76762]]
30C(g)(1)(B) defines a ``qualified alternative fuel vehicle refueling
project'' as a project consisting of one or more properties that are
part of a single project. Section 30C(g)(2)(A) requires the taxpayer to
ensure that any laborers and mechanics employed by the taxpayer or any
contractor or subcontractor in the construction of any qualified
alternative fuel vehicle refueling property that is part of a qualified
alternative fuel vehicle refueling project are paid wages at rates not
less than prevailing rates. Under section 30C(g)(3), rules similar to
the rules in section 45(b)(8) apply regarding the apprenticeship
requirements.
On June 25, 2024, the Treasury Department and the IRS published
final regulations in the Federal Register (89 FR 53184) that govern the
increased credit or deduction amount available for taxpayers satisfying
the PWA requirements that the IRA established with respect to several
credits, including the section 30C credit (final PWA regulations).
Specifically for the section 30C credit, the final PWA regulations
provided clarifications to the applicable scope of the PWA
requirements.
VI. Coordination With Sections 6417 and 6418
Section 6417 allows an applicable entity (as defined in section
6417(d)(1)(A), generally including tax-exempt and government entities,
Indian Tribal governments, and Alaska Native Corporations, among
others) to make an election to be treated as making a payment against
the tax imposed by subtitle A of the Code for the taxable year with
respect to which an applicable credit (as defined in section 6417(b))
was determined equal to the amount of the applicable credit. Section
6417(b)(1) includes the amount of a section 30C credit, to the extent
treated under section 30C(d)(1) as a general business credit under
section 38, as an applicable credit.
Section 6418 permits an eligible taxpayer (defined in section
6418(f)(2) as a taxpayer not described in section 6417(d)(1)(A)) to
make an election to transfer all or a portion of an eligible credit
(defined in section 6418(f)(1)), determined with respect to such
taxpayer for any taxable year to an unrelated taxpayer (within the
meaning of section 267(b) or 707(b)(1)). Section 6418(f)(1)(A)(i)
includes the amount of a section 30C credit, to the extent treated
under section 30C(d)(1) as a general business credit under section 38,
as an eligible credit.
VII. Prior Guidance, Request for Comments, and Other Documents Relating
to the Alternative Fuel Vehicle Refueling Property Credit
A. Notice 2007-43
On May 29, 2007, the Treasury Department and the IRS published
Notice 2007-43, 2007-22 I.R.B. 1318, which provided interim guidance on
the then-recently enacted section 30C. This notice provided specific
guidance relating to the computation of the section 30C credit and the
treatment for purposes of the credit of converted and dual-use
refueling property.
B. Notice 2022-56
On November 21, 2022, the Treasury Department and the IRS published
Notice 2022-56, 2022-47 I.R.B. 480. This notice requested general
comments on issues arising under section 30C, as amended by the IRA, as
well as specific comments concerning: (1) depreciable property; (2) the
definition of a ``single item''; (3) bidirectional charging equipment;
(4) eligible census tracts; (5) recapture; and (6) miscellaneous
topics. The Treasury Department and the IRS received 135 comments from
industry participants, environmental groups, individual consumers, and
other stakeholders. The Treasury Department and the IRS appreciate the
commenters' interest and engagement on these issues. These comments
have been considered carefully in the preparation of these proposed
regulations.
C. Notice 2024-20
On February 12, 2024, the Treasury Department and the IRS published
Notice 2024-20, 2024-7 I.R.B. 668, to provide guidance on eligible
census tracts for the section 30C credit and to announce the intent to
propose regulations for the credit. This notice describes relevant
census concepts, provides background and definitions for low-income
communities and non-urban census tracts, and explains the census tract
boundaries that apply for the relevant census tract determinations. The
notice also provides taxpayers with a list of eligible census tracts in
advance of the 2023 filing season and explains how taxpayers can
identify the 11-digit census tract identifier for a location where a
property is placed in service.
Explanation of Provisions
I. 30C Property, Recharging Property, Refueling Property
Proposed Sec. 1.30C-1(a) would provide a general overview of the
proposed section 30C regulations. Proposed Sec. 1.30C-1(b) would
provide definitions that would apply for purposes of section 30C and
the 30C regulations.
The proposed regulations use the term ``30C property'' to describe
property that is eligible for the section 30C credit. As proposed, the
term 30C property would generally be synonymous with the statutory
phrase ``qualified alternative fuel vehicle refueling property.''
Proposed Sec. 1.30C-1(b)(1) would define 30C property to include any
property (other than real property and a building and its structural
components) that is comprised of components that are functionally
interdependent for ``refueling property'' or ``recharging property''
and, if applicable, an integral part of the refueling property or
recharging property. For purposes of the proposed regulations,
refueling property would mean property for the storage and dispensing
of a qualified alternative fuel into the fuel tank of a motor vehicle
propelled by such fuel, but only if the storage or dispensing of the
fuel is at the point where such fuel is delivered into the fuel tank of
the motor vehicle. Proposed Sec. 1.30C-1(b)(1)(i)(A); see also
proposed Sec. 1.30C-1(b)(16)(i). Similarly, ``recharging property''
would mean property for the recharging of a motor vehicle propelled by
electricity, but only if the property is located at the point where the
motor vehicle is recharged. Proposed Sec. 1.30C-1(b)(1)(i)(B); see
also proposed Sec. 1.30C-1(b)(16)(ii).
Proposed Sec. 1.30C-1(b)(14) would provide that components are
``functionally interdependent'' if the placing in service of each
component is dependent upon the placing in service of each of the other
components in order to refuel or recharge a motor vehicle. Proposed
Sec. 1.30C-1(b)(15) would further provide that property is an
``integral part'' of a refueling or recharging property if it is used
directly in the intended function of the refueling property or
recharging property and is essential to the completeness of this
intended function, meets all of the requirements for 30C property
described in proposed Sec. 1.30C-1(b)(1)(iii), is owned by the
taxpayer that owns the refueling property or recharging property, and
is specifically designed to be integrated with the refueling property
or recharging property with which it is associated.
Proposed Sec. 1.30C-1(b)(1)(iii) would provide a list of
additional requirements that any eligible property must meet to be 30C
property. First, the property must either be of a character subject to
an allowance for depreciation or installed on property that is used as
the principal residence of the taxpayer (within the meaning of section
121).
[[Page 76763]]
Second, the property's original use must begin with the taxpayer.
Proposed Sec. 1.30C-1(b)(18) would provide that ``original use'' has
the same meaning as in Sec. 1.48-2(b)(7). Finally, the property must
be placed in service in an eligible census tract (see discussion of
eligible census tracts in part II.E of this Explanation of Provisions
section).
II. General Rules
A. Amount of Credit
Proposed Sec. 1.30C-2(a)(1) would provide that section 30C(a)
allows a taxpayer to claim as a credit against the tax imposed by
chapter 1 an amount equal to a percentage of the cost of any 30C
property placed in service by the taxpayer during the taxable year,
subject to certain dollar-amount limitations described in section
30C(b) and proposed Sec. 1.30C-2(a)(4).
Consistent with section 30C(a), proposed Sec. 1.30C-2(a)(2)(i)
would provide that in the case of depreciable property, section 30C(a)
allows as a credit against tax an amount equal to 6 percent of the cost
of any 30C property placed in service by the taxpayer during the
taxable year. Under proposed Sec. 1.30C-2(a)(2)(ii), the section 30C
credit for the cost of any 30C property placed in service as part of a
project that meets the PWA requirements is multiplied by 5. Property
placed in service by certain tax-exempt organizations and governmental
units described in section 50(b)(3) and (4) of the Code is treated as
property of a character subject to an allowance for depreciation for
purposes of calculating the section 30C credit. See sections 30C(e)(2)
and 6417(d)(2) and Sec. 1.6417-2(c). Proposed Sec. 1.30C-2(a)(2)(iii)
would provide that in the case of property of a character not subject
to an allowance for depreciation, section 30C(a) allows as a credit
against tax an amount equal 30 percent of the cost of any 30C property
placed in service by the taxpayer during the taxable year provided that
such property is installed on property that is used as the taxpayer's
principal residence (within the meaning of section 121). Consistent
with section 30C(b), proposed Sec. 1.30C-2(a)(4) would limit the
section 30C credit with respect to any single item of 30C property
placed in service by the taxpayer during the taxable year to $100,000
for depreciable property and $1,000 for non-depreciable property.
If the business use of the property is 50 percent or less, proposed
Sec. 1.30C-2(a)(3) would provide rules for apportioning the section
30C credit between business use and personal use. If the business use
is more than 50 percent, then the section 30C credit would be treated
under the proposed regulations only as a general business credit under
section 30C(d)(1) (and subject to the $100,000 limitation). If the
business use of the 30C property is 50 percent or less, then the
property would be considered ``apportioned-use property'' under the
proposed regulations and the taxpayer's section 30C credit for that
taxable year for that 30C property would be apportioned in accordance
with the taxpayer's use of the property between the general business
credit under section 30C(d)(1) and the personal credit allowed under
section 30C(a) pursuant to section 30C(d)(2). To be within these
apportionment rules, the proposed regulations would provide that the
30C property must be installed at the taxpayer's personal residence to
qualify for the personal credit, but also be used for business use. For
example, these proposed rules would apply to a taxpayer who operates a
delivery service and installs an electric vehicle charger at her
personal residence, which she uses to charge both her personal vehicle
and her delivery vehicle.
If 30C property is apportioned-use property, proposed Sec. 1.30C-
2(a)(4)(ii) would provide that the dollar-amount limitation must be
apportioned in the same manner as the taxpayer's credit under section
30C. For example, in the case of 30C property the business use of which
is 40 percent of a taxpayer's total use of the property for the taxable
year in which the property is placed in service, the portion treated as
a general business credit under section 30C(d)(1) cannot exceed $40,000
($100,000 multiplied by 40 percent), and the portion treated as a
section 30C credit allowed under section 30C(a) cannot exceed $600
($1,000 multiplied by 60 percent).
B. Single Item of Property and Calculating the Section 30C Credit
As discussed in part II of the Background section of this preamble,
one major change that the IRA made to section 30C was to allow the
credit per single item of property, rather than per location. Thus,
proposed Sec. 1.30C-2(b)(1) would provide that taxpayers may claim a
section 30C credit if they place in service at least one single item of
30C property during the taxable year.
Section 30C does not define ``single item of property.'' In Notice
2022-56, the Treasury Department and the IRS asked for comments on how
to define a ``single item of property.'' Many commenters suggested
that, for purposes of electric vehicle chargers, a ``single item''
should be defined as each charging port and that the item also should
include functionally interdependent property as well as other property
that commenters deemed necessary for the installation and use of the
charger. The proposed regulations largely adopt these comments.
1. Definition of Single Item of 30C Property
For purposes of calculating the section 30C credit, proposed Sec.
1.30C-2(b)(1) would define a single item of 30C property as each
charging port for recharging property, each fuel dispenser for
refueling property, or each qualified alternative fuel storage property
or electrical energy storage property.
For purposes of the proposed regulations, a charging port would
mean the system within a charger that charges one motor vehicle. Under
proposed Sec. 1.30C-1(b)(6), a charging port may have multiple
connectors, but it can provide power at its rated electrical output to
charge only one motor vehicle through one connector at a time. Some
chargers may have more than one port, in which case proposed Sec.
1.30C-2(b)(2)(ii) would provide that the cost of the charger would need
to be allocated among the number of ports for purposes of determining
the credit. The Treasury Department and the IRS agree with the
commenters that allowing the credit based on the number of motor
vehicles that could be charged simultaneously at the port's rated
electrical output is appropriate based on the IRA amendments to section
30C to provide a credit limit per single item of property, rather than
a broader term such as per charging property or per location, and
consistent with one purpose of the IRA to expand incentives for
taxpayers to transition to clean vehicles.
The proposed regulations would define a fuel dispenser as the unit
through which fuel is dispensed into the fuel tank of a motor vehicle
if such unit is capable of fueling at or above the dispenser's minimum
rate of fueling and has at least one hose and nozzle. Proposed Sec.
1.30C-1(b)(12) would provide that a dispenser may optionally include a
meter, valve, controller, and enclosure. These proposed regulations
would use these definitions of ``fuel dispenser'' for refueling
property and ``charging port'' for recharging property with the goal to
similarly situate the accounting of credits among the eligible
alternative fuels with consideration of their refueling technologies
and station designs.
Proposed Sec. 1.30C-1(b)(25) would define two types of storage
property: qualified alternative fuel storage
[[Page 76764]]
property and electrical energy storage property. Under proposed Sec.
1.30C-1(b)(25)(ii), ``qualified alternative fuel storage property''
would mean property used for the storage of such qualified alternative
fuel. Under proposed Sec. 1.30C-1(b)(20), qualified alternative fuel
would generally refer to all clean-burning fuels (as defined in
proposed Sec. 1.30C-1(b)(7)) except electricity. Proposed Sec. 1.30C-
1(b)(25)(iii) would define ``electrical energy storage property'' to
mean property that receives, stores, and delivers energy for conversion
to electricity. Under proposed Sec. 1.30C-1(b)(25), both types of
storage property would be required to be located at the point where the
motor vehicle is refueled or recharged. Proposed Sec. 1.30C-1(b)(16)
would provide that this requirement is generally satisfied if the
storage property is located at the same or an immediately adjacent
physical address as the location where the fuel is delivered into the
fuel tank of the motor vehicle or where the motor vehicle is recharged.
Former section 179A(d)(3)(A), adopted by reference into section
30C(c), uses the language ``for the storage or dispensing of a clean-
burning fuel into the fuel tank of a motor vehicle propelled by such
fuel'' in its definition of qualified clean-fuel vehicle refueling
property, indicating that clean-burning fuel storage property is a
separate item of qualified clean-fuel vehicle refueling property.
Former section 179A(d)(3)(B) uses the language ``for the recharging of
motor vehicles propelled by electricity'' as a separate prong of this
same definition, indicating that electrical energy storage property is
not a separate item of qualified clean-fuel vehicle refueling property.
However, former section 179A(e)(1) includes electricity within the
definition of clean-burning fuels, such that electric vehicle refueling
property could be eligible property under either former section
179A(d)(3)(A) (where storage is specifically mentioned) or (B) (where
storage is not specifically mentioned). These proposed regulations
would provide that the cost of electrical energy storage property that
is used for charging motor vehicles is creditable as a separate item of
property under section 30C. Electrical energy storage can be used for
electric vehicle charging to smooth costs and to minimize the impact on
the electrical grid by taking the energy from the grid during non-peak
hours when energy is cheaper and storing the energy for use during
higher cost peak hours. Thus, electrical energy storage can be a
critical part of electric vehicle recharging infrastructure. Further,
treating all types of storage as a separate item of property is
consistent with the language of former section 179A(d). Finally,
allowing electrical energy storage property as a separate item of
property treats storage property consistently across various types of
clean-burning fuel.
These proposed regulations would also modify proposed Sec. Sec.
1.48-9 and 1.48E-2 to provide that energy storage technology does not
include energy storage property for which the taxpayer claims a credit
under section 30C. Energy storage technology may be eligible for an
investment credit under sections 48 and 48E, subject to certain
limitations. However, sections 48 and 48E exclude from the definition
of energy storage technology property primarily used in the
transportation of goods or individuals and not for the production of
electricity. See sections 48(c)(6)(A) and 48E(c)(2). The section 48
proposed regulations did not propose a rule interpreting this exclusion
but requested comments on its scope.\2\ Commenters to the section 48
proposed regulations requested that batteries and other energy storage
technology that may be used to charge or recharge electric vehicles be
eligible for the section 48 credit because it may be more valuable than
the section 30C credit in certain cases; however, commenters did not
request that the same property be eligible for both sections 48 and
30C. The Treasury Department and the IRS agree that Congress did not
intend to allow multiple credits for investments in the same energy
storage property associated with vehicle recharging or refueling, as
evidenced by the sections 48 and 48E exclusion for property primarily
used in the transportation of goods or individuals and not for the
production of electricity. Property for which a section 30C credit is
claimed is property primarily used in the transportation of goods or
individuals and not for the production of electricity, because the
section 30C credit is limited to property ``for the storage or
dispensing of a clean-burning fuel into the fuel tank of a motor
vehicle propelled by such fuel'' or ``for the recharging of motor
vehicles propelled by electricity.'' See sections 30C(c)(1) and
179A(d)(3). Accordingly, the proposed regulations would clarify that
energy storage property for which a section 30C credit is claimed is
property primarily used in the transportation of goods or individuals
and not for the production of electricity, and, therefore, is not
energy storage technology for purposes of sections 48 and 48E. However,
energy storage property for which a section 30C credit is not claimed,
could be credit-eligible energy storage technology under sections 48
and 48E if it meets the requirements under those provisions.
