On the night of September 10, 2021, the House Ways and Means Committee released legislative text covering a range of green energy tax incentives, a bill that it hopes will be enacted through the budget reconciliation process and it expects to begin markup of on Tuesday, September 14. This Legal Update provides further detail on the bill, which would significantly boost investment in green energy and other emissions reductions and extend many tax credits that would provide substantial certainty for the renewable energy industry.

Several recent legislative proposals would expand or enact tax credits to support energy storage, including standalone energy storage systems. We have put together a comparison of the three primary proposals under discussion in Washington that could materially shape these federal income tax credits: the Biden Administration FY 2022 Budget, the Growing Renewable Energy and Efficiency Now Act of 2021 (GREEN Act) and the Clean Energy for America Act (introduced by the chairman of the Senate Finance Committee).  See the comparison in this Legal Update.

On August 10, 2021, the US Senate voted to pass the Infrastructure Investment and Jobs Act (the “IIJA”). The IIJA would provide a total of $1.2 trillion in federal investment in infrastructure, including an unprecedented level of federal investment in electric vehicles and electric vehicle charging infrastructure through the creation of new programs and grants and the expansion of existing programs. Read about those programs and grants in this Legal Update by my Mayer Brown colleagues Nadav C. Klugman, Mark C. Williams, Stephanie D. Wagner and Morenikeji R. Akinade.

On July 1, 2021, the US Internal Revenue Service released Revenue Ruling 2021-13 (the “Ruling”), which provides additional guidance on the definition of “carbon capture equipment” for purposes of the carbon capture tax credit under Section 45Q of the Internal Revenue Code of 1986, as amended. The Ruling also clarifies that a taxpayer need not own every piece of equipment within a single process train in order to claim the tax credit so long as the taxpayer owns at least one component. In addition, the Ruling provides helpful guidance on determining the placed-in-service date of the single process train for purposes of Section 45Q. Continue Reading IRS Ruling Provides Guidance on Carbon Capture Equipment and Section 45Q Credit

On June 29, 2021, the US Internal Revenue Service (the “IRS”) released Notice 2021-41, extending and enhancing previous relief given by the IRS pursuant to Notice 2020-41 on the start-of-construction rules for the production tax credit and energy investment tax credit. The new notice extends the continuity safe harbor for projects that began construction in calendar years 2016 through 2020 and relaxes the continuity requirement for projects that do not satisfy the continuity safe harbor.

Continue Reading IRS Extends Start-of-Construction Relief for Renewables in Light of Continuing Effects of COVID-19

Section 30D of the US Internal Revenue Code (“IRC”) provides business and individual taxpayers that purchase new qualified plug-in electric drive motor vehicles (“EVs”), including passenger vehicles and light trucks, with a nonrefundable tax credit. Section 30C of the IRC provides a nonrefundable investment tax credit equal to 30 percent of the cost of alternative fuel vehicle refueling property, which includes EV charging stations and hydrogen refueling stations. There are currently three primary proposals under discussion in Washington that could materially change these federal income tax credits. This Legal Update compares key aspects of these proposals. The three proposals are the Biden Administration FY 2022 Budget, the GREEN Act and the Clean Energy for America Act.

Continue Reading Electric Vehicle and Charging Station Tax Credits: Assessing Proposed Changes