Internal Revenue Code:Sec. 45M. Energy Efficient Appliance Credit

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Location in Internal Revenue Code


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter A - Determination of Tax Liability
         PART IV - CREDIT AGAINST TAXES
          Subpart D - Business Related Credits

Statute


   SEC. 45M. ENERGY EFFICIENT APPLIANCE CREDIT.
       (a) General Rule-
         (1) IN GENERAL- For purposes of section 38, the energy efficient
              appliance credit determined under this section for any 
              taxable year is an amount equal to the sum of the credit
              amounts determined under paragraph (2) for each type of 
              qualified energy efficient appliance produced  by the 
              taxpayer during the calendar year ending with or within
              the taxable year.
         (2) CREDIT AMOUNTS- The credit amount determined for any type
              of qualified energy efficient appliance is--
           (A) the applicable amount determined under subsection (b) with
              respect to such type, multiplied by
           (B) the eligible production for such type.
       (b) Applicable Amount-
         (1) IN GENERAL- For purposes of subsection (a)--
           (A) DISHWASHERS- The applicable amount is the energy savings
                amount in the case of a dishwasher which--
            (i) is manufactured in calendar year 2006 or 2007, and
           (ii) meets the requirements of the Energy Star program which
                are in effect for dishwashers in 2007.
           (B) CLOTHES WASHERS- The applicable amount is $100 in the 
               case of a clothes washer which--
            (i) is manufactured in calendar year 2006 or 2007, and
           (ii) meets the requirements of the Energy Star program which
                are in effect for clothes washers in 2007.
           (C) REFRIGERATORS-
            (i) 15 PERCENT SAVINGS- The applicable amount is $75 in the
                  case of a refrigerator which--
              (I) is manufactured in calendar year 2006, and
             (II) consumes at least 15 percent but not more than 20
                  percent less kilowatt hours per year than the 2001 
                  energy conservation standards.
           (ii) 20 PERCENT SAVINGS- The applicable amount is $125 in
                 the case of a refrigerator which--
              (I) is manufactured in calendar year 2006 or 2007, and
             (II) consumes at least 20 percent but not more than 25 
                 percent less kilowatt hours per year than the 2001
                 energy conservation standards.
          (iii) 25 PERCENT SAVINGS- The applicable amount is $175 
                 in the case of a refrigerator which--
              (I) is manufactured in calendar year 2006 or 2007, and
             (II) consumes at least 25 percent less kilowatt hours per
                   year than the 2001 energy conservation standards.
         (2) ENERGY SAVINGS AMOUNT- For purposes of paragraph (1)(A)--
           (A) IN GENERAL- The energy savings amount is the lesser of--
            (i) the product of--
              (I) $3, and
             (II) 100 multiplied by the energy savings percentage, or
           (ii) $100.
           (B) ENERGY SAVINGS PERCENTAGE- For purposes of subparagraph 
                (A), the energy savings percentage is the ratio of--
            (i) the EF required by the Energy Star program for 
                dishwashers in 2007 minus the EF required by the 
                Energy Star program for dishwashers in 2005, to
           (ii) the EF required by the Energy Star program for 
                dishwashers in 2007.
       (c) Eligible Production-
         (1) IN GENERAL- Except as provided in paragraphs (2),
              the eligible production in a calendar year with respect 
              to each type of energy efficient appliance is the excess of--
           (A) the number of appliances of such type which are produced
              by the taxpayer in the United States during such calendar
              year, over
           (B) the average number of appliances of such type which were
              produced by the taxpayer (or any predecessor) in the United 
              States during the preceding 3-calendar year period.
         (2) SPECIAL RULE FOR REFRIGERATORS- The eligible production in 
             a calendar year with respect to each type of refrigerator 
             described in subsection (b)(1)(C) is the excess of--
           (A) the number of appliances of such type which are produced
              by the taxpayer in the United States during such calendar