---------------------------------------------------------------------------
\2\ On November 22, 2023, the Treasury Department and the IRS
published in the Federal Register (88 FR 82188) the proposed rule
``Definition of Energy Property and Rules Applicable to the Energy
Credit'' under section 48 (section 48 proposed regulations).
---------------------------------------------------------------------------
2. Associated Property and Calculating the Credit
Under proposed Sec. 1.30C-2(b)(1), the amount of the section 30C
credit would include the cost of functionally interdependent property
and, if applicable, any property that is an integral part of refueling
or recharging property that is part of the 30C property placed in
service by the taxpayer during the year (associated property). These
costs would be included in the section 30C credit for a single item to
the extent that they are directly attributable and traceable to that
particular single item of 30C property. The cost of associated property
that is directly attributable and traceable to more than one item of
30C property would be allocated among the relevant items based on the
cost of each single item of 30C property. In no case would the total
cost of the associated property divided among different items of 30C
property exceed 100 percent of the cost of the associated property.
Proposed Sec. 1.30C-2(b)(3) would provide that the section 30C
credit is the lesser of the ``tentative section 30C credit,'' or the
$100,000 or $1,000 limit (as appropriate). The tentative section 30C
credit for each single item of 30C property would be the sum of the
cost of the single item of 30C property, the cost of any associated
property directly attributable and traceable to the single item of 30C
property, and the cost of a ratable share of allocated associated
property, multiplied by the applicable credit rate (6 percent or 30
percent).
C. Bidirectional Charging Equipment
Notice 2022-56 requested comments on the factors and definitions
that should be considered in developing guidance for bidirectional
charging equipment (that is, property that is capable of charging the
battery of an electric vehicle and also allows the discharging of
electricity from such battery to an electric load external to such
motor vehicle). See section 30C(c)(2). Many of the comments suggested
that the regulations provide that all costs, including any costs for
bidirectional equipment contained within the motor vehicle (onboard
equipment) be creditable.
[[Page 76765]]
The IRA amendments clarify that a charger that otherwise meets the
requirements of 30C property is not excluded simply because the charger
also allows discharging of electricity from the motor vehicle's
battery, but the IRA amendments do not expand the section 30C credit in
the manner suggested by commenters. In particular, section 30C(c)(2)
uses the language ``shall not fail to be treated,'' suggesting a
clarification rather than a significant expansion of the credit. In
addition, the Code contains separate tax credits for electric vehicles,
including credits targeted to the electric vehicle battery. See
sections 25E, 30D, and 45W. Thus, proposed Sec. 1.30C-1(b)(16)(ii)
would exclude from the definition of recharging property components
that are located within a motor vehicle and are necessary for the
propulsion of that vehicle, including onboard equipment.
D. Property for the Refueling of Certain Two- and Three-Wheeled
Vehicles
Section 30C(f) provides additional special rules for electric
charging stations for certain vehicles with two or three wheels.
Section 30C(f)(1) provides that the term ``qualified alternative fuel
vehicle refueling property'' includes property described in section
30C(c) for the recharging of a motor vehicle described in section
30C(f)(2), but only if such property meets the requirements of section
30C(a)(2) and is of a character subject to depreciation. However,
section 30C(a)(2) does not exist. The Treasury Department and the IRS
view this as a clerical error and, as a result, will apply section
30C(f)(1) without giving effect to section 30C(f)(1)(A). Thus, proposed
Sec. 1.30C-2(b)(5) would provide that 30C property also includes
depreciable property that is for the recharging of a two- or three-
wheeled electric vehicle because there are no requirements of section
30C(a)(2) under current law.
E. Eligible Census Tracts
Consistent with section 30C(c)(3)(B), proposed Sec. 1.30C-2(c)(1)
would provide that 30C property must be placed in service in an
eligible census tract to qualify for the section 30C credit. Eligible
census tracts include any population census tract that qualifies as a
low-income community census tract or that is a non-urban census tract.
1. Low-Income Census Tracts
Proposed Sec. 1.30C-2(c)(2)(i) would provide that a population
census tract is an eligible ``low-income community census tract'' for
purposes of the section 30C credit if the population census tract meets
the requirements of the NMTC under section 45D(e)(1), which requires
that the poverty rate for such tract is at least 20 percent, or in the
case of a tract not located within a metropolitan area, the median
family income for such tract does not exceed 80 percent of statewide
median family income, or in the case of a tract located within a
metropolitan area, the median family income for such tract does not
exceed 80 percent of the greater of statewide median family income or
the metropolitan area median family income. Proposed Sec. 1.30C-
2(c)(2)(ii) would provide that census tracts located within a high
migration rural county, as defined under section 45D(e)(5), are low-
income community census tracts if the median family income for the
tract does not exceed 85 percent of statewide median family income.
Based on the ACS 5-year low-income community data, census tracts as
described under section 45D(e)(1) can be identified and they are
published by the CDFI Fund. Additionally, the CDFI Fund has published,
beginning with the 2016-2020 NMTC tracts, the census tracts that
qualify as low-income census tracts because the census tracts are
located in high migration rural counties as described under section
45D(e)(5). However, after consultation with the CDFI Fund, the Treasury
Department and the IRS cannot identify with verifiable accuracy the
population census tracts that currently meet the requirements of
section 45D(e)(2) and (4). Accordingly, the Treasury Department and the
IRS request comments on whether and how the population census tracts
named under section 45D(e)(2) and (4) could be identified accurately to
qualify as eligible census tracts for the credit under 30C. The areas
described in section 45D(e)(3) are not population census tracts as
required by section 30C(c)(3)(B)(i), and therefore do not qualify as
eligible census tracts for purposes of the section 30C credit.
2. Non-Urban Area
Proposed Sec. 1.30C-2(c)(3) would provide that ``non-urban census
tract'' means any population census tract in which at least 10 percent
of the census blocks are not designated as urban areas. As the
Secretary of Commerce and Census Bureau no longer identify census
tracts as urban or non-urban, the Treasury Department, in consultation
with the Census Bureau, determined a percentage of census blocks within
a census tract to determine if a census tract is not an urban area
under section 30C(c)(3)(B)(ii). The Treasury Department and IRS
received comments on this issue in response to Notice 2022-56. The
threshold of 10 percent of census blocks being not an urban area to
determine if a census tract is a non-urban area census tract is within
the range of percentages suggested by commenters.
3. Determination of Eligible Census Tracts
Proposed Sec. 1.30C-2(c)(4) would provide that the IRS will
periodically publish lists of specific census tracts that are low-
income census tracts or non-urban census tracts along with instructions
on how taxpayers may determine their census tract identifying numbers.
Census tract data and boundaries are expected to be updated prior to
January 1, 2033, when the section 30C credit is planned to expire. When
census tract data changes, the IRS will publish updated lists of the
eligible census tracts that qualify as low-income communities or non-
urban areas, and the 11-digit census tract GEOIDs associated with each
census tract based on the applicable census data.
4. Request for Comments
There is a variety of equipment available to recharge electric
vehicles. Some are installed at a fixed location (that is, stationary)
and may be mounted upon concrete pads or installed as fixtures on the
walls of buildings. Some recharging equipment are mobile; however, the
degree to which such equipment are mobile varies greatly depending on
their use and purpose. Mobile chargers may be transported to allow for
the dispensing of electricity closer to where a vehicle is parked, in
contrast to having to drive a vehicle to stationary equipment. Mobile
chargers may be physically connected to a source of electricity at a
physical address or, conversely, receive electricity from a battery
that is temporarily separated from a physical address.
The requirement under section 30C(c)(3) that property must be
placed in service in an eligible census tract to qualify for the
section 30C credit suggests that the property must also be used in the
eligible census tract. However, depending on its design and purpose,
mobile equipment may not always be used in the eligible census tract in
which it was placed in service. The Treasury Department and the IRS
request comments on how mobile equipment could satisfy the geographic
requirement that 30C property must be placed in service in an eligible
census tract, and request comments on any related rules that should be
adopted, particularly with respect to any administrative requirements
to ensure
[[Page 76766]]
only qualifying mobile equipment is credited.
III. Prevailing Wage and Registered Apprenticeship Requirements
The proposed regulations would supplement the final PWA regulations
in Sec. 1.30C-3 to further define ``qualified alternative fuel vehicle
refueling project'' (30C project) for purposes of satisfying the PWA
requirements. Proposed Sec. 1.30C-3(b)(2) would provide that multiple
30C properties will be treated as a single 30C project if the items of
property are constructed and operated on a contiguous piece of land,
owned by a single taxpayer (subject to the related party rule), placed
in service in a single taxable year, and one or more of the following
factors is present: (1) the properties are described in one or more
common environmental or other regulatory permits; (2) the properties
are constructed pursuant to a single master construction contract; or
(3) the construction of the properties is financed pursuant to the same
loan agreement. Under the related party rule in proposed Sec. 1.30C-
3(b)(3), related taxpayers are treated as one taxpayer in determining
whether multiple items of 30C property are treated as a single project.
For these purposes, related taxpayers are treated as a single taxpayer
if they are members of a group of trades or businesses that are under
common control (as defined in Sec. 1.52-1(b)). Proposed Sec. 1.30C-
3(b)(3).
The proposed regulations would limit a 30C project to encompass
only the items of property that are placed in service within the same
year because 30C is an annual credit. This approach is consistent with
the fact that the section 30C credit is available only in the year the
property is placed in service, even if costs related to the property
are incurred in earlier years.
Additionally, the proposed regulations would clarify that if a
seller of 30C property, the use of which is described in section
50(b)(3) or (4) (generally tax-exempt entities, government entities,
and foreign persons and entities), is treated as the taxpayer that
placed such property in service under section 30C(e)(2), the seller is
the taxpayer required to comply with the PWA recordkeeping
requirements. Proposed Sec. 1.30C-3(c). See part IV.B of this
Explanation of Provisions for additional discussion of cases in which a
seller may be treated as the taxpayer that placed 30C property in
service under section 30C(e)(2). This clarification is consistent with
Sec. 1.45-12, which provides that a taxpayer claiming or transferring
(under section 6418) an increased credit must maintain and preserve
records sufficient to establish compliance with the statutory
requirements. Further, unlike a transferee under section 6418, a person
who sells 30C property, the use of which is described in section
50(b)(3) or (4), would generally have access to, and control over, the
relevant records.
The proposed regulations would also conform the terminology used in
the final PWA regulations in Sec. 1.30C-3(a) and (b) to the
terminology used in these proposed regulations. The proposed
regulations do not modify any of the rules in the final PWA regulations
other than proposed Sec. 1.30C-3, and the Treasury Department and the
IRS are not reopening the comment period on the final PWA regulations
generally.
IV. Special Rules
A. Recapture
Section 30C(e)(5) provides that recapture rules similar to the
rules of former section 179A(e)(4) apply; however, former section
179A(e)(4) merely granted authority to provide recapture rules,
stating, ``The Secretary shall, by regulations, provide for recapturing
the benefit of any deduction allowable under subsection (a) with
respect to any property which ceases to be property eligible for such
deduction.'' Accordingly, as noted previously in the Authority section,
the Treasury Department and the IRS understand section 30C(e)(5) to be
a delegation of authority to the Secretary, by cross-reference to
former section 179A(e)(4), to provide recapture rules under section
30C.
The Secretary exercised the authority under former section
179A(e)(4) in issuing former Sec. 1.179A-1 (removed by TD 9849 on
March 11, 2019). Proposed Sec. 1.30C-4(b) uses the rules of former
Sec. 1.179A-1 as a starting point (in particular, what constitutes a
recapture event), with appropriate modifications (for example, to
account for apportioned use property and property used by tax-exempt or
government entities, neither of which were at issue in former section
179A or the regulations thereunder). In general, proposed Sec. 1.30C-
4(b) would require taxpayers to recapture the benefit of any section
30C credit allowed with respect to any property that ceases to be
property eligible for such credit. If a recapture event occurs with
respect to a taxpayer's 30C property, then the taxpayer must include
the recapture amount in taxable income for the taxable year in which
the recapture event occurs. Proposed Sec. 1.30C-4(b)(1).
Proposed Sec. 1.30C-4(b)(2) would provide that a recapture event
generally occurs if, within three years of the property being placed in
service: (1) the taxpayer claiming the section 30C credit modifies the
property such that the property no longer qualifies as 30C property;
(2) unless the property is subject to section 6417(d)(2)(B), a
depreciable property ceases to be used predominantly in a trade or
business (meaning that 50 percent or more of the use of the property in
a taxable year is for use other than in a trade or business); (3) if
the property is apportioned-use property, the property completely
ceases to be used in a trade or business, but continues to be used for
personal use; or (4) the taxpayer sells or disposes of the 30C property
and the taxpayer knows or has reason to know that the property will
cease to qualify as 30C property for one of the reasons listed in (1)
or (2) of this paragraph. Except as provided in (4), a sale or other
disposition (including a disposition by reason of an accident or other
casualty) of 30C property is not a recapture event. Proposed Sec.
1.30C-4(b)(3) would clarify that property is not subject to the
recapture provisions solely because it is placed in service in a
location that subsequently ceases to be in a qualified census tract.
Thus, a change in the identification of eligible census tracts alone
would not require a taxpayer to recapture the section 30C credit.
Proposed Sec. 1.30C-4(b) would also provide a formula for
determining the amount of the recapture and adjustments to basis
following a recapture event.
The Treasury Department and the IRS request comments on how the
recapture rules should apply where the person who sells 30C property to
a tax-exempt or government entity is treated as the taxpayer placing
the 30C property in service, including any notifications that should be
required.
B. Property Used by a Tax-Exempt or Government Entity
Section 30C(e)(2) allows a person who sells 30C property that is
used in a manner described in section 50(b)(3) or (4) (generally
property used by tax-exempt organizations, government entities, or
foreign persons or entities), to be eligible for the section 30C
credit, but only if the seller clearly discloses in a document the
amount of any such credit allowable. Use of this rule typically results
in a lower upfront cost to a tax-exempt or government entity for the
30C property, while allowing the seller to claim the section 30C
credit.
Section 6417, added by the IRA, provides a benefit to applicable
entities (defined in section 6417(d)(1)(A) and Sec. 1.6417-1(c)),
which include certain
[[Page 76767]]
tax-exempt and government entities that are described in section
50(b)(3) or (4). Section 6417 allows applicable entities to make an
election to be treated as making a payment of tax in the amount of
certain applicable credits, including the section 30C credit, which
results in a refund equal to the amount of the applicable credits if
such entity has no other tax liability. Section 6417(d)(2)(A) requires
an entity making an election to determine an applicable credit without
regard to section 50(b)(3) or (b)(4)(A)(i), effectively turning those
sections off for purposes of calculating an applicable credit. Although
section 30C refers to section 50(b)(3) and (4) in section 30C(e)(2) to
describe property used in a certain manner by certain persons, the
section 30C credit is always determined without regard to section
50.\3\ However, for 30C property used by tax-exempt and government
entities (that is, property the use of which is described in section
50(b)(3) or (4)), these proposed regulations would treat such 30C
property as not being used in a manner described in section 50(b)(3) or
(4) if the tax-exempt or government entity makes an elective payment
election under section 6417.
---------------------------------------------------------------------------
\3\ Section 50(b) provides that no credit ``shall be determined
under this subpart'' for certain property. Section 50(b) is in
subpart E of part IV of subchapter A of chapter 1. Section 30C is in
subpart B of part IV of subchapter A of chapter 1.
---------------------------------------------------------------------------
Congress appears to have provided tax-exempt and government
entities the ability to choose whether a reduced purchase price that
may result under section 30C(e)(2) or an elective payment election
under section 6417 is more beneficial. To facilitate that choice, and
consistent with section 6417(d)(2)(A), proposed Sec. 1.30C-4(c)(2)
would treat the use of 30C property by a tax-exempt or government
entity as not being described in section 50(b)(3) or (4), and therefore
not available for the seller to be treated as the taxpayer placing the
30C property in service, if such entity notifies the seller in writing
of its intent to make the section 6417 election.
The section 30C credit is only allowed once per 30C property. Thus,
if the tax-exempt or government entity notifies the seller of its
intent to make an elective payment election pursuant to section 6417(a)
with respect to the section 30C credit, the seller cannot claim any
credit allowable under section 30C(a) with respect to such property.
