Company: REX
Filing Date: 2025-12-04
Form Type: 10-Q
Source: 0000930413-25-003566
Chunk: 124

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-12-04
Form: 10-Q
Item: Part I, Item 2
Chunk 124
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 metric ton,
under section 45Q. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available.

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 tax credit if the prevailing wage and apprenticeship requirements are met. 45Q
credits are available for 12 years from the time CO2 injection begins.

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
a Notice of Proposed Adjustments from the IRS that they have denied 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 at audit. We plan to continue vigorously defending these credits
in appeals.

31

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 August
2025, the United States exports increased approximately 14% compared to 2024. In 2024 and 2023, an estimated 12.2 and 10.8 million
metric tons, respectively, of distillers