Source: https://www.andretaxco.com/adv-nuclear-production-credit
Timestamp: 2020-07-08 06:47:18
Document Index: 146746976

Matched Legal Cases: ['§ 45', '§ 45', '§ 45', '§ 45', '§ 45', '§ 45', '§ 45', '§ 45']

Advanced Nuclear Production Tax Credit | AndreTaxCo, PLLC
Advanced Nuclear Production Tax Credit
*Service Action & Application Required: Application & Approval Due Before 12/31/2014
On or before December 31, 2014, the IRS accepted or rejected the taxpayer(s) applications and notified the taxpayer(s), by letter, of its decision to award the Credit for Production from Advanced Nuclear Facilities. If the taxpayer’s application was accepted, the acceptance letter would state the amount of the national megawatt capacity limitation allocated to the facility.
The IRS then allocated the national megawatt capacity limitation only to qualifying facilities for which the applications are submitted in accordance with IRS Notice 2006-40.
As such, the credit may not be available to claim unless previously approved before the stated deadline of 12/31/2014 or through the sale/purchased from an unrelated party of the Advanced Nuclear Facilities Credit. See below or IRS Notice 2006-40 for additional details.
Section 45J was enacted by section 1306 of the Energy Policy Act of 2005, Public Law 109-58 (199 Stat. 594). Section 45J permits a taxpayer to claim a credit for electricity that the taxpayer (1) produces at an advanced nuclear power facility during the eight-year period beginning when the facility is placed in service and (2) sells to an unrelated person (qualifying electricity).
Under § 45J(d), an advanced nuclear power facility is a nuclear facility that meets all of the following requirements:
(2) The facility is owned by the taxpayer. Commission after December 31, 1993 (and such design or a substantially similar design of comparable capacity was not approved on or before that date).
(3) The reactor design for the facility is approved by the Nuclear Regulatory
Under § 45J(b)(1), a taxpayer may claim a credit for qualifying electricity produced at an advanced nuclear power facility only if part of the national megawatt capacity limitation has been allocated to the facility.
Under § 45J(b)(1) and (c), the credit allowed for a taxable year with respect to the qualified electricity produced at an advanced nuclear power facility is computed under the following rules:
(2) The credit percentage is computed for the facility. If the nameplate capacity of the facility exceeds the national megawatt capacity limitation allocated to the facility, the credit percentage for the facility is determined by dividing the national capacity limitation allocated to the facility by its nameplate capacity. If the nameplate capacity of the facility does not exceed the national megawatt capacity limitation allocated to the
facility, the credit percentage for the facility is 100 percent.
(3) The credit allowed is the lesser of
(a) the tentative credit for the facility multiplied by the credit percentage for the facility, or
(b) $125,000,000 per 1000 megawatts of national megawatt capacity limitation allocated to the facility.
Section 45J(b)(2) provides that the national megawatt capacity limitation is 6,000 megawatts. Section 45J(b)(3) requires the Secretary to allocate this national megawatt capacity limitation. Section 45J(b)(4) requires the Secretary to provide a certification process under which the Secretary, after consultation with the Secretary of Energy, shall approve and allocate the national megawatt capacity limitation.
ALLOCATION OF NATIONAL MEGAWATT CAPACITY LIMITATION
Allocation Limited to Qualifying Facilities. The Service will allocate the national megawatt capacity limitation only to advanced nuclear facilities (within the meaning of § 45J(d)(2)) that satisfy the requirements of "qualifying facilities". An advanced nuclear facility is a qualifying facility only if each of the following requirements is satisfied:
(1) An application for a construction/operating license for the facility is filed with the Nuclear Regulatory Commission on or before the later of
(i) December 31, 2007, or
(ii) the date on which the aggregate nameplate capacity of advanced nuclear facilities for which applications for a construction/operating license have been filed with the Nuclear Regulatory Commission first equals or exceeds 6,000 megawatts.
(2) Construction on the facility begins before January 1, 2014.
For this purpose, construction begins when a person who has applied for or been granted a combined license for an advanced nuclear facility initiates the pouring of safety-related concrete for the reactor building.
(3) The U.S. Department of Energy (DOE) provides a certification that the facility qualifies as an advanced nuclear facility, and that it is feasible for the facility to placed in service prior to January 1, 2021 (“DOE certification”).​
Sale to Unrelated Person. The credit under § 45J is allowed only for electricity that the taxpayer produces and sells to an unrelated person. Electricity will be treated as sold to an unrelated person for this purpose if the ultimate purchaser of the electricity is not related to the person that produces the electricity. The requirement of a sale to an unrelated person will be treated as satisfied in these circumstances even if the producer sells the electricity to a related person for resale by the related person to a person that is not related to the producer. For rules for determining whether a person is related to the producer of the electricity, see § 45(e)(4).
Effect of Grants, Tax-Exempt Bonds, Subsidized Energy Financing, and Other Credits.
The amount of the credit under § 45J is not reduced on account of any grants, tax-exempt bonds, subsidized energy financing, or other credits described in § 45(b)(3).
IRS Notice 2006-40 (Credit for Production from Advanced Nuclear Facilities)