The Treasury Department and the IRS request comments on whether
this approach is practical for entities described in section 50(b)(3)
and (b)(4)(A)(i) and for those who sell them 30C property. The Treasury
Department and the IRS also request comments on the notification
process described above, including the timing of such notifications and
whether transition rules may be necessary for projects for which
contracts have already been signed.
C. Dual-Use Property
Notice 2007-43 provided rules for the application of the section
30C credit to dual-use property, generally meaning property that is
used for a creditable purpose and a non-creditable purpose. The
proposed regulations would generally incorporate the dual-use rules
from the notice, with some modifications to account for subsequent
amendments to section 30C (such as the inclusion of transportation fuel
as defined in section 45Z(d)(5)).
Proposed Sec. 1.30C-4(d) would provide separate rules for (1)
dual-use property that is used for dispensing or storing both qualified
alternative fuel and conventional fuel, (2) dual-use property that is
used to store qualified alternative fuel that is dispensed into the
fuel tank of a motor vehicle and to store fuel that is transported to
other locations, and (3) dual-use property that is used to store or
transmit electricity for recharging a motor vehicle and for other, non-
creditable, purposes. In each case, the creditable portion of the cost
of such property is limited to the increase in the cost of the dual-use
property over the cost of equivalent property used only for the non-
creditable use. For example, if a taxpayer owns a fuel tank that is
used to store fuel that is used to refuel motor vehicles at the point
where the motor vehicles are refueled, but is also used to store fuel
that the taxpayer transports to other locations, then the cost of the
fuel tank is taken into account only to the extent the cost exceeds the
cost of a tank used only to store fuel transported to other locations.
The Treasury Department and the IRS are aware that in some cases, this
will result in the dual-use property's cost not being creditable under
section 30C. However, the Treasury Department and the IRS are of the
view that Notice 2007-43 has provided a workable and administrable rule
for most of the existence of the section 30C credit to date.
V. Proposed Amendments to Regulations Under Other Code Sections
The proposed regulations would also make minor conforming changes
to proposed Sec. Sec. 1.48-9 and 1.48E-2, as well as to Sec. Sec.
1.6417-6 and 1.6418-5 to comport with the proposed section 30C
regulations.
Effect on Other Documents
Notice 2007-43, 2007-22 I.R.B. 1318, is withdrawn.
Proposed Applicability Dates
Except as otherwise provided, these regulations are proposed to
apply to property placed in service in taxable years ending after the
date of publication of the Treasury Decision adopting these rules as
final rules in the Federal Register.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of Agreement, Review of Treasury
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject to the requirements of
section 6 of Executive Order 12866, as amended. Therefore, a regulatory
impact assessment is not required.
II. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA)
generally requires that a Federal agency obtain the approval of the
Office of Management and Budget (OMB) before collecting information
from the public, whether such collection of information is mandatory,
voluntary, or required to obtain or retain a benefit. A Federal agency
may not conduct or sponsor, and a person is not required to respond to,
a collection of information unless it displays a valid control number
assigned by the OMB.
The collections of information in these proposed regulations
contain reporting and recordkeeping requirements. The recordkeeping
requirements mentioned within these proposed regulations are considered
general tax records under Sec. 1.6001-1(e). These records are required
for the IRS to validate that taxpayers have met the regulatory
requirements and are entitled to a credit under section 30C. For PRA
purposes, general tax records are already approved by OMB under 1545-
0047 for tax-exempt organizations and government entities; 1545-0074
for individuals; and under 1545-0123 for business entities.
These proposed regulations mention requirements to claim the credit
in Sec. 1.30C-2(e), using Form 8911, Alternative Fuel Vehicle
Refueling Property Credit (or successor form as the Secretary
prescribes). This form is approved under 1545-0047 for tax-exempt
organizations and governmental entities; 1545-0074 for individuals; and
1545-0123 for business entities. These proposed regulations are not
changing
[[Page 76768]]
or creating new collection requirements not already approved by OMB.
These proposed regulations also mention recapture procedures as
detailed in Sec. 1.30C-4(b). These recapture procedures are also
performed using Form 8911, Alternative Fuel Vehicle Refueling Property
Credit (or successor form as the Secretary prescribes). This form is
approved under 1545-0047 for tax-exempt organizations and governmental
entities; 1545-0074 for individuals; and 1545-0123 for business
entities. These proposed regulations are not changing or creating new
collection requirements not already approved by OMB.
These proposed regulations also include third-party disclosures if
a tax-exempt or government entity makes an election under section 6417
to be treated as making a payment against the tax. This third-party
disclosure and its associated burden will be included in form and
instructions for Form 8911 (or successor form as the Secretary
prescribes) and will be submitted to OMB under 1545-0047, 1545-0074,
and 1545-0123 in accordance with the PRA procedures under 5 CFR
1320.10.
With respect to the PWA provisions in Sec. 1.30C-3, these
requirements are approved under 1545-2315. With respect to the elective
pay provisions in Sec. 1.30C-4(c)(2), there is no form associated with
this collection, but will be collected in the portal only and is
approved under 1545-2310. These proposed regulations are not changing
or creating new collection requirements not already approved by OMB.
III. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes
certain requirements with respect to Federal rules that are subject to
the notice and comment requirements of section 553(b) of the
Administrative Procedure Act (5 U.S.C. 551 et seq.) and that are likely
to have a significant economic impact on a substantial number of small
entities. Unless an agency determines that a proposal is not likely to
have a significant economic impact on a substantial number of small
entities, section 603 of the RFA requires the agency to present an
initial regulatory flexibility analysis (IRFA) of the proposed rule.
Pursuant to the RFA, the Secretary hereby certifies that these
proposed regulations will not have a significant economic impact on a
substantial number of small entities within the meaning of section
601(6) of the Regulatory Flexibility Act. Pursuant to section 7805(f),
this notice of proposed rulemaking has been submitted to the Chief
Counsel for the Office of Advocacy of the Small Business Administration
for comment on their impact on small business.
The RFA directs agencies to provide a description of and, if
feasible, an estimate of, the number of small entities that may be
affected by the proposed rules, if adopted. Section 30C and these
proposed regulations may affect a variety of different entities across
multiple industries, including individuals, tax-exempt entities, small
businesses, partnerships, and large businesses. Although there is
uncertainty as to the exact number of small businesses within this
group, the current estimated number of respondents to these proposed
rules is 4,000 small business entities, based on a review of filing
information since 2019 and extrapolations into the future.
Small business entities to claim the section 30C credit must
satisfy reporting requirements that are the same as those faced by
individuals accessing the section 30C credit. Taxpayers will continue
to file Form 8911, Alternative Fuel Vehicle Refueling Property Credit
(or successor form as the Secretary prescribes), as was the case for
the section 30C credit prior to amendments made by the IRA and prior to
the publication of these proposed regulations. The estimated burden for
individual and business taxpayers filing this form is approved under
OMB control number 1545-0074 and 1545-0123.
Although the Treasury Department and IRS estimate that 4,000 small
business entities will claim the credit under section 30C in a given
year, the proposed regulations will not have a significant economic
impact on such entities. The proposed regulations do not impose any
additional burden on taxpayers outside of what is provided by the
statute. For example, the IRA modified section 30C(c)(3) to require
property to be located in eligible census tracts. These proposed
regulations provide guidance regarding low-income areas, non-urban
areas, and the determination of eligible census tracts, but do not
impose any additional requirements beyond what is set forth in the
statute that would give rise to significant economic impacts on small
business entities. Additionally, these proposed regulations provide
rules regarding recapture of the credit, but recapture is provided for
in section 30C(e)(5), and these proposed rules merely provide the
framework for the statutorily required recapture.
The Treasury Department and IRS have determined that the continued
requirement to file a Form 8911, Alternative Fuel Vehicle Refueling
Property Credit (or successor form as the Secretary prescribes), is
unlikely to involve significant administrative costs beyond what was
previously required.
Accordingly, the Secretary certifies that these proposed
regulations will not have a significant economic impact on a
substantial number of small entities. The Treasury Department and the
IRS request comments that provide data, other evidence, or models that
provide insight on this issue.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that agencies assess anticipated costs and benefits and take certain
other actions before issuing a final rule that includes any Federal
mandate that may result in expenditures in any one year by a State,
local, or Tribal government, in the aggregate, or by the private
sector, of $100 million in 1995 dollars, updated annually for
inflation. This proposed rule does not include any Federal mandate that
may result in expenditures by State, local, or Tribal governments, or
by the private sector in excess of that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism) prohibits an agency (to the
extent practicable and permitted by law) from promulgating any
regulation that has federalism implications, unless the agency meets
the consultation and funding requirements of section 6 of the Executive
order, if the rule either imposes substantial, direct compliance costs
on State and local governments, and is not required by statute, or
preempts State law. This proposed rule does not have federalism
implications and does not impose substantial direct compliance costs on
State and local governments or preempt State law within the meaning of
the Executive order.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any comments that are submitted timely
to the IRS as prescribed in this preamble under the ADDRESSES heading.
The Treasury Department and the IRS request comments on all aspects
of the proposed regulations. Any comments submitted will be made
available at <a href="https://www.regulations.gov">https://www.regulations.gov</a> or upon request.
A public hearing will be scheduled if requested in writing by any
person who timely submits electronic or written
[[Page 76769]]
comments. Requests for a public hearing are also encouraged to be made
electronically. If a public hearing is scheduled, notice of the date
and time for the public hearing will be published in the Federal
Register.
Statement of Availability of IRS Documents
The IRS Revenue Procedures, Notices, and other guidance cited in
this preamble are published in the Internal Revenue Bulletin and is
available from the Superintendent of Documents, U.S. Government
Publishing Office, Washington, DC 20402, or by visiting the IRS website
at <a href="https://www.irs.gov">https://www.irs.gov</a>.
Drafting Information
The principal author of the proposed regulations is the Office of
Associate Chief Counsel (Passthroughs & Special Industries). However,
other personnel from the Treasury Department and the IRS participated
in the development of the proposed regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, the Treasury Department and the IRS propose to amend
26 CFR part 1 as follows:
PART 1--Income Taxes
0
Paragraph 1. The authority citation for part 1 is amended by:
0
1. Adding entries for Sec. Sec. 1.30C-1 and 1.30C-2 in numerical
order;
0
2. Revising the entry for Sec. 1.30C-3; and
0
3. Adding entries for Sec. Sec. 1.30C-4, 1.48-9(e)(10), and 1.48E-
2(g)(6) in numerical order.
The additions and revisions read in part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Section 1.30C-1 also issued under 26 U.S.C. 30C(h).
Section 1.30C-2 also issued under 26 U.S.C. 30C(h).
Section 1.30C-3 also issued under 26 U.S.C. 30C(g)(4) and (h).
Section 1.30C-4 also issued under 26 U.S.C. 30C(e)(5) and (h).
* * * * *
Section 1.48-9(e)(10) also issued under 26 U.S.C. 48(a)(16).
* * * * *
Section 1.48E-2(g)(6) also issued under 26 U.S.C. 48E(i).
* * * * *
0
Par. 2. Sections 1.30C-0 through 1.30C-2 are added to read as follows:
* * * * *
1.30C-0 Table of contents.
1.30C-1 Credit for alternative fuel vehicle refueling property;
Definitions.
1.30C-2 General rules.
* * * * *
Sec. 1.30C-0 Table of contents.
This section lists the captions contained in Sec. Sec. 1.30C-1
through 1.30C-4.
Sec. 1.30C-1 Credit for alternative fuel vehicle refueling
property; Definitions.
(a) In general.
(b) Definitions.
(1) 30C property.
(i) Applicable property.
(ii) Property integral to refueling property or recharging
property.
(iii) Other requirements.
(2) 45Z transportation fuel.
(3) Building and structural components.
(4) Census block.
(5) Charger.
(6) Charging port.
(7) Clean burning fuel.
(8) Connector.
(9) Conventional fuel.
(10) Conventional refueling property.
(11) Electric vehicle.
(12) Fuel dispenser.
(13) Fuel tank.
(14) Functionally interdependent.
(15) Integral part.
(16) Located at the point.
(i) Refueling property.
(ii) Recharging property.
(17) Motor vehicle.
(i) In general.
(ii) 2 or 3-wheeled motor vehicle.
(18) Original use.
(19) Population census tract.
(20) Qualified alternative fuel.
(21) Qualifying biodiesel mixture.
(22) Section 30C credit.
(23) Section 30C regulations.
(24) Statutory references.
(i) Chapter 1.
(ii) Code.
(25) Storage property.
(i) In general.
(ii) Qualified alternative fuel storage property.
(iii) Electrical energy storage property.
(c) Applicability date.
Sec. 1.30C-2 General rules.
(a) Amount of credit.
(1) In general.
(2) Applicable percentages.
(i) Property of a character subject to an allowance for
depreciation.
(ii) Projects meeting the prevailing wage and apprenticeship
requirements.
(iii) Property not subject to an allowance for depreciation.
(3) Apportionment of section 30C credit between business and
personal use.
(i) Business use portion.
(ii) Personal use portion.
(4) Dollar-amount limitations.
(i) In general.
(ii) Apportioned-use property.
(b) 30C property rules.
(1) Single item of 30C property.
(2) Associated property.
(3) Calculating the section 30C credit.
(4) Special rule for bidirectional charging equipment.
(5) Property for the refueling of certain two- and three-wheeled
motor vehicles.
(6) Placed in service.
(i) Depreciable property.
(ii) Non-depreciable property.
(c) Eligible census tracts.
(1) Geographic requirement.
(2) Low-income community census tract.
(i) In general.
(ii) Modification for high migration rural counties.
(3) Non-urban census tract.
(4) Determination of eligibility of specific census tracts.
(d) Reduction in basis.
(e) Examples.
(1) Example 1.
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(2) Example 2.
(i) Facts.
(ii) Analysis.
(3) Example 3.
(i) Facts.
(ii) Analysis.
(4) Example 4.
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(5) Example 5.
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(6) Example 6.
(i) Facts.
(ii) Analysis.
(7) Example 7.
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(8) Example 8.
(i) Facts.
(ii) Analysis.
(9) Example 9.
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(10) Example 10.
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(11) Example 11.
(i) Facts.
(ii) Analysis.
(12) Example 12.
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(13) Example 13.
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(14) Example 14.
[[Page 76770]]
(i) Facts.
(ii) Analysis.
(A) 30C property.
(B) Calculation of the credit.
(15) Example 15.
(i) Facts.
(ii) Analysis.
(f) Claim requirements.
(g) Applicability date.
Sec. 1.30C-3 Rules relating to the increased credit amount for
prevailing wage and apprenticeship.
(a) In general.
(b) 30C project requirements.
(1) In general.
(2) Determination of a project.
(3) Related taxpayers.
(i) Definition.
(ii) Related taxpayer rule.
(c) Coordination with 30C(e)(2) and Sec. 1.30C-4(c).
(d) Examples.
(1) Example 1.
(i) Facts.
(ii) Analysis.
(2) Example 2.
(i) Facts.
(ii) Analysis.
(e) Applicability date.
Sec. 1.30C-4 Special rules.
(a) No credit allowable in certain circumstance.
(1) Property used outside the United States.
(2) Property placed in service in a United States territory.
(3) Section 179.
(b) Recapture.
(1) In general.
(2) Recapture event.
(3) Property placed in service in a location that ceases to be
in a qualified census tract.
(4) Recapture amount.
(i) In general.
(ii) Special rule for apportioned-use property.
(5) Basis adjustment.
(c) Property used by a tax-exempt or governmental entity.
(1) In general.
(2) Interaction with section 6417.
(d) Dual-use property.
(1) Dual use property used for dispensing or storing qualified
alternative fuel and conventional fuel.
(2) Qualified alternative fuel storage.
(3) Dual use property used to store or transmit electricity for
charging a motor vehicle and for other purposes.
(4) Example.
(i) Facts.
(ii) Analysis.
(e) Applicability date.
Sec. 1.30C-1 Credit for alternative fuel vehicle refueling property;
Definitions.
(a) In general. The section 30C regulations (as defined in
paragraph (b)(23) of this section) apply for purposes of determining
the availability and amount of any credit that is allowed to a taxpayer
by section 30C(a) of the Code (as defined in paragraph (b)(24)(ii) of
this section) with respect to any 30C property (as defined in paragraph
(b)(1) of this section) placed in service by the taxpayer during the
taxable year. Paragraph (b) of this section provides definitions of
terms for purposes of applying section 30C and the section 30C
regulations. See Sec. 1.30C-2 for general rules for determining the
amount of the allowed section 30C credit. See Sec. 1.30C-3 for rules
relating to the increased section 30C credit amount for satisfying
prevailing wage and apprenticeship requirements. See Sec. 1.30C-4 for
special rules.
