Internal Revenue Code:Sec. 45H. Credit for production of low sulfur diesel fuel

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Contents


Location


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter A - Determination of Tax Liability
         PART IV - CREDITS AGAINST TAXES

Statute


SEC. 45H. CREDIT FOR PRODUCTION OF LOW SULFUR DIESEL FUEL.

    (a) In General.--For purposes of section 38, the amount of the low 
sulfur diesel fuel production credit determined under this section with 
respect to any facility of a small business refiner is an amount equal 
to 5 cents for each gallon of low sulfur diesel fuel produced during the 
taxable year by such small business refiner at such facility.
    (b) Maximum Credit.--
       (1) In general.--The aggregate credit determined under 
        subsection (a) for any taxable year with respect to any facility 
        shall not exceed--
          (A) 25 percent of the qualified costs 
                incurred by the small business refiner with respect to 
                such facility, reduced by
          (B) the aggregate credits determined under this 
                section for all prior taxable years with respect to such 
                facility.
       (2) Reduced percentage.--In the case of a small business 
        refiner with average daily domestic refinery runs for the 1-year 
        period ending on December 31, 2002, in excess of 155,000 
        barrels, the number of percentage points described in paragraph 
        (1) shall be reduced (not below zero) by the product of such 
        number (before the application of this paragraph) and the ratio 
        of such excess to 50,000 barrels.
    (c) Definitions and Special Rule.--For purposes of this section--
       (1) Small business refiner.--The term `small business 
        refiner' means, with respect to any taxable year, a refiner of 
        crude oil--
          (A) with respect to which not more than 1,500 
                individuals are engaged in the refinery operations of 
                the business on any day during such taxable year, and
          (B) the average daily domestic refinery run or 
                average retained production of which for all facilities 
                of the taxpayer for the 1-year period ending on December 
                31, 2002, did not exceed 205,000 barrels.
       (2) Qualified costs.--The term `qualified  
        costs' means, with respect to any facility, those costs paid or 
        incurred during the applicable period for compliance with the 
        applicable EPA regulations with respect to such facility, 
        including expenditures for the construction of new process 
        operation units or the dismantling and reconstruction of 
        existing process units to be used in the production of low 
        sulfur diesel fuel, associated adjacent or offsite equipment 
        (including tankage, catalyst, and power supply), engineering, 
        construction period interest, and sitework.
       (3) Applicable epa regulations.--The term `applicable EPA 
        regulations' means the Highway Diesel Fuel Sulfur Control 
        Requirements of the Environmental Protection Agency.
       (4) Applicable period.--The term `applicable period' 
        means, with respect to any facility, the period beginning on 
        January 1, 2003, and ending on the earlier of the date which is 
        1 year after the date on which the taxpayer must comply with the 
        applicable EPA regulations with respect to such facility or 
        December 31, 2009.
       (5) Low sulfur diesel fuel.--The term `low sulfur diesel 
        fuel' means diesel fuel with a sulfur content of 15 parts per 
        million or less.
    (d) Special Rule for Determination of Refinery Runs.--For purposes 
this section and section 179B(b), in the calculation of average daily 
domestic refinery run or retained production, only
refineries which on April 1, 2003, were refineries of the refiner or a 
related person (within the meaning of section 613A(d)(3)), shall be 
taken into account.
    (e) Certification.--
       (1) Required.--No <<NOTE: Deadline.>> credit shall be 
        allowed unless, not later than the date which is 30 months after 
        the first day of the first taxable year in which the low sulfur 
        diesel fuel production credit is determined with respect to a 
        facility, the small business refiner obtains certification from 
        the Secretary, after consultation with the Administrator of the 
        Environmental Protection Agency, that the taxpayer's qualified 
        costs with respect to such facility will result in 
        compliance with the applicable EPA regulations.
       (2) Contents of application.--An application for 
        certification shall include relevant information regarding unit 
        capacities and operating characteristics sufficient for the 
