tax credits

On December 1, the Department of Energy (DOE) and the Department of the Treasury (Treasury) published highly-anticipated proposed rules that will significantly impact China’s and other covered nations’ roles in the battery supply chain for electric vehicles (EVs) sold to U.S. consumers.  The proposed DOE Interpretive Rules and proposed Treasury Regulations interpret the term “foreign entity of concern” (FEOC) in the same manner for purposes of the Battery Manufacturing and Recycling Grant program under the Bipartisan Infrastructure Law and the EV credit under section 30D of the Internal Revenue Code introduced by the Inflation Reduction Act (IRA).  The proposed rules take a more nuanced approach than the proposed and final rules that appeared in the context of the CHIPS and Science Act over the past year (discussed here, here, and here), but nevertheless purport to adopt bright-line rules.  As we have previously noted, adopting a different approach to such term in section 30D is justified to balance the IRA’s dual policy goals of onshoring and “friendshoring” the U.S. EV battery supply chain while making credits sufficiently available to accelerate the electrification of the U.S. consumer vehicle fleet.Continue Reading The Biden Administration Unveils the Long-Waited Guidance on “Foreign Entity of Concern”

Last week, the U.S. Department of the Treasury (Treasury) and Internal Revenue Service (IRS) released a notice of proposed rulemaking (NPRM) that modifies the regulations applicable to the Energy Credit under Section 48 of the Internal Revenue Code (Code).  The NPRM also withdraws and repurposes portions of an August proposal on the rules governing the increased credit amount available for taxpayers satisfying prevailing wage and registered apprenticeship requirements established by the Inflation Reduction Act (IRA).  This post summarizes a few key aspects of the NPRM below:Continue Reading Department of the Treasury and IRS propose new guidance for the Section 48 Investment Tax Credit

Today, the Department of the Treasury and IRS made available for public inspection proposed regulations on the new clean vehicle credit under the Inflation Reduction Act of 2022, as codified in section 30D of the Internal Revenue Code.  These proposed regulations will be published in the Federal Register on April 17, 2023, and the due date for comments will be 60 days after the publication (or Friday, June 16, 2023).Continue Reading Much-Anticipated Proposed Regulations on the 30D EV Tax Credit Have Finally Arrived—but Leave a Key Question Unresolved

On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law, directing a record $370 billion toward clean energy investments.

Yesterday, the White House released a 182-page guidebook to the IRA entitled Building a Clean Economy.  John Podesta, Senior Advisor to the President for Clean Energy Innovation and Implementation, explains in

On October 5, 2022, the Treasury Department and the IRS issued notices requesting comments on different aspects of the energy tax benefits in the Inflation Reduction Act (“IRA”). All comments are due by Friday, November 4, either electronically on www.regulations.gov or alternatively by mail to the IRS. Written comments submitted after that date will be considered as long as such consideration will not delay the issuance of guidance.Continue Reading IRS issues notices requesting comments on IRA clean energy tax credits

In a series of prior blog posts, we previously highlighted the historic implications of the Inflation Reduction Act (IRA) for the U.S.’s international climate commitments, as well as for private companies navigating the energy transition.  Shortly after our series published, the Senate passed the IRA on Sunday August 7th with only minor modifications to the bill’s $369 billion in climate and clean energy spending.  Today, the House passed the IRA without any further changes, and soon hereafter President Biden is expected to sign it into law. 

However, this is only the beginning of the road; the IRA will have sweeping implications beyond the four corners of its pages.  In the coming months and years, we expect to see intense jockeying over agency rulemakings that will shape the IRA’s implementation, as well as determine its ultimate success as an energy policy.  Continue Reading House Passes Inflation Reduction Act, Marks a New Era for Climate Policy

The transportation sector constitutes the largest source of greenhouse gas emissions in the United States, and the Inflation Reduction Act (IRA) takes significant steps to transition the U.S. vehicle fleet to zero-emissions technology.  The proposed legislation takes a multi-faceted approach in doing so: it not only provides incentives for increased consumer use of electric vehicles, it also promotes domestic zero-emissions vehicle manufacturing. Continue Reading Inflation Reduction Act Shows Strong Support for the Electric Vehicle Sector and Domestic Supply Chains

Late on July 27, Sen. Joe Manchin and Senate Majority Leader Charles Schumer announced an agreement on the Inflation Reduction Act (IRA): a reconciliation package that implements prescription drug pricing reform, invests in Affordable Care Act health care subsidies, imposes a corporate minimum tax and improves tax enforcement, and—most relevant for this post—provides $369 billion to support energy production and reduce greenhouse gas emissions.Continue Reading Overview of the Inflation Reduction Act