(b) Definitions. The definitions in this section apply for purposes
of section 30C and the section 30C regulations.
(1) 30C property. 30C property is any applicable property described
in paragraph (b)(1)(i) or (ii) of this section that also meets the
requirements of paragraph (b)(1)(iii) of this section.
(i) Applicable property. Applicable property is any property (other
than real property and a building and its structural components) that
is comprised of components that are functionally interdependent--
(A) For the storage or dispensing of a qualified alternative fuel
into the fuel tank of a motor vehicle propelled by such fuel, but only
if the storage or dispensing of the fuel is located at the point where
such fuel is delivered into the fuel tank of the motor vehicle
(refueling property); or
(B) For the recharging of motor vehicles propelled by electricity,
but only if the property is located at the point where the motor
vehicles are recharged (recharging property).
(ii) Property integral to refueling property or recharging
property. If applicable, the term applicable property also includes
property the purpose of which is described in paragraph (b)(1)(i)(A) or
(B) of this section that is an integral part of refueling property or
recharging property.
(iii) Other requirements. To be 30C property, any applicable
property must also meet the following requirements--
(A) The property is of a character subject to an allowance for
depreciation, or installed on property that is used as the principal
residence of the taxpayer (within the meaning of section 121 of the
Code);
(B) The original use of the property begins with the taxpayer; and
(C) The property is placed in service (as defined in Sec. 1.30C-
2(b)(6)) in an eligible census tract as described in Sec. 1.30C-2(c).
(2) 45Z transportation fuel. 45Z transportation fuel means any
transportation fuel (as defined in section 45Z(d)(5) of the Code)
produced after December 31, 2024.
(3) Building and structural components. Building and structural
components has the same meaning as in Sec. 1.48-1(e).
(4) Census block. Census block means the smallest geographic area
for which the Census Bureau collects and tabulates decennial census
data.
(5) Charger. Charger means a device with one or more charging ports
and connectors for charging electric vehicles.
(6) Charging port. Charging port means the system within a charger
that charges one motor vehicle. A charging port may have multiple
connectors, but it can provide power at the port's rated electrical
output to charge only one motor vehicle through one connector at a
time.
(7) Clean burning fuel. Clean burning fuel means--
(i) Any qualified alternative fuel; or
(ii) Electricity.
(8) Connector. Connector means the device that attaches an electric
vehicle to a charging port to transfer electricity.
(9) Conventional fuel. Conventional fuel means any fuel that is not
a clean burning fuel. Conventional fuel includes diesel fuel that is
not in a qualifying biodiesel mixture and gasoline.
(10) Conventional refueling property. Conventional refueling
property means property that is used to dispense or store only
conventional fuel.
(11) Electric vehicle. Electric vehicle means a motor vehicle that
is either partially or fully powered by electric power received from an
external power source.
(12) Fuel dispenser. Fuel dispenser means, in the case of refueling
property, the unit through which fuel is dispensed into the fuel tank
of a motor vehicle, if such unit is capable of fueling at or above the
dispenser's minimum rate of fueling and has at least one hose and
nozzle, and optionally a meter, valve, controller, and enclosure.
(13) Fuel tank. Fuel tank means, in the case of a motor vehicle
propelled by qualified alternative fuel, the tank that supplies fuel to
the propulsion engine of the motor vehicle or, in the case of a fuel
cell electric vehicle, the tank that supplies fuel to the fuel cell of
the motor vehicle.
(14) Functionally interdependent. Components are functionally
interdependent if the placing in service of each component is dependent
upon the placing in service of each of the other components in order to
refuel or recharge a motor vehicle.
(15) Integral part. Property is an integral part of a refueling or
recharging property if it is used directly in the intended function of
the refueling
[[Page 76771]]
property or recharging property and is essential to the completeness of
the intended function, meets all of the requirements for 30C property
described in paragraph (b)(1)(iii) of this section, is owned by the
taxpayer that owns the refueling property or recharging property, and
is specifically designed to be integrated with the refueling property
or recharging property with which it is associated.
(16) Located at the point--(i) Refueling property. For purposes of
determining whether property is considered refueling property, and
therefore 30C property, located at the point means the point where fuel
is delivered into the fuel tank of the motor vehicle. Property will be
considered located at the point where fuel is delivered into the fuel
tank of the motor vehicle if such property is located at the same or
immediately adjacent physical address as such fuel delivery point.
(ii) Recharging property. For purposes of determining whether
property is considered recharging property, and therefore 30C property,
located at the point means the point where the motor vehicles are
recharged. Property will be considered located at the point where the
motor vehicles are recharged if it is located at the same or
immediately adjacent physical address as such recharging point.
Property that is a component of a motor vehicle and is necessary for
the propulsion of that vehicle is considered part of the vehicle rather
than recharging property and is therefore not 30C property.
(17) Motor vehicle--(i) In general. Motor vehicle means any vehicle
that has at least 4 wheels and is manufactured primarily for use on
public streets, roads, and highways (not including a vehicle operated
exclusively on a rail or rails).
(ii) 2- or 3-wheeled motor vehicle. For purposes of Sec. 1.30C-
2(c)(5), motor vehicle also includes any vehicle that has 2 or 3
wheels, is manufactured primarily for use on public streets, roads, or
highways (not including a vehicle operated exclusively on a rail or
rails), and is propelled by electricity.
(18) Original use. Original use has the same meaning as in Sec.
1.48-2(b)(7).
(19) Population census tract. Population census tract means the
small-area geographic divisions of a county or statistically equivalent
entity defined for the tabulation and presentation of data from the
decennial census and selected other statistical programs, as defined by
the U.S. Bureau of the Census (Census Bureau). Population census tracts
are comprised of census blocks. The Census Bureau assigns to each
population census tract a unique 11-digit census tract Geographic
Identifier (GEOID). An 11-digit census tract GEOID is a GEOID (a
numeric identifier associated with a geographic area) defined by the
Census Bureau and comprised of a 2-digit State GEOID, 3-digit county
GEOID, and 6-digit census tract GEOID. The 11-digit census tract GEOID
provides a unique identifier for each population census tract in the
United States, including tracts in the U.S. territories. The 11-digit
census tract GEOIDs may vary for any individual latitude/longitude
point based on different census tract boundary delineation dates over
time.
(20) Qualified alternative fuel. Qualified alternative fuel is a
fuel meeting one of the following conditions--
(i) At least 85 percent of its volume consists of one or more of
the following: ethanol, natural gas, compressed natural gas, liquefied
natural gas, liquefied petroleum gas, or hydrogen;
(ii) It is a qualifying biodiesel mixture; or
(iii) It is 45Z transportation fuel.
(21) Qualifying biodiesel mixture. Qualifying biodiesel mixture
means a mixture of biodiesel (as defined in section 40A(d)(1) of the
Code) and diesel fuel (as defined in section 4083(a)(3) of the Code) if
such mixture contains at least 20 percent biodiesel. For this purpose,
any kerosene in a mixture--
(i) Is disregarded in determining whether the mixture is a mixture
of biodiesel and diesel fuel; and
(ii) Is taken into account in determining whether the mixture
contains at least 20 percent biodiesel.
(22) Section 30C credit. The term section 30C credit means the
credit allowed by section 30C(a) to a taxpayer to claim against the tax
imposed by chapter 1 (as defined in paragraph (b)(24)(i) of this
section) of an amount equal to a percentage of the cost of 30C property
placed in service by the taxpayer during the taxable year, subject to
limitations described in section 30C(b) and the section 30C
regulations.
(23) Section 30C regulations. The term section 30C regulations
means this section and Sec. Sec. 1.30C-2 through 1.30C-4.
(24) Statutory references--(i) Chapter 1. The term chapter 1 means
chapter 1 of the Code.
(ii) Code. The term Code means the Internal Revenue Code.
(25) Storage property--(i) In general. Storage property means
qualified alternative fuel storage property and electrical energy
storage property.
(ii) Qualified alternative fuel storage property. Qualified
alternative fuel storage property means property used for the storage
of qualified alternative fuel, but only if such storage property is
located at the point where the motor vehicles are refueled. For
example, in the case of hydrogen energy storage property, such property
may include but is not limited to a hydrogen compressor and associated
storage tank and an underground storage facility and associated
compressors.
(iii) Electrical energy storage property. Electrical energy storage
property means property that receives, stores, and delivers energy for
conversion to electricity, but only if such storage property is located
at the point where the motor vehicles are recharged. For example,
electrical energy storage property may include but is not limited to
rechargeable electrochemical batteries of all types (such as lithium
ion, vanadium flow, sodium sulfur, and lead-acid).
(c) Applicability date. This section applies to property placed in
service in taxable years ending after [date of publication of final
regulations in the Federal Register].
Sec. 1.30C-2 General rules.
(a) Amount of credit--(1) In general. Section 30C(a) of the Code
allows a taxpayer to claim as a credit against the tax imposed by
chapter 1 an amount equal to a percentage of the cost of 30C property
placed in service by the taxpayer during the taxable year, subject to
certain dollar-amount limitations described in section 30C(b) and
paragraph (a)(4) of this section.
(2) Applicable percentages--(i) Property of a character subject to
an allowance for depreciation. In the case of property of a character
subject to an allowance for depreciation, the section 30C credit is an
amount equal to 6 percent of the cost of any 30C property placed in
service by the taxpayer during the taxable year. For 30C property
placed in service by certain tax-exempt organizations and governmental
units described in section 50(b)(3) and (4) of the Code, see sections
30C(e)(2) and 6417(d)(2) of the Code and Sec. 1.6417-2(c).
(ii) Projects meeting the prevailing wage and apprenticeship (PWA)
requirements. In the case of any 30C project (as described in Sec.
1.30C-3(b)(2)) that satisfies the prevailing wage and registered
apprenticeship requirements of section 30C(g) and Sec. 1.30C-3 (PWA
requirements), the section 30C credit for the cost of any 30C property
in such project placed in service by the taxpayer during the taxable
year is multiplied by 5.
[[Page 76772]]
(iii) Property not subject to an allowance for depreciation. In the
case of property of a character not subject to an allowance for
depreciation, the section 30C credit is an amount equal to 30 percent
of the cost of any 30C property placed in service by the taxpayer
during the taxable year provided that such property is installed on
property that is used as the taxpayer's principal residence (within the
meaning of section 121 of the Code).
(3) Apportionment of section 30C credit between business and
personal use. In the case of depreciable 30C property installed at the
taxpayer's principal residence, the business use of which is more than
50 percent of a taxpayer's total use of the property for the taxable
year in which the property is placed in service, the taxpayer's section
30C credit for that taxable year with respect to that 30C property is
treated as a general business credit under section 30C(d)(1) and
paragraph (a)(2)(i) of this section (and not allowed under section
30C(a) or paragraph (a)(2)(iii) of this section). If the business use
of such 30C property is 50 percent or less of a taxpayer's total use of
the property for the taxable year in which the property is placed in
service (apportioned-use property), the taxpayer's section 30C credit
for that taxable year with respect to that property must be apportioned
as provided in paragraphs (a)(3)(i) and (ii) of this section:
(i) Business use portion. The portion of the section 30C credit
corresponding to the percentage of the taxpayer's business use of the
30C property is treated as a general business credit under section
30C(d)(1) and paragraph (a)(2)(i) of this section (and not allowed
under section 30C(a) or paragraph (a)(2)(iii) of this section).
(ii) Personal use portion. The portion of the section 30C credit
corresponding to the percentage of the taxpayer's personal use of the
30C property is treated as a section 30C credit allowed under section
30C(a) pursuant to section 30C(d)(2) and paragraph (a)(2)(iii) of this
section.
(4) Dollar-amount limitations--(i) In general. The section 30C
credit allowed with respect to any single item of 30C property placed
in service by the taxpayer during the taxable year cannot exceed--
(A) $100,000 in the case of any such item of property of a
character subject to an allowance for depreciation; and
(B) $1,000 in any other case.
(ii) Apportioned-use property. In the case of apportioned-use
property described in paragraph (a)(3) of this section, the dollar-
amount limitation must be apportioned in the same manner as the
taxpayer's section 30C credit. For example, in the case of 30C property
the business use of which is 40 percent of a taxpayer's total use of
the property for the taxable year in which the property is placed in
service: the portion treated as a general business credit under section
30C(d)(1) cannot exceed $40,000 ($100,000 multiplied by 40 percent),
and the portion treated as a section 30C credit allowed under section
30C(a) cannot exceed $600 ($1,000 multiplied by 60 percent).
(b) 30C property rules--(1) Single item of 30C property. A taxpayer
may claim the section 30C credit with respect to 30C property if the
taxpayer places in service at least one single item of 30C property as
described in paragraph (b)(6) of this section, any other components
associated with the item that are functionally interdependent, and, if
applicable, any integral part property associated with the item. For
purposes of calculating the section 30C credit, a single item of 30C
property is--
(i) Each charging port for recharging property;
(ii) Each fuel dispenser for refueling property; or
(iii) Each storage property (for this purpose, a storage system
comprised of multiple storage tanks, such as a cascade system, is
treated as a single storage property).
(2) Associated property. If functionally interdependent property
and, if applicable, integral part property that is a part of the 30C
property is placed in service by a taxpayer in a taxable year and is
associated with one or more single items of 30C property (associated
property), then such associated property must be allocated as follows:
(i) If associated property is directly attributable and traceable
to a single item of 30C property, then the cost of such associated
property is allocated to such single item of 30C property.
(ii) If associated property is directly attributable and traceable
to more than one single item of 30C property, then the cost of such
associated property is allocated to such single item of 30C property
based on the cost of each single item of 30C property. The total cost
of such associated property divided among the 30C properties cannot
exceed 100 percent of the cost of such associated property.
(3) Calculating the section 30C credit. The section 30C credit for
each single item of 30C property is the lesser of the tentative section
30C credit for that single item or the dollar-amount limitations in
paragraph (a)(4) of this section for that single item. The tentative
section 30C credit for each single item of 30C property equals:
(i) The applicable percentage; multiplied by
(ii) The sum of--
(A) The cost of the single item of 30C property;
(B) The cost of associated property that is directly attributable
and traceable to the single item of 30C property (as described in
paragraph (b)(2)(i) of this section); and
(C) The cost of the ratable share of associated property (as
described in paragraph (b)(2)(ii) of this section).
(4) Special rule for bidirectional charging equipment. Property
will not fail to be treated as 30C property solely because such
property is capable of charging the battery of a motor vehicle
propelled by electricity and allows discharging electricity from such
battery to an electric load external to such motor vehicle.
(5) Property for the refueling of certain two- and three-wheeled
motor vehicles. 30C property also includes property of a character
subject to an allowance for depreciation that is for the recharging of
a motor vehicle described in Sec. 1.30C-1(b)(17)(ii).
(6) Placed in service--(i) Depreciable property. 30C property that
is depreciable property is considered placed in service in the earlier
of the following taxable years:
(A) The taxable year in which, under the taxpayer's depreciation
practice, the period for depreciation with respect to such property
begins; or
(B) The taxable year in which such property is placed in a
condition or state of readiness and availability for a specifically
assigned function, whether in a trade or business or in the production
of income.
(ii) Non-depreciable property. 30C property that is non-depreciable
property is considered placed in service when it is installed at the
principal residence of the taxpayer and is operational.
(c) Eligible census tracts--(1) Geographic requirement. To qualify
for the section 30C credit, 30C property must be placed in service in
an eligible census tract. Eligible census tracts include any population
census tract that qualifies as a low-income community census tract or
that is a non-urban census tract.
(2) Low-income community census tract--(i) In general. A population
census tract is an eligible low-income community census tract for
purposes of the section 30C credit if the population census tract meets
the requirements of section 45D(e)(1) of the Code (relating to the new
markets tax credit), which
[[Page 76773]]
requires that the poverty rate for such tract is at least 20 percent,
or in the case of a tract not located within a metropolitan area, the
median family income for such tract does not exceed 80 percent of
statewide median family income, or in the case of a tract located
within a metropolitan area, the median family income for such tract
does not exceed 80 percent of the greater of statewide median family
income or the metropolitan area median family income.
(ii) Modification for high migration rural counties. In the case of
a census tract located within a high migration rural county, as defined
under section 45D(e)(5) of the Code, such census tract is a low-income
community if the median family income for such tract does not exceed 85
percent of statewide median family income.