        Secretary, after consultation with the Administrator of the 
        Environmental Protection Agency, to determine that such 
        qualified costs are necessary for compliance with the 
        applicable EPA regulations.
       (3) Review period.--Any <<NOTE: Deadline.>> application 
        shall be reviewed and notice of certification, if applicable, 
        shall be made within 60 days of receipt of such application. In 
        the event the Secretary does not notify the taxpayer of the 
        results of such certification within such period, the taxpayer 
        may presume the certification to be issued until so notified.
       (4) Statute of limitations.--With respect to the credit 
        allowed under this section--
          (A) the statutory period for the assessment of any 
                deficiency attributable to such credit shall not expire 
                before the end of the 3-year period ending on the date 
                that the review period described in paragraph (3) ends 
                with respect to the taxpayer, and
          (B) such deficiency may be assessed before the 
                expiration of such 3-year period notwithstanding the 
                provisions of any other law or rule of law which would 
                otherwise prevent such assessment.
    (f) Cooperative Organizations.--
       (1) Apportionment of credit.--
          (A) In general.--In the case of a cooperative 
                organization described in section 1381(a), any portion 
                of the credit determined under subsection (a) for the 
                taxable year may, at the election of the organization, 
                be apportioned among patrons eligible to share in 
                patronage dividends on the basis of the quantity or 
                value of business done with or for such patrons for the 
                taxable year.
          (B) Form and effect of election.--An election 
                under subparagraph (A) for any taxable year shall be 
                made on a timely filed return for such year. Such 
                election, once made, shall be irrevocable for such 
                taxable year.
       (2) Treatment of organizations and patrons.--
          (A) Organizations.--The amount of the credit not 
                apportioned to patrons pursuant to paragraph (1) shall 
                be included in the amount determined under subsection 
                (a) for the taxable year of the organization.
          (B) Patrons.--The amount of the credit apportioned 
                to patrons pursuant to paragraph (1) shall be included
                in the amount determined under subsection (a) for the 
                first taxable year of each patron ending on or after the 
                last day of the payment period (as defined in section 
                1382(d)) for the taxable year of the organization or, if 
                earlier, for the taxable year of each patron ending on 
                or after the date on which the patron receives notice 
                from the cooperative of the apportionment.
       (3) Special rule.--If the amount of a credit which has 
        been apportioned to any patron under this subsection is 
        decreased for any reason--
          (A) such amount shall not increase the tax imposed 
                on such patron, and
          (B) the tax imposed by this chapter on such 
                organization shall be increased by such amount.
        The increase under subparagraph (B) shall not be treated as tax 
        imposed by this chapter for purposes of determining the amount 
        of any credit under this chapter or for purposes of section 55.
    (g) Election to Not Take Credit.--No credit shall be determined 
under subsection (a) for the taxable year if the taxpayer elects not to 
have subsection (a) apply to such taxable year.

Sources

      Pub.L. 108-357, Sec.339, dated October 22, 2004.

Miscellaneous


                             AMENDMENTS

2007 - P.L. 110-172

(2)(A) Section 45H, as amended by paragraph (1), is amended 
        by adding at the end the following new subsection:
    ``(g) Election to Not Take Credit.--No credit shall be determined 
under subsection (a) for the taxable year if the taxpayer elects not to 
have subsection (a) apply to such taxable year.''.
            (3)(A) Subsections (b)(1)(A), (c)(2), (e)(1), and (e)(2) of 
        section 45H (as amended by paragraph (1)) and section 179B(a) 
        are each amended by striking ``qualified capital costs'' and 
        inserting ``qualified costs''.
            (B) The heading of paragraph (2) of section 45H(c) is 
        amended by striking ``capital''.
          
(1)(A) Section 45H is amended by striking subsection (d) and 
        by redesignating subsections (e), (f), and (g) as subsections 
        (d), (e), and (f), respectively.

References


Personal tools