Clarification given for “start of construction” for tax purposes in the U.S.
The White House in Washington, DC (source: flickr/ Tom Lohdan, creative commons)
Francisco Rojas
13 Aug 2014
In a Notice, the Internal Revenue Service (IRS) of the U.S. clarifies rules for the “start of construction”, which determines if a project can qualify for Production Tax Credits (PTC) or not.
Published by law firm Akin Gump Strauss Hauer & Feld LLP on Lexology.com, an article provides details on a notice by the Internal Revenue Service of the U.S.
“Notice 2014-46, which clarifies the rules for a wind project to be deemed to have started construction in 2013 as is necessary to be eligible for production tax credits (PTC) or the investment tax credit (ITC). The notice is available here.
The new guidance is generally consistent with the industry’s requests for clarifications;1 however, it adds unanticipated complexity with respect to the transfer of grandfathered projects. Also, it provides rules that the industry did not request with respect to projects that fall short of meeting the safe-harbor of spending 5 percent of their total cost in 2013.
The applicability of the guidance is not limited to wind projects. It also applies to geothermal, biomass, landfill gas and some hydroelectric and ocean energy projects. Solar projects are not subject to the guidance and qualify for a 30 percent investment tax credit, so long as they are “placed in service” by the end of 2016.”
For details see link below.
Source: Lexology Website