(3) Non-urban census tract. For purposes of the section 30C credit,
a non-urban census tract is any population census tract in which at
least 10 percent of the census blocks are not designated as urban areas
by the Census Bureau.
(4) Determination of eligibility of specific census tracts. The
Internal Revenue Service (IRS) will periodically publish lists of
specific census tracts that meet the criteria in paragraph (c)(1) of
this section along with instructions on how taxpayers may determine
their census tract identifying numbers in the Federal Register or
Internal Revenue Bulletin (see Sec. 601.601 of this chapter).
(d) Reduction in basis. The basis of any property for which a
credit is allowable under section 30C(a) must be reduced by the amount
of the credit so allowed (determined without regard to section 30C(d)).
(e) Examples. The following examples illustrate the rules of this
section.
(1) Example 1--(i) Facts. A installs a free-standing garage at A's
principal residence, which costs $25,000. A installs electric vehicle
supply equipment (EVSE), which costs $1,500 and consists of an AC Level
2 charger, charging port, and connector. A also installs a wall mount
to support the charging port, which costs $500. The wall mount is
specifically designed to be integrated with the EVSE. Finally, A adds a
new electric panel and installs conduit/wiring, which together costs
$1,000, to connect the charging port to the electrical service line.
The new electric panel and conduit/wiring are used exclusively to
service the charging port and are required to make the charging port
operational. All property is owned by A and is not subject to an
allowance for depreciation. All costs include labor costs. The property
is placed in service at the time it is installed. A's principal
residence is located in an eligible census tract as described in
paragraph (c) of this section.
(ii) Analysis--(A) 30C property. The charger, charging port,
connector, wall mount, electric panel, and conduit/wiring are 30C
property under Sec. 1.30C-1(b)(1). The charger, connector, and
conduit/wiring are functionally interdependent with the charging port
(and all of these properties together constitute recharging property
under Sec. 1.30C-1(b)(1)(i)(B)). The electric panel and wall mount are
an integral part of the recharging property under Sec. 1.30C-
1(b)(1)(ii) and (b)(15). The charger, charging port, connector, wall
mount, electrical panel, and conduit/wiring meet the other requirements
of Sec. 1.30C-1(b)(1)(iii) because the property is installed at A's
principal residence, the original use of the property begins with A,
and the property is placed in service (as defined in paragraph (b)(6)
of this section) in an eligible census tract as described in paragraph
(c) of this section. The garage is not 30C property because any
building or its structural components are excluded from the definition
of 30C property under Sec. 1.30C-1(b)(1)(i), and therefore cannot
qualify as functionally interdependent with the charging port nor as an
integral part of the recharging property.
(B) Calculation of the credit. Under paragraph (b)(1)(i) of this
section, the charging port is the item of 30C property for purposes of
calculating the credit. Further, under paragraph (b)(2) of this
section, the charger (excluding the charging port), connector, wall
mount, electrical panel, and conduit/wiring are all directly
attributable and traceable associated property with respect to the
charging port. Under paragraph (b)(3) of this section, the tentative
section 30C credit is the sum of the cost of a single item of 30C
property (charging port) and the cost of directly attributable and
traceable associated property, multiplied by the applicable percentage
(30%). Here, the cost of the charging port is included in the cost of
the EVSE (with the charger and connector), and because the charger
includes only a single port, the entire $1,500 is taken into account as
either the item of 30C property or as directly attributable and
traceable associated property. Thus, the tentative section 30C credit
under paragraph (b)(3) of this section is $3,000 ($1,500 for the
charger + $500 for the wall mount + $1,000 for the panel and wiring)
multiplied by the applicable percentage (30%), which equals $900.
Because $900 is less than the $1,000 limit in paragraph (a)(4)(i)(B) of
this section, the final section 30C credit is also $900.
(2) Example 2--(i) Facts. The facts are the same as paragraph
(e)(1) of this section (Example 1), except that the total cost of all
directly attributable and traceable associated property other than the
charger (excluding the charging port) is $3,500.
(ii) Analysis. Under paragraph (b)(3) of this section, the
tentative section 30C credit is the sum of the cost of a single item of
30C property (charging port) and the cost of directly attributable and
traceable associated property, multiplied by the applicable percentage
(30%). As in paragraph (e)(1) of this section (Example 1), the cost of
the charging port is included in the cost of the EVSE (with the charger
and connector), and because the charger includes only a single port,
the entire $1,500 is taken into account as either the item of 30C
property or as directly attributable and traceable associated property.
Thus, the tentative section 30C credit under paragraph (b)(3) of this
section is $5,000 ($1,500 for the charger + $3,500 for all directly
attributable and traceable associated property) multiplied by the
applicable percentage (30%), which equals $1,500. Because $1,500 is
greater than the $1,000 limit in paragraph (a)(4)(i)(B) of this
section, the final section 30C credit is $1,000.
(3) Example 3--(i) Facts. The facts are the same as paragraph
(e)(2) of this section (Example 2), except that A operates a delivery
service and installs the EVSE at her personal residence that she uses
to charge both her personal vehicle and her delivery vehicle. Her
business use of the EVSE is 40%. The PWA requirements are not
satisfied.
(ii) Analysis. (A) As in paragraph (e)(2) of this section (Example
2), the cost of the charging port is included in the cost of the EVSE
(with the charger and connector), and because the charger includes only
a single port, the entire $1,500 is taken into account as either the
item of 30C property or as directly attributable and traceable
associated property. Under paragraph (a)(3) of this section, the 30C
property is apportioned-use property. As a result, under paragraph
(a)(4)(ii) of this section, the dollar-amount limitation must be
apportioned in the same manner as the taxpayer's section 30C credit.
(B) Under paragraph (b)(3) of this section, the tentative section
30C credit for the personal use portion of the 30C property is the sum
of the cost of a single item of 30C property (charging port) and the
cost of directly attributable and traceable associated property,
multiplied by the personal use portion (60%), and then multiplied by
the
[[Page 76774]]
applicable percentage (30%). The tentative section 30C credit under
paragraph (b)(3) of this section is $5,000 ($1,500 for the charger +
$3,500 for all directly attributable and traceable associated property)
multiplied by the personal use portion (60%), and then multiplied by
the applicable percentage (30%), which equals $900. Because $900 is
greater than the $600 limit in paragraph (a)(4)(ii) of this section
($1,000 x 60%), the final section 30C credit for the personal use
portion is $600.
(C) Under paragraph (b)(3) of this section, the tentative section
30C credit for the business use portion of the 30C property is the sum
of the cost of a single item of 30C property (charging port) and the
cost of directly attributable and traceable associated property,
multiplied by the business-use portion (40%), and then multiplied by
the applicable percentage (6%). The tentative section 30C credit under
paragraph (b)(3) of this section is $5,000 ($1,500 for the charger +
$3,500 for all directly attributable and traceable associated property)
multiplied by the business-use portion (40%), and then multiplied by
the applicable percentage (6%), which equals $120. Because $120 is less
than the $40,000 limit in paragraph (a)(4)(ii) of this section
($100,000 x 40%), the final section 30C credit for the business-use
portion is $120.
(4) Example 4--(i) Facts. B is a business entity that owns a fleet
of medium-duty electric delivery vans. To recharge its electric
delivery vans, B installs several properties at the same physical
address in the same taxable year. First, B installs 20 direct current
fast chargers (DCFCs), that have 2 charging ports each for a total of
40 charging ports. Each DCFC costs $30,000. B also installs a pedestal
to support each DCFC, which cost $1,000 each. B additionally installs
an electric panel and conduit/wiring, which together cost $50,000, to
connect the DCFCs to the electrical service line. Finally, B installs a
smart charge management system for $25,000, which is used to control
the amount of power dispensed by the DCFCs to meet B's charging needs
and prevent equipment overloads. The electric panel and conduit/wiring
are used exclusively to service the DCFCs and are necessary to install
to make each charging port operational. All property is owned by B. All
costs include labor costs. Each of the above properties is property of
a character subject to depreciation and is placed in service at the
time it is installed. The physical address where B installs these
properties is located in an eligible census tract as described in
paragraph (c) of this section.
(ii) Analysis--(A) 30C property. The DCFCs, pedestals, electric
panel, conduit/wiring, and the smart charge management system all
constitute 30C property under Sec. 1.30C-1(b)(1). Each DCFC and each
pedestal is functionally interdependent with the respective charging
ports with which they are associated and the conduit/wiring property is
functionally interdependent with the entire class of charging ports
(and these properties together constitute recharging property under
Sec. 1.30C-1(b)(1)(i)(B)) and the electric panel and the smart charge
management system constitute integral parts of the entire class of
charging ports under Sec. 1.30C-1(b)(1)(ii) and (b)(15). The DCFCs,
pedestals, the electrical panel, conduit/wiring, and the smart charge
management system all meet the other requirements of Sec. 1.30C-
1(b)(1)(iii) because the properties are each subject to an allowance
for depreciation, the original use of the properties begins with B, and
the properties are placed in service (as described in paragraph (b)(6)
of this section) in an eligible census tract as described in paragraph
(c) of this section.
(B) Calculation of the credit. (1) Under paragraph (b)(1)(i) of
this section, each charging port constitutes a separate item of 30C
property for purposes of calculating the credit. Additionally, under
paragraph (b)(2)(i) of this section, each charger (excluding its
respective ports) and each pedestal, electrical panel, and the conduit/
wiring are all associated property that is directly attributable to and
traceable with respect to their respective charging ports. Further, the
electric panel, the conduit/wiring, and the smart charge management
system are associated property directly attributable and traceable to
more than one single item of 30C property, as described in paragraph
(b)(2)(ii) of this section, because they are not directly attributable
and traceable to any single charging port.
(2) Under paragraph (b)(3) of this section, B's tentative section
30C credit for each single item of 30C property (each charging port) is
the sum of the cost of that single item of 30C property (each charging
port), the cost of directly attributable and traceable associated
property, and the ratable share of the cost of other associated
property multiplied by the applicable percentage as described in
paragraph (a)(2) of this section (6% or 30%, depending on whether the
PWA requirements are satisfied).
(3) Because each DCFC charger costs $30,000 and each has 2 charging
ports, the cost of each port is $15,000 ($30,000 / 2). Additionally,
because each pedestal supports a charger with 2 ports and costs $1,000,
the cost attributable to each port is $500 ($1,000 / 2). The costs of
the electric panel and the conduit/wiring are allocated ratably based
on the cost per charging port ($50,000 / 40 = $1,250). Similarly, the
cost of the smart charge management system is also allocated ratably
based on the cost per charging port ($25,000 / 40 = $625).
(4) B should therefore calculate a separate section 30C credit for
each single item of 30C property (that is, each of the 40 charging
ports) by adding the cost of the charging port ($15,000) to the cost
($500) of directly attributable and traceable associated property
(respective pedestal) and to the ratable shares ($1250 + $625) of the
two functionally interdependent and integral part properties (panel,
including its conduit/wiring, and the smart charge management system).
The sum of these costs is $17,375 for each charging port.
(5) If B does not meet the PWA requirements, B's tentative section
30C credit for each charging port is $17,375 multiplied by the
applicable percentage (6% under paragraph (b)(3)(i) of this section),
which equals $1,042.50. Because $1,042.50 is less than the $100,000
credit limit for depreciable property under paragraph (a)(4)(i)(A) of
this section, the final section 30C credit for each charging port is
also $1,042.50. B's total section 30C credit is $41,700, the sum of the
section 30C credit for each charging port that B placed in service
($1,042.50 x 40) in the taxable year.
(6) If B meets the PWA requirements, B's tentative section 30C
credit for each charging port is $17,375 multiplied by the increased
applicable percentage (30%) under paragraph (b)(3)(i) of this section,
which equals $5,212.50. Because $5,212.50 is less than the $100,000
credit limit for depreciable property under paragraph (a)(4)(i)(A) of
this section, the final section 30C credit for each charging port is
also $5,212.50. B's total section 30C credit is $208,500, the sum of
the section 30C credit for each charging port that B placed in service
($5,212.50 x 40) during the taxable year. The fact that this total
credit exceeds the $100,000 limit is not relevant because section
30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the
$100,000 limit applies on a per-item basis and not as an aggregate
limit.
(5) Example 5--(i) Facts. The facts are the same as paragraph
(e)(4) of this section (Example 4), except that B
[[Page 76775]]
places in service the electric panel, conduit/wiring, smart charge
management system, and 10 DCFCs in Year 1. In Year 2, B then installs
and places in service the other 10 DCFCs.
(ii) Analysis--(A) 30C property. Under paragraph (a) of this
section, the amount of the credit, generally, is determined based on a
percentage of the cost of 30C property placed in service, as defined
under paragraph (b)(6) of this section, by a taxpayer during a taxable
year. In this example, B has placed in service 10 DCFCs, and certain
integral part property and property that is functionally interdependent
to all 20 DCFCs in one tax year, while placing in service 10 more DCFCs
in a different tax year. B will, therefore, include the electric panel,
conduit/wiring, smart charge management system, and 10 pedestals and 20
ports (that is, the 10 DCFCs placed in service in year 1) in
calculating the Year 1 section 30C credit. In Year 2, B will only
include in calculating B's total section 30C credit, the 10 pedestals
and 20 ports installed in year 2.
(B) Calculation of the credit. (1) For year 1 the cost of each DCFC
charger is still $30,000 and the cost of each port is still $15,000.
Additionally, the cost for the pedestals attributable to each port is
still $500. The costs of the electric panel and the conduit/wiring are
allocated ratably based on the cost per charging port placed in service
in the same taxable year ($50,000 / 20 = $2,500). Similarly, the cost
of the smart charge management system is also allocated ratably based
on the cost per charging port placed in service in the same taxable
year ($25,000 / 20 = $1,250). The cost for each single item in Year 1
includes the cost of each port ($15,000), the ratable share of the cost
of the pedestal ($500), the ratable share of the cost of the electric
panel and conduit/wiring ($2,500) and the ratable share of the cost of
the smart charge management system ($1,250). The sum of these costs for
a single item of 30C property in year 1 is $19,250. If B did not meet
the PWA requirements, B's tentative section 30C credit for each
charging port is $19,250 multiplied by the 6% applicable rate, which
equals $1,155 per single item of 30C property for Year 1. In total, B's
section 30C credit for Year 1 would be $ 23,100 ($1,155 x 20). If B
does meet the PWA requirements, B's tentative section 30C credit for
each port is $5,775, which is the $19,250 cost per single item
multiplied by the 30% applicable rate. In total, if B meets the PWA
requirements, B's section 30C credit for Year 1 would be $115,500
($5,775 x 20). The fact that this total credit exceeds the $100,000
limit is not relevant because section 30C(b)(1) and paragraph
(a)(4)(i)(A) of this section provide that the $100,000 limit applies on
a per-item basis and not as an aggregate limit.
(2) For Year 2, the cost of each port would still be $15,000 and
the cost for the pedestals attributable to each port is still $500. The
integral part property was already placed in service in Year 1, and
therefore, the cost associated with that property is not allocated to
the Year 2 property. Therefore, in Year 2, if B does not meet the PWA
requirements, B's section 30C credit for each single item is $930
($15,500 x 6%), and the amount of B's total Year 2 section 30C credit
is $18,600 ($930 x 20). If B meets the PWA requirements, B's section
30C credit for each single item is $4,650 ($15,500 x 30%), and B's
total Year 2 section 30C credit is $93,000 ($4,650 x 20).
(6) Example 6--(i) Facts. The facts are the same as paragraph
(e)(4) of this section (Example 4), except that B begins construction
and incurs $100,000 of costs related to the installation of the
chargers in Year 1, but no property is placed in service until Year 2.
(ii) Analysis. There is no section 30C credit for Year 1 because no
30C property has been placed in service. The 30C property is placed in
service in Year 2. In Year 2, the section 30C credit is the same as the
Year 1 credit in paragraph (e)(4) of this section (Example 4).
(7) Example 7--(i) Facts. The facts are the same as paragraph
(e)(4) of this section (Example 4), except that instead of installing
20 DCFCs, B installs 10 DCFCs, with 2 charging ports each, and 10 AC
Level 2 chargers (AC chargers), also with 2 charging ports each. Each
AC Level 2 charger costs $10,000. Each DCFC charger still costs
$30,000. B also installs a pedestal to support each AC charger, which
costs $1,000 each.
