Category — Tax, Structure & Financing

 On October 20, 2011, the California Air Resource Board (“CARB”) announced the adoption of the final cap-and-trade regulation, which establishes a statewide limit on the production of greenhouse gas emissions. 

The regulation aims to reduce overall greenhouse emissions in California to the 1990-level by 2020.  [Read more →]

After receiving numerous inquiries, the California Board of Equalization (BOE) recently issued proposed guidelines for administering a statutory exclusion from real property tax assessment for active solar energy systems constructed on building rooftops or on land. The guidelines should settle months of industry uncertainty over the availability of the exclusion for new solar projects where the form of permanent financing is a sale-leaseback or a partnership flip. [Read more →]

The IRS has taken the position that in the course of an audit of a taxpayer’s return, it has the authority to challenge the amount of a Section 1603 Treasury cash grant previously paid to the taxpayer in the year under audit. This comes as a surprise to many taxpayers who believed that once paid by Treasury, the IRS did not have audit jurisdiction over a cash grant payment. [Read more →]

Owners, and in some cases, lessees, of qualified renewable energy projects are eligible for either an investment tax credit (ITC) equal to 30% of the tax basis for the project, or until the end of this year, a cash grant paid directly by Treasury in the same amount. The ITC is claimed on the taxpayer’s tax return, and eligibility for the credit is subject to normal IRS audit procedures. The cash grant (so-called “Section 1603 program”), on the other hand, is payable within 60 days after the taxpayer has submitted a properly completed application. A more complete summary of the Section 1603 program can be found here. [Read more →]

Three months after Congress enacted 100% expensing (bonus depreciation) for qualified property, the IRS has released its position on certain issues raised by the statute, Revenue Procedure 2011-26. Manufacturers and large capital investors have hesitated to close deals in the absence of this IRS guidance. The key issue addressed by the guidance is fixing the acquisition date for property constructed by or for the taxpayer. In a nutshell, self-constructed property is considered acquired when construction begins. With a limited exception, the IRS will not allow 100% expensing of costs incurred on projects started before September 9, 2010. For our background memorandum on bonus depreciation, please go here.

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