Section 30C Alternative Fuel Vehicle Refueling Property Credit

DEPARTMENT OF THE TREASURY <SUBAGY>Internal Revenue Service</SUBAGY> <CFR>26 CFR Part 1</CFR> <DEPDOC>[REG-118269-23]</DEPDOC> <RIN>RIN 1545-BR19</RIN> <SUBJECT>Section 30C Alternative Fuel Vehicle Refueling Property Credit</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Internal Revenue Service (IRS), Treasury. <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Written or electronic comments and requests for a public hearing must be received by November 18, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Commenters are strongly encouraged to submit public comments electronically via the Federal eRulemaking Portal at <E T="03">https://www.regulations.gov</E> (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 Once submitted to the Federal eRulemaking Portal, comments cannot be edited or withdrawn.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. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> 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 <E T="03">publichearings@irs.gov</E> (preferred). </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Authority</HD> 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. <HD SOURCE="HD1">Background</HD> <HD SOURCE="HD2">I. Overview</HD> 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). <HD SOURCE="HD2">II. Credit Amount and Limitation</HD> 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. <E T="03">See</E> 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). <HD SOURCE="HD2">III. Qualified Alternative Fuel Vehicle Refueling Property</HD> <HD SOURCE="HD3">A. In General</HD> 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 th ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 185k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━