(ii) Analysis--(A) 30C property. The analysis for the DCFCs
pedestals, electric panel, conduit/wiring, and smart charge management
system is the same as in Example 4 of this paragraph (e). Additionally,
the AC chargers also constitute 30C property under Sec. 1.30C-1(b)(1).
Each AC charger and each pedestal is functionally interdependent with
the respective charging ports with which they are associated (and these
properties together constitute recharging property under Sec. 1.30C-
1(b)(1)(i)(B)) and the electric panel, the conduit/wiring property, and
the smart charge management system constitute integral parts of all of
the DCFC ports and AC charger charging ports under Sec. 1.30C-
1(b)(1)(ii) and (b)(15). The AC chargers also meet the other
requirements of Sec. 1.30C-1(b)(1)(iii) because they are subject to an
allowance for depreciation, the original use of the properties begins
with B, and are placed in service (as defined in paragraph (b)(6) of
this section) in an eligible census tract as described in paragraph (c)
of this section.
(B) Calculation of the credit. (1) Under paragraph (b)(1)(i) of
this section, each of the 20 DCFC charging ports and each of the 20 AC
charger charging ports constitutes a separate item of 30C property for
purposes of calculating the credit. Additionally, under paragraph
(b)(2)(i) of this section, each charger (excluding its respective
ports) and each pedestal, electrical panel, and the conduit/wiring are
all associated property that is directly attributable to and traceable
associated property with respect to their respective charging ports.
Further, the electric panel, the conduit/wiring, and the smart charge
management system are associated property directly attributable and
traceable to more than one single item of 30C property, as described in
paragraph (b)(2)(ii) of this section, because they are not directly
attributable and traceable to any single charging port.
(2) Under paragraph (b)(3) of this section, B's tentative section
30C credit for each single item of 30C property (each charging port) is
the sum of the cost of that single item of 30C property (each charging
port), the cost of directly attributable and traceable associated
property, and the ratable share of the cost of other associated
property multiplied by the applicable percentage as described in
paragraph (a)(2) of this section (6% or 30%, depending on whether the
PWA requirements are satisfied).
(3) B should therefore calculate a separate section 30C credit for
each single item of 30C property (that is, each of the 20 DCFC charging
ports and each of the 20 AC charger charging ports). Because each of
the 10 DCFCs costs $30,000 and each has 2 charging ports, the cost of
each DCFC port is $15,000 ($30,000 / 2). Similarly, because each of the
10 AC chargers costs $10,000 and each has 2 charging ports, the cost of
each AC charger charging port is $5,000 ($10,000 / 2). To calculate the
credit, B should add the cost of the charging port ($15,000 for the
DCFC ports and $5,000 for the AC charger charging ports) to the
allocable costs of the associated properties. Because each pedestal
costs $1,000 and supports a single charger that has 2 ports, the cost
attributable to each port (both the DCFC and AC charger charging ports)
is $500 ($1,000 / 2). With respect to the properties
[[Page 76776]]
whose costs are not directly attributable and traceable to any single
port, B must allocate their costs according to each port's ratable
share of B's total cost for the 40 ports. Because the 20 DCFC ports
cost a total of $300,000 (20 x $15,000) and the 20 AC charger charging
ports cost only $100,000 in total (20 x $5,000), B should allocate 75%
of these costs to the 20 DCFC ports and 25% of these costs to the AC
charger charging ports. Therefore, $1,875 (($50,000 x 75%) / 20) of the
cost of the electric panel and conduit/wiring is attributable to each
of the 20 DCFC charging ports, and $625 (($50,000 x 25%) / 20) is
attributable to each of the 20 AC charger ports. Similarly, the cost of
the smart charge management system is allocated in the same ratio, with
$937.50 (($25,000) x 75%) / 20) allocated to each DCFC port, and
$312.50 (($25,000 x 25%) / 20) to each AC charger charging port.
(4) Accordingly, If B does not meet the PWA requirements, B's
tentative section 30C credit for each DCFC port is $18,312.50 ($15,000
+ $500 + $1875 + $937.50) multiplied by the 6% applicable rate, which
equals $1,098.75, and the section 30C credit for each AC charger
charging port is $6,437.50 ($5,000 + $500 + $625 + $312.50) multiplied
by the 6% applicable rate, which equals $386.25. Because both $1,098.75
and $386.25 are less than the $100,000 credit limit for depreciable
property under paragraph (a)(4)(i)(A) of this section, the final
section 30C credit for each DCFC port is also $1,098.75, and the final
section 30C credit for each AC charger charging port is also $386.25.
B's total section 30C credit is $29,700 ($21,975 + $7,725), the sum of
the section 30C credit for each charging port that B placed in service
($1,098.75 x 20) + ($386.25 x 20) in the taxable year.
(5) If B meets the PWA requirements, B's tentative section 30C
credit for each DCFC port is $18,312.50 multiplied by the increased
applicable percentage (30%) under paragraph (b)(3)(i) of this section,
which equals $5,493.75, and its tentative section 30C credit for each
AC charger charging port is $6,437.50 multiplied by 30%, or $1,931.25.
Because both $5,493.75 and $1,931.25 are less than the $100,000 credit
limit for depreciable property under paragraph (a)(4)(i)(A) of this
section, the final section 30C credit for each DCFC port is also
$5,493.75 and the final section 30C credit for each AC charger charging
port is also $1,931.25. B's total section 30C credit is $148,500, the
sum of the section 30C credit for the 20 DCFC ports that B placed in
service ($5,493.75 x 20 = $109,875) plus the sum of the section 30C
credit for the 20 AC charger charging ports that B placed in service
($1,931.25 x 20 = $38,625) during the taxable year. The fact that this
total credit exceeds the $100,000 limit is not relevant because section
30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the
$100,000 limit applies on a per-item basis and not as an aggregate
limit.
(8) Example 8--(i) Facts. The facts are the same as paragraph
(e)(4) of this section (Example 4), except that B spends $100,000
improving the land (for example, grading the land, installing a
drainage system, and installing a paved surface). B also spends $15,000
on fees related to permitting improvements to the land. Finally, B
spends $5,000 on ``EV parking only'' signs and striping on the pavement
needed for the EV to access the charger.
(ii) Analysis. The costs for improving the land, associated
permitting fees, and signs and striping are not 30C property because
such costs are not functionally interdependent with the chargers or an
integral part of the chargers. See Sec. 1.30C-1(b)(14) and (15).
Therefore, the costs that B incurred to improve the land, to add the
signage, and to stripe the pavement would not change the amount of the
section 30C credit that B may claim.
(9) Example 9--(i) Facts. The facts are the same as paragraph
(e)(4) of this section (Example 4), except that B also installs and
places in service a battery energy storage system as a backup source of
electricity during power outages and to moderate electricity pricing.
The battery energy storage system receives, stores, and delivers energy
for conversion to electricity, and is located on the same or
immediately adjacent physical address as the chargers and charging
ports. The battery storage system is only used to support the chargers
and does not provide electricity for any other purpose. The battery
energy storage system costs $20,000.
(ii) Analysis--(A) 30C property. The battery energy storage system
constitutes 30C property under Sec. 1.30C-1(b)(1)(i)(B) because it is
for the recharging of motor vehicles, (specifically, it is an
electrical energy storage property described in Sec. 1.30C-
1(25)(iii)), and it is located at the point where motor vehicles are
recharged under Sec. 1.30C-1(b)(16)(ii) because its located on the
same or immediately adjacent physical address as B's chargers.
(B) Calculation of the credit. (1) The battery energy storage
system is a single item of 30C property under paragraph (b)(1)(iii) of
this section, and it constitutes a separate single item of 30C property
from B's charging ports and the properties associated with the charging
ports. Therefore, B should calculate the section 30C credit for the
battery storage system separately from its credit arising from its
costs for these other properties. B also should not allocate the cost
of the battery energy storge system among the charging ports.
(2) Accordingly, if B does not meet the PWA requirements, B's
tentative section 30C credit for the battery energy storage system is
$1,200 ($20,000 x 6%). Because this $1,200 amount is less than the
$100,000 credit limit for depreciable property under paragraph
(a)(4)(i)(A) of this section, the final section 30C credit for the
battery energy storage system is also $1,200. If B meets the PWA
requirements, B's tentative section 30C credit for the battery energy
storage system is $6,000 ($20,000 x 30%). Because this $6,000 amount is
less than the $100,000 credit limit for depreciable property under
paragraph (a)(4)(i)(A) of this section, the final section 30C credit
for the battery energy storage system is also $6,000. It would not be
relevant if B claimed $100,000 or more in section 30C credits for other
items of 30C property because section 30C(b)(1) and paragraph
(a)(4)(i)(A) of this section provide that the $100,000 limit applies on
a per-item basis and not as an aggregate limit.
(3) If B claims a section 30C credit for the battery energy storage
system, this would render such storage property to be primarily used in
the transportation of goods or individuals and not for the production
of electricity. As a result, the property would not satisfy the
requirements under section 48 or 48E.
(10) Example 10--(i) Facts. The facts are the same as paragraph
(e)(4) of this section (Example 4), except that B participates in a
local electric company incentive program. The electric company installs
the electric panel, conduit/wiring, and load management system, for
which the electric company retains ownership.
(ii) Analysis--(A) 30C property. The DCFCs, pedestals, electric
panel, conduit/wiring, and the smart charge management system all
constitute 30C property, as explained in the analysis under paragraph
(e)(4) of this section (Example 4). However, B does not own the
electric panel, conduit/wiring, and load management system, and, as a
result, may not include the cost of that property in calculating B's
section 30C credit. B would only calculate the credit based on the 30C
property the taxpayer owns, which is the DCFCs and pedestals. The
electric company that owns the electric panel, conduit/wiring, and load
management system cannot
[[Page 76777]]
claim a section 30C credit for such property because it does not own
the charging ports and therefore does not own a single item of 30C
property, which is necessary to claim a section 30C credit. See
paragraph (b)(1) of this section.
(B) Calculation of the credit. (1) Under paragraph (b)(3) of this
section, B's tentative section 30C credit for each single item of 30C
property (each charging port) is the sum of the cost of that single
item of 30C property (each charging port), the cost of directly
attributable and traceable associated property, and the ratable share
of the cost of other associated property multiplied by the applicable
percentage as described in paragraph (a)(2) of this section (6% or 30%,
depending on whether the PWA requirements are satisfied).
(2) To calculate the credit for each single item of 30C property
(each of the 40 charging ports) B would add the cost of each charging
port ($15,000 ($30,000 / 2)) to the cost ($500 ($1,000 / 2)) of
directly attributable and traceable associated property (that is, the
respective pedestal). The sum of these costs is $15,500 for each
charging port. If B does not meet the PWA requirements, B's tentative
section 30C credit for each charging port is $15,500 multiplied by the
applicable percentage (6% under paragraph (b)(3)(i)) of this section),
which equals $930 per single item. Because this $930 amount is less
than the $100,000 credit limit for depreciable property under paragraph
(a)(4)(i)(A) of this section, the final section 30C credit for each
charging port is $930. The total section 30C credit for B, if B does
not meet the PWA requirements is $37,200 ($930 x 40).
(3) If B meets the PWA requirements, B's tentative section 30C
credit for each charging port is $15,500 multiplied by the increased
applicable percentage (30%), which equals $4,650 per single item. B's
total section 30C credit, in this example, is $186,000 ($4,650 x 40).
The fact that this total credit exceeds the $100,000 limit is not
relevant because section 30C(b)(1) and paragraph (a)(4)(i)(A) of this
section provide that the $100,000 limit applies on a per-item basis and
not as an aggregate limit.
(11) Example 11--(i) Facts. The facts are the same as paragraph
(e)(4) of this section (Example 4), except that B engages with a local
utility company providing charging services that installs the 30C
property described in paragraph (e)(4) (Example 4) at the same physical
address in the same taxable year at the utility company's expense, for
which the utility company retains ownership.
(ii) Analysis. As the owner of the 30C property, the local utility
company, and not B, would be eligible for a section 30C credit for such
property, assuming all other statutory and regulatory requirements are
met. The remainder of the analysis is the same as set forth in
paragraph (e)(4) of this section (Example 4).
(12) Example 12--(i) Facts. C owns a gasoline station. C decides to
add retail hydrogen fueling capability to its existing gasoline station
to facilitate the refueling of hydrogen fuel cell vehicles. C installs
a bulk hydrogen storage tank ($900,000), cryogenic pumps ($5,000,000),
evaporators associated with bulk storage ($700,000), cascade storage
system ($1,300,000), electrical supply equipment used only for the
hydrogen equipment ($150,000), a high-conductivity concrete pad
(necessary to prevent static discharge during fueling), firewalls, and
piping (collectively, $550,000) and two hydrogen dispensers ($160,000
each) which include the dispensing control valves, connection hoses,
hydrogen meters, and nozzles. All property is owned by C and is located
at the point of refueling, meaning it is at the same or immediately
adjacent physical address. All costs include labor costs. The property
is property of a character subject to depreciation. All property is
placed in service in the year it is installed, in an eligible census
tract as described in paragraph (c) of this section.
(ii) Analysis--(A) 30C property. The bulk hydrogen storage tank,
cryogenic pumps, evaporators, cascade storage system, electrical supply
equipment, high-conductivity concrete pad, firewalls, piping, and two
hydrogen dispensers are 30C property under Sec. 1.30C-1(b)(1). The
cryogenic pumps and electrical supply equipment are functionally
interdependent with the cascade high-pressure storage tank under Sec.
1.30C-1(b)(1)(i)(A) and (b)(14). The high-conductivity concrete pad,
firewalls, and piping are functionally interdependent property with the
dispensers, also under Sec. 1.30C-1(b)(1)(i)(A) and (b)(14).
Collectively, this property is refueling property under Sec. 1.30C-
1(b)(1)(i)(A). The evaporators are an integral part associated with the
bulk hydrogen storage tank under Sec. 1.30C-1(b)(1)(i)(B) and (b)(15).
The hydrogen storage system, cryogenic pumps, evaporators, cascade
storage system, electrical supply equipment, high-conductivity concrete
pad, firewalls, piping, and two hydrogen fuel dispensers meet the other
requirements of Sec. 1.30C-1(b)(1)(iii) because the properties are
each subject to an allowance for depreciation, the original use of the
properties begins with C, and the properties are placed in service in
an eligible census tract as described in paragraph (c) of this section.
(B) Calculation of the credit. (1) The bulk hydrogen storage tank
system and the cascade high-pressure storage system are each qualified
alternative fuel storage property and each is a single item of 30C
property under Sec. 1.30C-1(b)(1) and paragraph (b)(1) of this
section. Although the cascade high-pressure storage system is comprised
of multiple storage tanks, the system is treated as a single item of
alternative fuel storage property. The dispensers are each single items
of 30C property pursuant to Sec. 1.30C-1(b)(1) and paragraph (b)(1) of
this section.
(2) Under paragraph (b)(3) of this section, the tentative section
30C credit for the bulk hydrogen storage tank is the sum of the cost of
the bulk hydrogen storage tank plus the cost of the evaporators (that
is, the only associated property that is directly attributable and
traceable to the bulk hydrogen storage tank), multiplied by the
applicable percentage (6% or 30%, depending on whether the PWA
requirements are satisfied) pursuant to section 30C(a). Therefore, the
tentative section 30C credit for the bulk hydrogen storage tank is
$96,000 (($900,000 + $700,000) x 6%) if the PWA requirements are not
met, or $480,000 (($900,000 + $700,000) x 30%) if the PWA requirements
are met. Under paragraph (b)(3) of this section, the section 30C credit
for the bulk hydrogen storage tank, after applying the $100,000
limitation in paragraph (a)(4)(i)(A) of this section, is $96,000 if the
PWA requirements are not met, or $100,000 if the PWA requirements are
met.
(3) Under paragraph (b)(3) of this section, the costs taken into
account in calculating the tentative section 30C credit for the cascade
high-pressure storage system include the costs of any associated
property that is directly attributable and traceable to the cascade
high-pressure storage system, or a ratable share of the costs if the
associated property if it is directly attributable and traceable to
more than one item of property. The functionally interdependent
property associated with the cascade high-pressure storage tank (that
is, the cryogenic pumps and electrical supply equipment) is directly
attributable and traceable to the cascade high-pressure storage system
and no other item of property. Therefore, the tentative section 30C
credit for the cascade high-pressure storage system is the sum of the
costs of the cascade storage system and cryogenic pumps, and electrical
supply equipment ($1,300,000 + $5,000,000 + $150,000),
[[Page 76778]]
multiplied by the applicable percentage (6% or 30%, depending on
whether the PWA requirements are satisfied). Therefore, the tentative
section 30C credit for the cascade high-pressure storage system is
$387,000 (($1,300,000 + $5,000,000 + $150,000) x 6%) if the PWA
requirements are not met, or $1,935,000 (($1,300,000 + $5,000,000 +
$150,000) x 30%) if the PWA requirements are met. Under paragraph
(b)(3) of this section, the section 30C credit for the cascade high-
pressure storage system, after applying the $100,000 limitation in
paragraph (a)(4)(i)(A) of this section, is $100,000 if the PWA
requirements are not met, or $100,000 if the PWA requirements are met.
