On February 19, 2020, the US Internal Revenue Service ("IRS") issued IRS Notice 2020-12 (the "Notice") and Revenue Procedure 2020-12 (the "Revenue Procedure") to address two key aspects of the carbon capture tax credit (the "Carbon Credit") under section 45Q of the Internal Revenue Code of 1986 (the "Code"). Specifically, the Notice provides guidance with respect to the "start of construction" requirement under the Code, and the Revenue Procedure establishes a safe harbor under which partnership allocations of the Carbon Credit will be respected. Although the new guidance is largely similar to corresponding guidance issued with respect to the production tax credit for wind energy, the investment tax credit for solar energy and the historic rehabilitation tax credit, there are some notable differences that appear to reflect industry-specific concerns raised by stakeholders. This Legal Update provides background and further detail on the Notice and the Revenue Procedure.
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.