Company: REX
Filing Date: 2025-09-02
Form Type: 10-Q
Source: 0000930413-25-002856
Chunk: 128

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-09-02
Form: 10-Q
Item: Part I, Item 2
Chunk 128
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45Q credit or the 45Z credit in periods in which both tax credits are available.

Signed into law on July 4, 2025, the OBBBA
introduced major revisions to clean energy tax credits. Key provisions include extending the 45Z credit through 2029, removing
the indirect land-use change penalty for crop-based feedstocks, limiting eligibility to feedstocks under the USMCA, imposing FEOC
restrictions, and prohibiting negative emissions rates except from animal manure. It also modified the language for 45Q tax credits
for facilities placed in service after the bill enactment but maintained the $85 per ton if the prevailing wage and apprenticeship
requirements are met.

Additionally, see “One Earth Energy,
LLC Carbon Sequestration and Plant Expansion” above for a discussion of certain uncertainties associated with our Illinois
carbon sequestration and plant expansion projects.

On August 10, 2017, we purchased, through
a 95.35% owned subsidiary, the entire ownership interest of an entity that owned a refined coal facility. We began operating the
refined coal facility immediately after the acquisition. As the plant was no longer eligible to receive federal production tax
credits beginning on November 18, 2021, we ceased operations on that date and subsequently sold the facility. The approximately
$58.2 million in federal production tax credits received through ownership of this facility remain under IRS audit. We have received
an Acknowledgement of Facts notice from the IRS that they intend to deny these tax credits. We intend to vigorously defend these
credits.

The Company claimed research and
experimentation tax credits for tax years 2014 – 2022 totaling $24.5 million. These credits have been a focus of the ongoing
IRS audit, in which the IRS has notified the Company the credits will be denied. We plan to vigorously defend these credits in appeals.

The United States exported an estimated 1.9
billion gallons of ethanol in 2024, up from approximately 1.4 and 1.3 billion gallons in 2023 and 2022, respectively. Through June
2025, the United States exported 1.1 billion gallons of ethanol, compared to 968 million gallons through June 2024. In 2024 and
2023, an estimated 12.2 and 10.8 million metric tons, respectively, of distillers grains were exported from the United States,
which represented approximately 37% and