(4) The high-conductivity concrete pad, firewalls, and piping are
functionally interdependent with the fuel dispensers; thus, the high-
conductivity concrete pad, firewalls, and piping are associated
property under paragraph (b)(2) of this section with respect to the
dispensers. Because the high-conductivity concrete pad, firewalls, and
piping are directly attributable and traceable to both fuel dispensers
and no other single item of 30C property, half of the costs are
allocated to each dispenser under paragraph (b)(2)(ii) of this section.
Therefore, under paragraph (b)(3) of this section, the tentative
section 30C credit for each fuel dispenser is the sum of the cost of
each the hydrogen dispenser and half the cost of the high-conductivity
concrete pad, firewalls, and piping are multiplied by the applicable
percentage (6% or 30%, depending on whether the PWA requirements are
satisfied). Therefore, the tentative section 30C credit for each fuel
dispenser is $26,100 ($160,000 + ($550,000 / 2) x 6%) if the PWA
requirements are not met, or $130,500 (($160,000 + ($550,000 / 2)) x
30%) if the PWA requirements are met. Under paragraph (b)(3) of this
section, the final section 30C credit for each fuel dispenser, after
applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this
section, is $26,100 if the PWA requirements are not met, or $100,000 if
the PWA requirements are met.
(5) If C does not meet the PWA requirements, C's total section 30C
credit for the year is $96,000 for the bulk hydrogen storage tank, plus
$100,000 for the cascade high-pressure storage tank, plus $26,100 for
each fuel dispenser, for a total of $248,200. If C meets the PWA
requirements, C's total section 30C credit for the year is $100,000 for
the bulk hydrogen storage tank, plus $100,000 for the cascade high-
pressure storage tank, plus $100,000 for each fuel dispenser, for a
total of $400,000. The fact that this total credit exceeds the $100,000
limit is not relevant because section 30C(b)(1) and paragraph
(a)(4)(i)(A) of this section provide that the $100,000 limit applies on
a per-item basis and is not an aggregate limit.
(13) Example 13--(i) Facts. G installs a time-fuel compressed
natural gas (CNG) station to refuel its fleet of heavy-duty CNG trucks
at a central lot near its warehouse. The station has 10 fuel
dispensers. From the existing utility gas meter, G installs a gas line,
dryer, filter, and gas compressor, which costs $300,000. The gas
compressor flows to buffer storage, which costs $100,000. The buffer
storage flows through a temperature compensation unit, which costs
$50,000, before flowing through to the dispensers, which dispense the
CNG. Each fuel dispenser is capable of fueling at or above the
dispenser's minimum rate of fueling, and has one hose and nozzle, which
costs $10,000 per fuel dispenser. All property is owned by G and is
located at the point of refueling, meaning it is on the same or
immediately adjacent physical address. All costs include labor costs.
The address where G installs these properties is located in an eligible
census tract as described in paragraph (c) of this section.
(ii) Analysis--(A) 30C property. The gas line, dryer, filter, gas
compressor, buffer storage, temperature compensation unit, and fuel
dispensers are 30C property pursuant to Sec. 1.30C-1(b)(1) and
paragraph (b)(1) of this section. The gas line, dryer, filter, gas
compressor, and temperature compensation unit are functionally
interdependent with the dispensers pursuant to Sec. 1.30C-1(b)(14).
Together, these items of property constitute refueling property under
Sec. 1.30C-1(b)(1)(i)(A). Each fuel dispenser, the gas line, dryer,
filter, gas compressor, buffer storage, and temperature compensation
unit, all meet the other requirements of Sec. 1.30C-1(b)(1)(iii)
because the properties are each subject to an allowance for
depreciation, the original use of the properties begins with G, and the
properties are placed in service (as described in paragraph (b)(6) of
this section) in an eligible census tract as described in paragraph (c)
of this section.
(B) Calculation of the credit. (1) Each fuel dispenser is a single
item of 30C property pursuant to paragraph (b)(1)(ii) of this section
and Sec. 1.30C-1(b)(12). The gas line, dryer, filter, gas compressor,
and temperature compensation unit are each associated property pursuant
to paragraph (b)(2) of this section, and their cost is allocated
ratably to each dispenser (($300,000 + $50,000) / 10 = $35,000). The
buffer storage is a single item of 30C property pursuant to Sec.
1.30C-1(b)(1) and paragraph (b)(1) of this section.
(2) If G does not meet the PWA requirements, under paragraph
(b)(3)(i) of this section, the tentative section 30C credit for each
fuel dispenser is the sum of the cost of that single item of 30C
property (that is, the fuel dispenser) ($10,000) and the ratable share
of the cost of other associated property ($35,000) multiplied by the
applicable percentage (6%), or $2,700, (($10,000 + $35,000) x 6% =
$2,700). The tentative section 30C credit for the cost of the buffer
storage is the cost of the buffer storage multiplied by the applicable
percentage (6%) or $6,000 ($100,000 x 6% = $6,000). Under paragraph
(b)(3) of this section, after applying the $100,000 limitation in
paragraph (a)(4)(i)(A) of this section, if the PWA requirements are not
met, the final section 30C credit for each fuel dispenser is $2,700 and
the final section 30C credit for the buffer storage is $6,000. The
total section 30C credit is $33,000 (($2,700 x 10) + $6,000)).
(3) If G meets the PWA requirements, the tentative section 30C
credit under paragraph (b)(3) of this section for each dispenser is
$13,500, (($10,000 + $35,000) x 30% = $13,500). The tentative section
30C credit for the buffer storage is $30,000 ($100,000 x 30% =
$30,000). Under paragraph (b)(3) of this section, after applying the
$100,000 limitation in paragraph (a)(4)(i)(A) of this section, if the
PWA requirements are met, the final section 30C credit for each fuel
dispenser is $13,500 and the final section 30C credit for the buffer
storage is $30,000. The total section 30C credit is $165,000 (($13,500
x 10) + $30,000)). The fact that this total credit exceeds the $100,000
limit is not relevant because the $100,000 limit applies on a per-item
basis and is not an aggregate limit.
(14) Example 14--(i) Facts. The facts are the same as paragraph
(e)(13) of this section (Example 13), except that G also installs a
local utility line ($400,000) and gas utility meter ($5,000) to service
its CNG refueling station. The portion of cost of the local utility
line on the same or immediately adjacent physical address as the CNG
dispensers is $100,000. The gas utility meter is also on the same or
immediately adjacent physical address as the CNG dispensers. All
property is owned by G. All costs include labor costs. Each of the
above properties is property of a character subject to depreciation and
is placed in service at the time it is installed. The physical address
where G installs a
[[Page 76779]]
portion of the local utility line and gas utility meter is located in
an eligible census tract as described in paragraph (c) of this section.
(ii) Analysis--(A) 30C property. The portion of the local utility
line that is on the same or immediately adjacent physical address as
the CNG dispensers and gas utility meter are 30C property pursuant to
Sec. Sec. 1.30C-1(b)(1) and paragraph (b)(1) of this section. The
portion of the local utility line that is on the same or immediately
adjacent physical address as the CNG dispensers is located at the point
of refueling under Sec. 1.30-1(b)(16). (The remaining portion is not
located at the point of refueling and is therefore not 30C property.)
The gas meter is also located at the point of refueling under Sec.
1.30-1(b)(16) because it is on the same or immediately adjacent
physical address as the CNG dispensers. Further, the portion of the
local utility line that is on the same or immediately adjacent physical
address as the CNG dispensers and the gas meter constitute integral
part property with respect to the fuel dispensers under Sec. 1.30C-
1(b)(15). Together with the gas line, dryer, filter, gas compressor,
and temperature compensation unit, the utility line and the gas meter
are refueling property under Sec. 1.30C-1(b)(1)(i)(A).
(B) Calculation of the credit. (1) Each fuel dispenser is a single
item of 30C property pursuant to paragraph (b)(1)(ii) of this section
and Sec. 1.30C-1(b)(12). The local utility line and gas utility meter
are each associated property pursuant to paragraph (b)(2) of this
section. Their costs are allocated ratably to each dispenser (($100,000
+ $5,000) / 10 = $10,500) under paragraph (b)(2)(ii) of this section.
(2) If G does not meet the PWA requirements, under paragraph (b)(3)
of this section, the tentative section 30C credit for each fuel
dispenser is the sum of the dispenser, the ratable cost of the gas
line, dryer, filter, the gas compressor and temperature compensation
unit, and the ratable share of the local utility line and gas utility
meter, multiplied by the applicable percentage (6%), or $3,330,
(($10,000 + $35,000 + $10,500) x 6% = $3,330). The tentative section
30C credit for the cost of the buffer storage is $6,000 ($100,000 x 6%
= $6,000). Under paragraph (b)(3) of this section, after applying the
$100,000 limitation in paragraph (a)(4)(i)(A) of this section, if the
PWA requirements are not met, the final section 30C credit for each
fuel dispenser is $3,330 and the final section 30C credit for the
buffer storage is $6,000. The total section 30C credit is $39,330
(($3,330 x 10) + $6,000)).
(3) If G meets the PWA requirements, the tentative section 30C
credit for each dispenser is $16,650, (($10,000 + $35,000 + $10,500) x
30% = $16,650). The tentative section 30C credit for the cost of the
buffer storage is $30,000 ($100,000 x 30% = $30,000). Under paragraph
(b)(3) of this section, after applying the $100,000 limitation in
paragraph (a)(4)(i)(A) of this section, if the PWA requirements are
met, the final section 30C credit for each fuel dispenser is $16,650
and the final section 30C credit for the buffer storage is $30,000. The
total section 30C credit is $196,500 (($16,650 x 10) + $30,000)). The
fact that this total credit exceeds the $100,000 limit is not relevant
because the $100,000 limit applies on a per-item basis and is not an
aggregate limit.
(15) Example 15--(i) Facts. W installs a refueling station that is
used to refuel forklift trucks with qualified alternative fuel.
(ii) Analysis. The refueling station is not 30C property under
Sec. 1.30C-1(b)(1) and paragraph (b)(1) of this section. Section
1.30C-1(b)(1)(i)(A) requires that 30C property must be used to store or
dispense qualified alternative fuel at the point where the fuel is
dispensed into the fuel tank of a ``motor vehicle.'' Although a
forklift truck occasionally may be operated on public roads, it is
manufactured primarily for hauling loads in factories, warehouses, and
other similar settings, and not for use on public streets, roads, and
highways. Therefore, a forklift truck is not a ``motor vehicle'' for
purposes of the section 30C credit under Sec. 1.30C-1(b)(17).
(f) Claim requirements. A taxpayer claiming the section 30C credit
must attach a Form 8911, Alternative Fuel Vehicle Refueling Property
Credit, or any successor form required by the IRS, completed in
accordance with the form instructions, and file it with the return on
which the section 30C credit is claimed.
(g) Applicability date. This section applies to property placed in
service in taxable years ending after [date of publication of final
regulations in the Federal Register].
0
Par. 3. Section 1.30C-3 is revised to read as follows:
Sec. 1.30C-3 Rules relating to the increased credit amount for
prevailing wage and apprenticeship.
(a) In general. If any qualified alternative fuel vehicle refueling
project (as defined by section 30C(g)(1)(B)) (30C project) placed in
service during the taxable year satisfies the requirements in paragraph
(b) of this section, the credit determined under section 30C(a) for any
30C property of a character subject to an allowance for depreciation
that is part of such 30C project is multiplied by five.
(b) 30C project requirements--(1) In general. A 30C project
satisfies the requirements of this paragraph (b) if it is one of the
following--
(i) A project the construction of which began prior to January 29,
2023; or
(ii) A project that meets the prevailing wage requirements of
section 45(b)(7) of the Code and Sec. 1.45-7, the apprenticeship
requirements of section 45(b)(8) and Sec. 1.45-8, and the
recordkeeping and reporting requirements of Sec. 1.45-12, all with
respect to the construction of any 30C property within the meaning of
section 30C and the section 30C regulations before such 30C property is
placed in service.
(2) Determination of a project. Multiple 30C properties will be
treated as a single 30C project if the items of property are
constructed and operated on a contiguous piece of land, owned by a
single taxpayer (subject to the related taxpayer rule provided in
paragraph (b)(3) of this section), placed in service in a single
taxable year, and one or more of the following factors is present:
(i) The properties are described in one or more common
environmental or other regulatory permits;
(ii) The properties are constructed pursuant to a single master
construction contract; or
(iii) The construction of the properties is financed pursuant to
the same loan agreement.
(3) Related taxpayers--(i) Definition. For purposes of this
section, the term related taxpayers means members of a group of trades
or businesses that are under common control (as defined in Sec. 1.52-
1(b)).
(ii) Related taxpayer rule. For purposes of this section, related
taxpayers are treated as one taxpayer in determining whether multiple
properties are treated as a 30C project with respect to which a section
30C credit may be determined.
(c) Coordination with 30C(e)(2) and Sec. 1.30C-4(c). If a person
who sells 30C property, the use of which is described in section
50(b)(3) or (4) and which is not subject to a lease, is treated as the
taxpayer that placed such property in service under section 30C(e)(2),
such person will be treated as the taxpayer responsible for satisfying
the recordkeeping and reporting requirements of Sec. 1.45-12.
(d) Examples. The following examples illustrate the rules of this
section.
(1) Example 1--(i) Facts. D owns and operates electric charging
stations. In
[[Page 76780]]
Year 1, D places in service five chargers, each with one charging port,
on Parcel 1. In the same year, D also places in service three chargers,
each with one charging port, on Parcel 2. Parcel 1 and Parcel 2 are a
mile apart from each other. D submits a single environmental permit
covering both charging stations and obtains financing pursuant to the
same loan agreement. D meets the requirements of section 30C(g) and
this section (that is, the PWA requirements) for the chargers installed
on Parcel 1 but does not meet the PWA requirements for the chargers
installed on Parcel 2. The chargers installed on Parcel 1 and Parcel 2
are depreciable property and meet all other requirements to be 30C
property.
(ii) Analysis. Under paragraph (b)(2) of this section, the chargers
placed in service on Parcel 1 are treated as a separate 30C project
from the chargers placed in service on Parcel 2 because the properties
are not on contiguous piece of land. Therefore, under Sec. 1.30C-
2(a)(2)(ii), D is eligible for a credit of 30 percent of the cost of
the five chargers placed in service on Parcel 1, but only 6 percent of
the cost of the three chargers placed in service on Parcel 2 under
Sec. 1.30C-2(a)(2)(i).
(2) Example 2--(i) Facts. The facts are the same as paragraph
(d)(1) of this section (Example 1), except that Parcel 1 and Parcel 2
are contiguous pieces of land.
(ii) Analysis. Under paragraph (b)(2) of this section, the chargers
installed on Parcel 1 and Parcel 2 are treated as a single 30C project
because they are constructed on a contiguous piece of land, are owned,
and operated by a single taxpayer, placed in service by a single
taxpayer in a single year, described in a common environmental permit,
and financed pursuant to the same loan agreement. Therefore, because D
did not meet the PWA requirements with respect to the chargers placed
in service in parcel 2, D is eligible for only the 6 percent credit for
both the parcel 1 and parcel 2 property under Sec. 1.30C-2(a)(2)(i).
(e) Applicability date. This section applies to property placed in
service in taxable years ending after [date of publication of final
regulations in the Federal Register].
0
Par. 4. Section 1.30C-4 is added to read as follows:
Sec. 1.30C-4 Special rules.
(a) No credit allowable in certain circumstance--(1) Property used
outside the United States. Except as provided in paragraph (a)(2) of
this section, pursuant to sections 30C(e)(3) and 50(b)(1) of the Code,
no section 30C credit is allowable with respect to any property placed
in service for use predominantly outside the United States.
(2) Property placed in service in a United States territory.