              year, over
           (B) 110 percent of the average number of appliances of such
              type which were produced by the taxpayer (or any predecessor)
              in the United States during the preceding 3-calendar year period.
        (d) Types of Energy Efficient Appliance- For purposes of this section,
             the types of energy efficient appliances are--
          (1) dishwashers described in subsection (b)(1)(A),
          (2) clothes washers described in subsection (b)(1)(B),
          (3) refrigerators described in subsection (b)(1)(C)(i),
          (4) refrigerators described in subsection (b)(1)(C)(ii), and
          (5) refrigerators described in subsection (b)(1)(C)(iii).
      (e) Limitations-
          (1) AGGREGATE CREDIT AMOUNT ALLOWED- The aggregate amount of credit
             allowed under subsection (a) with respect to a taxpayer for
             any taxable year shall not exceed $75,000,000 reduced by the 
             amount of the credit allowed under subsection (a) to the taxpayer
             (or any predecessor) for all prior taxable years.
          (2) AMOUNT ALLOWED FOR 15 PERCENT SAVINGS REFRIGERATORS- In the
             case of refrigerators described in subsection (b)(1)(C)(i), 
             the aggregate amount of the credit allowed under subsection (a)
             with respect to a taxpayer for any taxable year shall not 
             exceed $20,000,000.
          (3) LIMITATION BASED ON GROSS RECEIPTS- The credit allowed under
              subsection (a) with respect to a taxpayer for the taxable year
              shall not exceed an amount equal to 2 percent of the average
              annual gross receipts of the taxpayer for the 3 taxable years
              preceding the taxable year in which the credit is determined.
          (4) GROSS RECEIPTS- For purposes of this subsection, the rules
              of paragraphs (2) and (3) of section 448(c) shall apply.
      (f) Definitions- For purposes of this section--
          (1) QUALIFIED ENERGY EFFICIENT APPLIANCE- The term `qualified
              energy efficient appliance' means--      
               (A) any dishwasher described in subsection (b)(1)(A),
               (B) any clothes washer described in subsection (b)(1)(B), and
               (C) any refrigerator described in subsection (b)(1)(C).
          (2) DISHWASHER- The term `dishwasher' means a residential
              dishwasher subject to the energy conservation standards
              established by the Department of Energy.
          (3) CLOTHES WASHER- The term `clothes washer' means a residential
              model clothes washer, including a residential style coin 
              operated washer.
          (4) REFRIGERATOR- The term `refrigerator' means a residential
              model automatic defrost refrigerator-freezer which has an 
              internal volume of at least 16.5 cubic feet.
          (5) EF- The term `EF' means the energy factor established by 
              the Department of Energy for compliance with the Federal 
              energy conservation standards.
          (6) PRODUCED- The term `produced' includes manufactured.
          (7) 2001 ENERGY CONSERVATION STANDARD- The term `2001 energy
               conservation standard' means the energy conservation
               standards promulgated by the Department of Energy and
               effective July 1,2001.
       (g) Special Rules- For purposes of this section--
          (1) IN GENERAL- Rules similar to the rules of subsections (c), 
              (d), and (e) of section 52 shall apply.
          (2) CONTROLLED GROUP-
            (A) IN GENERAL- All persons treated as a single employer 
                under subsection (a) or (b) of section 52 or subsection
                (m) or (o) of section 414 shall be treated as a single producer.
            (B) INCLUSION OF FOREIGN CORPORATIONS- For purposes of 
                subparagraph (A), in applying subsections (a) and (b) of 
                section 52 to this section, section 1563 shall be applied
                without regard to subsection (b)(2)(C) thereof.
          (3) VERIFICATION- No amount shall be allowed as a credit under 
              subsection (a) with respect to
              which the taxpayer has not submitted such information or
              certification as the Secretary, in consultation with the 
              Secretary of Energy, determines necessary.


Sources


   Energy Policy Act of 2005, Sec. 1334, established IRC Sec. 45M.  Effective Date- 
   The amendments made by this section shall apply to appliances produced 
   after December 31, 2005. 

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