Pursuant to sections 30C(e)(3), 50(b)(1) and 168(g)(4)(G) of the Code,
paragraph (a)(1) of this section does not apply to 30C property that is
owned by a domestic corporation or by a United States citizen (other
than a citizen entitled to the benefits of section 931 or 933 of the
Code) and that is used predominantly in a territory of the United
States by such a corporation or such a citizen, or by a corporation
created or organized in, or under the law of, a territory of the United
States.
(3) Section 179. No section 30C credit is allowable with respect to
the portion of the cost of any property taken into account under
section 179 of the Code.
(b) Recapture--(1) In general. The rules in this paragraph (b)
provide for recapturing the benefit of any allowable section 30C credit
with respect to any property that ceases to be property eligible for
such credit. If a recapture event occurs with respect to a taxpayer's
30C property, the taxpayer must include the recapture amount in taxable
income under chapter 1 of the Code for the taxable year in which the
recapture event occurs (recapture year).
(2) Recapture event. A recapture event occurs if, within three
years of the property being placed in service--
(i) The taxpayer claiming the section 30C credit modifies the
property such that the property no longer qualifies as 30C property;
(ii) Unless the property is subject to section 6417(d)(2)(B) of the
Code, the depreciable property (other than apportioned-use property)
ceases to be used predominantly in a trade or business (that is, 50
percent or more of the use of the 30C property in a taxable year is for
use other than in a trade or business);
(iii) For apportioned-use property, the 30C property completely
ceases to be used in a trade or business, but continues to be used for
personal use; or
(iv) The taxpayer claiming the section 30C credit sells or disposes
of the 30C property and the taxpayer knows or has reason to know that
the property will be used in a manner described in paragraph (b)(2)(i)
or (ii) of this section. Any other sale or disposition (including a
disposition by reason of an accident or other casualty) of 30C property
is not a recapture event.
(3) Property placed in service in a location that ceases to be in a
qualified census tract. 30C property is not subject to the recapture
provisions of this paragraph (b) solely because it is placed in service
in a location that subsequently ceases to be in a qualified census
tract.
(4) Recapture amount--(i) In general. The recapture amount is
generally equal to the benefit of the section 30C credit allowable
multiplied by a fraction, the numerator of which is three minus the
number of years prior to, but not including, the recapture year, and
the denominator of which is three.
(ii) Special rule for apportioned-use property. For purposes of the
calculation described in paragraph (b)(4)(i) of this section with
respect to apportioned-use property, the benefit of the section 30C
credit is equal to the difference between the credit claimed by the
taxpayer and the credit that would have been allowed if the
apportioned-use property were used solely for personal use under Sec.
1.30C-2(a)(2)(iii) (as limited by Sec. 1.30C-2(a)(4)(i)(B)).
(5) Basis adjustment. As of the first day of the recapture year,
the basis of the 30C property is increased by the recapture amount. For
30C property that is of a character that is subject to an allowance for
depreciation, including property subject to section 6417(d)(2)(B), this
increase in basis is recoverable over its remaining recovery period
beginning as of the first day of the taxable year in which the
recapture event occurs.
(c) Property used by a tax-exempt or governmental entity--(1) In
general. Except as provided in paragraph (c)(2) of this section, if a
person sells 30C property, the use of which is described in section
50(b)(3) or (4) (generally, property used by certain tax-exempt
organizations, governmental entities, or foreign persons or entities),
such person or entity purchasing the property uses the property as
described in section 50(b)(3) or (4), the property is not subject to a
lease, and the seller clearly discloses to the person or entity using
such property in a document the amount of any credit allowable under
section 30C(a) with respect to such property (determined without regard
to section 30C(d)) and that the seller intends to claim such credit,
then the seller is treated as the taxpayer that placed such property in
service. For purposes of section 30C(d), property to which this
paragraph (c)(1) applies will be treated as of a character subject to
an allowance for depreciation.
(2) Interaction with section 6417. If the person or entity using
30C property in a manner that would otherwise be considered as
described in section 50(b)(3) or (4) notifies the seller in writing of
an intent to make an elective payment election pursuant to section
6417(a) with respect to the section 30C
[[Page 76781]]
credit, then the use of the 30C property is treated as not being
described in section 50(b)(3) or (4) for purposes of paragraph (c)(1)
of this section. As a result, paragraph (c)(1) will not apply, meaning
that the seller will not be treated as having placed the 30C property
in service and cannot claim any credit allowable under section 30C(a)
with respect to such property. The section 30C credit will only be
allowed to one taxpayer for the same 30C property.
(d) Dual-use property--(1) Dual use property used for dispensing or
storing qualified alternative fuel and conventional fuel. In the case
of dual-use property that is used to store and/or dispense both
qualified alternative fuel and conventional fuel, the cost of the dual-
use property is taken into account in computing a taxpayer's section
30C credit only to the extent such cost exceeds the cost of an
equivalent conventional refueling property. For purposes of this
paragraph (d)(1), equivalent conventional refueling property is
conventional refueling property that is not used to store and/or
dispense qualified alternative fuel but is otherwise comparable to the
dual-use property and can store and/or dispense the same amount of
conventional fuel as the dual-use property.
(2) Qualified alternative fuel storage. In the case of dual-use
property that is used both to store qualified alternative fuel that is
dispensed into the fuel tanks of motor vehicles at the location of the
storage facility and to store fuel that is transported to other
locations, the cost of the dual-use property is taken into account in
computing a taxpayer's section 30C credit only to the extent such cost
exceeds the cost of a storage facility that is equivalent to the dual-
use property except that it is used for the sole purpose of storing
qualified alternative fuel that is transported to other locations and
can store the same amount of qualified alternative fuel as the dual-use
property stores for transport to other locations.
(3) Dual use property used to store or transmit electricity for
charging a motor vehicle and for other purposes. In the case of dual-
use property that is used to store or transmit electricity both to
charge a motor vehicle and for purposes other than charging a motor
vehicle, the cost of the dual-use property is taken into account in
computing the section 30C credit only to the extent such cost exceeds
the cost of equivalent property used for purposes other than charging a
motor vehicle.
(4) Example--(i) Facts. X, a qualified alternative fuel wholesaler
and retailer, owns and operates retail qualified alternative fuel
filling stations. X maintains a regional hub where it stores qualified
alternative fuel that it transports to its retail filling stations,
using tanker trucks, for sale to customers. In 2024, X places in
service a new storage tank to store qualified alternative fuel and a
new fuel dispenser at its regional hub. X uses the new fuel dispenser
to fill the fuel tanks of its tanker trucks (meaning it uses the fuel
to power the tanker trucks in addition to transporting the fuel to
retail locations). Because the amount of fuel used to power the tanker
trucks is minimal compared to the fuel transported to the retail
locations, the storage tank has the same capacity as the tank that
would have been used for the sole purpose of storing the qualified
alternative fuel that is supplied to X's customers. X's regional hub is
in a non-urban area census tract as described in Sec. 1.30C-2(c)(3).
(ii) Analysis. The storage tank and dispenser are 30C property
within the meaning of Sec. 1.30C-1(b)(1). Specifically, they are
refueling property within the meaning of Sec. 1.30C-1(b)(1)(i)(A)
because they are used to store and dispense qualified alternative fuel
into the fuel tanks of X's fuel tanker trucks. Additionally, the
storage tank and dispenser meet the other requirements under Sec.
1.30C-1(b)(1)(iii) because they are of a character subject to an
allowance for depreciation (because X uses them in its trade or
business), the original use of the property began with X, and X placed
the property in service in an eligible census tract. However, the
storage tank is dual-use property described in paragraph (d)(2) of this
section because it is used both to store qualified alternative fuel
that is dispensed into the fuel tanks of motor vehicles at the location
of the storage facility (that is, the fuel used to power the tanker
trucks) and to store fuel that is transported to other locations. Under
paragraph (d)(2), the cost of the storage tank is taken into account in
computing the section 30C credit only to the extent that cost exceeds
the cost of the storage tank that would have been used for the sole
purpose of storing the qualified alternative fuel that is transported
to X's retail filling stations. Because no increase in the capacity of
the storage tank is needed, none of the storage tank's cost is taken
into account in computing the amount of the section 30C credit.
(e) Applicability date. This section applies to property placed in
service in taxable years ending after [date of publication of final
regulations in the Federal Register].
0
Par. 5. Section 1.48-9, as proposed to be revised at 88 FR 82188
(November 22, 2023), is further amended by adding paragraph (e)(10)(vi)
to read as follows:
Sec. 1.48-9 Definition of energy property.
* * * * *
(e) * * *
(10) * * *
(vi) Property primarily used in the transportation of goods or
individuals and not for the production of electricity. Energy storage
property is primarily used in the transportation of goods or
individuals and not for the production of electricity, and therefore is
not energy storage technology eligible for the section 48 credit, if a
credit is claimed under section 30C for such property.
* * * * *
0
Par. 6. Section 1.48E-0, as proposed to be added at 89 FR 47792 (June
3, 2024), is further amended by adding an entry for Sec. 1.48E-
2(g)(6)(iv), in numerical order, to read as follows:
Sec. 1.48E-0 Table of contents.
* * * * *
Sec. 1.48E-2 Qualified investments in qualified facilities and EST
for purposes of section 48E.
* * * * *
(g) * * *
(6) * * *
(iv) Property primarily used in the transportation of goods or
individuals and not for the production of electricity.
* * * * *
0
Par. 7. Section 1.48E-2, as proposed to be added at 89 FR 47792 (June
3, 2024), is further amended by adding paragraph (g)(6)(iv) to read as
follows:
Sec. 1.48E-2 Qualified investments in qualified facilities and EST
for purposes of section 48E.
* * * * *
(g) * * *
(6) * * *
(iv) Property primarily used in the transportation of goods or
individuals and not for the production of electricity. Energy storage
property is primarily used in the transportation of goods or
individuals and not for the production of electricity, and therefore is
not EST eligible for the section 48E credit, if a credit is claimed
under section 30C for such property.
* * * * *
0
Par. 8. Section 1.6417-0 is amended by revising the entry for Sec.
1.6417-6(e) to read as follows:
Sec. 1.6417-0 Table of contents.
* * * * *
Sec. 1.6417-6 Special rules.
* * * * *
(e) Applicability dates.
[[Page 76782]]
0
Par. 9. Section 1.6417-6 is amended by:
0
1. Adding two sentences to the end of paragraph (b)(1).
0
2. Revising paragraph (e).
The addition and revision read as follows:
Sec. 1.6417-6 Special rules.
* * * * *
(b) * * *
(1) * * * For purposes of this paragraph (b)(1), if an applicable
credit is subject to section 50, then section 50 applies without regard
to section 50(b)(3) and (b)(4)(A)(i). If another provision of the Code
contains a basis reduction and/or recapture provision outside of
section 50 that impacts the available credit (such as sections 30C(e),
45Q(f)(4), and 48(a)(10)), then the rules of that provision of the Code
and the regulations issued under that provision of the Code apply,
except that any applicable credit continues to be determined without
regard to section 50(b)(3) and (4)(A)(i) and by treating any property
with respect to which such credit is determined as used in a trade or
business of the applicable entity, consistent with section 6417(d)(2)
and Sec. 1.6417-2(c).
* * * * *
(e) Applicability dates--(1) In general. Except as provided in
paragraph (e)(2) of this section, this section applies to taxable years
ending on or after March 11, 2024. For taxable years ending before
March 11, 2024, taxpayers, however, may choose to apply the rules of
Sec. Sec. 1.6417-1 through 1.6417-4 and this section, provided the
taxpayers apply the rules in their entirety and in a consistent manner.
(2) Paragraph (b)(1). The second and third sentences of paragraph
(b)(1) of this section apply to property placed in service in taxable
years ending after [date of publication of final regulations in the
Federal Register].
0
Par. 10. Section 1.6418-0 is amended under the heading Sec. 1.6418-5
by:
0
1. Redesignating the entries for (g) through (j) as (h) through (k);
0
2. Adding new entry (g); and
0
3. Revising newly redesignated entry (k).
The addition and revision read as follows:
Sec. 1.6418-0 Table of contents.
* * * * *
Sec. 1.6418-5 Special rules.
* * * * *
(g) Notification and impact of recapture under section
30C(e)(5).
* * * * *
(k) Applicability dates.
0
Par. 11. Section 1.6418-5 is amended by:
0
1. Revising paragraph (c).
0
2. Redesignating paragraphs (g) through (j) as paragraphs (h) through
(k), respectively.
0
3. Adding new paragraph (g).
0
4. Revising newly redesignated paragraph (k).
The revision and addition read as follows:
Sec. 1.6418-5 Special rules.
* * * * *
(c) Basis reduction rules--(1) Section 50(c) basis reduction. In
the case of any transfer election under Sec. 1.6418-2 or Sec. 1.6418-
3 with respect to any specified credit portion described in Sec.
1.6418-1(c)(2)(ix) through (xi), section 50(c) will apply to the
applicable investment credit property (as defined in section
50(a)(6)(A)) as if such credit was allowed to the eligible taxpayer.
(2) Section 30C(e)(1) basis reduction. In the case of any transfer
election under Sec. 1.6418-2 or Sec. 1.6418-3 with respect to any
specified credit portion described in Sec. 1.6418-1(c)(2)(i), section
30C(e)(1) will apply to the 30C property as defined in Sec. 1.30C-
1(b)(1) as if such credit was allowed to the eligible taxpayer.
* * * * *
(g) Notification and impact of recapture under section 30C(e)(5)--
(1) In general. In the case of any election under Sec. 1.6418-2 or
Sec. 1.6418-3 with respect to any specified credit portion described
in Sec. 1.6418-1(c)(2)(i), if, during any taxable year, a recapture
event as described in Sec. 1.30C-4(b)(2) occurs with respect to a 30C
property as defined in Sec. 1.30C-1(b)(1) within three years of being
placed in service, such eligible taxpayer and the transferee taxpayer
must follow the notification process in paragraph (g)(2) of this
section with recapture impacting the transferee taxpayer as described
in paragraph (g)(3) of this section.
(2) Notification requirements. The notification requirements for
the eligible taxpayer and the transferee taxpayer are the same as for
an eligible taxpayer and transferee taxpayer that must report notice of
the occurrence of a recapture event and notice of the recapture amount
as described in paragraphs (d)(2)(i) and (ii) of this section,
respectively, except that the recapture amount that must be computed is
defined in Sec. 1.30C-4(b)(4).
(3) Impact of recapture--(i) Section 30C(e)(5) recapture event. The
transferee taxpayer is responsible for any amount of tax increase under
section 30C(e)(5) and Sec. 1.30C-4(b)(4) upon the occurrence of a
recapture event under Sec. 1.30C-4(b), provided that if an eligible
taxpayer retains any amount of an eligible credit determined with
respect to 30C property directly held by the eligible taxpayer, the
amount of the tax increase under section 30C(e)(5) and Sec. 1.30C-
4(b)(4) that the eligible taxpayer is responsible for is equal to the
recapture amount multiplied by a fraction, the numerator of which is
the total credit amount that the eligible taxpayer retained, and the
denominator of which is the total credit amount determined for the
eligible credit property. The amount of the tax increase under section
30C(e)(5) that the transferee taxpayer is responsible for is equal to
the recapture amount multiplied by a fraction, the numerator of which
is the specified credit portion transferred to the transferee taxpayer,
and the denominator of which is the total credit amount determined for
the eligible credit property.
(ii) Impact of section 30C(e)(5) recapture event on basis of 30C
property held by eligible taxpayer. The eligible taxpayer must increase
the basis of the 30C property as defined in Sec. 1.30C-1(b)(1) (as of
the first day of the taxable year in which the recapture event occurs)
by an amount equal to the recapture amount provided to the eligible
taxpayer by the transferee taxpayer under paragraph (g)(2) of this
section and the recapture amount on any credit amounts retained by the
eligible taxpayer in accordance with section 30C(e)(5) and Sec. 1.30C-
4(b).
* * * * *
(k) Applicability date--(1) In general. Except as provided in
paragraph (k)(2) of this section, this section applies to taxable years
ending on or after April 30, 2024. For taxable years ending before
April 30, 2024, taxpayers, however, may choose to apply the rules of
this section and Sec. Sec. 1.6418-1 through 1.6418-3 provided the
taxpayers apply the rules in their entirety and in a consistent manner.
(2) Paragraphs (c)(2) and (g). Paragraphs (c)(2) and (g) of this
section apply to property placed in service in taxable years ending
after [date of publication of final regulations in the Federal
Register].
Douglas W. O'Donnell,
Deputy Commissioner.
[FR Doc. 2024-20748 Filed 9-18-24; 8:45 am]
BILLING CODE 4830-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 19, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.