Advanced Energy Manufacturing Tax Credit (48C)
Advanced Energy Manufacturing Tax Credit (48C)
Shepherd Advisors can assist manufacturers in receiving a 30% tax credit for qualifying investments in advanced energy projects, under a program jointly administered by the U.S. Department of Energy (DOE) and the U.S. Department of Treasury.
Background
The American Reinvestment and Recovery Act of 2009 (ARRA) authorizes the Department of Treasury to award $2.3 billion in tax credits for qualified investments in advanced energy projects, to support new, expanded, or re-equipped domestic manufacturing facilities. The Advanced Energy Manufacturing Tax Credit (MTC) provides a 30% credit for qualifying investments.
The application process consists of two submissions -- a Preliminary Application due September 16, and a Final Application due October 16.
The DOE and Internal Revenue Service (IRS) will review and make determinations of the eligibility and merit of MTC applications. Applicants will receive tax credits based on the expected commercial viability of their project and the ranking of their project relative to other projects. Rankings will be based on: expected job creation, reduction of air pollutants and greenhouse gas emissions, technological innovation, and ability to have the project up and running quickly. The four evaluation criteria are equally weighted. Technology, geographic and project size diversity, and regional economic development will also be considered when rating projects. Projects must be completed within 4 years of their tax credit acceptance. Eligible investment credits cover future expenditures and do not award past investment.
Why Work with Shepherd?
The application requirements are comprehensive and complex. They involve extensive data collection (from both internal and external sources), data interpretation and manipulation, quantitative data analysis/modeling, and substantial narrative creation (e.g. business plan).
Shepherd will help manufacturers streamline the application process and submit high quality applications. We will work with you to confirm eligibility, collect and synthesize required data, perform required quantitative analyses, and draft narratives. Shepherd will support your navigation through the process, ensuring that your submissions are delivered on time and according to specification.
Timeline
| 9/16/2009 | Applicant submission of Preliminary Application to USDOE |
| 10/16/2009 | Applicant submission of Final Application to DOE and Application for §48C Certification to IRS |
| 12/16/2009 | DOE completion of merit review of Final Applications; recommendation to IRS |
| 1/15/2010 | By this date IRS accepts or rejects Application for §48C Certification and notifies applicant, by letter, of its decision. If application is accepted, date of this letter will be treated as the "acceptance date." |
| 3/15/2010 | Applicant must execute a project agreement with IRS |
| 4/16/2010 | IRS executes and returns agreement to applicant |
| Within one year of Acceptance Date | Applicant must provide evidence to IRS that certification requirements have been met. IRS will then decide whether or not to certify the project and notify the applicant, by letter, of that decision. If the IRS certifies the project, the date of this letter is the "date of issuance of certification." |
| Within three years of Date of Issuance of Certification | Applicant must place project in service |
Eligibility
A qualified investment for any taxable year is the basis of eligible property that is placed in service by the taxpayer during such taxable year and is part of a qualifying advanced energy project.
A qualifying advanced energy project is one that re-equips, expands, or establishes a manufacturing facility for the production of specified advanced energy property (SAEP), or property that after further manufacture will become SAEP. SAEP includes:
- Property designed for use in the production of energy from the sun, wind, geothermal deposits, or other renewable resources;
- Fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric motor vehicles;
- Electric grids to support the transmission of intermittent sources of renewable energy, including property for the storage of such energy;
- Property designed to capture and sequester carbon dioxide and sequester carbon dioxide emissions;
- Property designed to refine or blend renewable fuels (but not fossil fuels) or to produce energy conservation technologies (including energy-conserving lighting technologies and smart grid technologies);
- New plug-in electric drive motor vehicles, qualified plug-in electric vehicles, or components that are designed specifically for use with such vehicles, including electric motors, generators,, and power control units or;
- Other property designed to reduce greenhouse gas emissions as may be determined by the IRS.
Eligible property is property necessary for the production of SAEP and is tangible personal property or other tangible property used as an integral part of the qualifying advanced energy project (e.g. manufacturing equipment). NOTE: A building or its structural components are NOT eligible property.
Placed in service means placed in a condition or state of readiness and availability for the intended purpose.
Deliverables
Preliminary Application for DOE Recommendation (9/16/2009). Brief, straightforward document providing basic applicant information and summary level project information.
Final Application for DOE Recommendation (10/16/2009). Comprehensive document including:
- Executive Summary
- Demonstration of Eligibility
- Advanced Energy Project Qualification
- Commercial Viability
- Business Plan
- Financial Plan
- Performance against Evaluation Criteria (including underlying calculations/quantitative analysis)
- Domestic Job Creation
- Impact on Air Pollution and Emissions of Greenhouse Gases
- Technological Innovation and Cost Reduction
- Project Schedule and Time to Completion
- Supporting Documents/Appendices
- Applicant Data Input Spreadsheet
Application for 48C Certification (10/16/2009)
- Taxpayer information
- Contact person information
- One electronic version (CD) of Final Application
Requirements for Certification (within one year of IRS acceptance for certification)
- Taxpayer has received all federal, state, and local permits, including environmental authorization or reviews necessary to commence construction of the project
- Taxpayer has completed all the steps that must be accomplished during the one-year period beginning on the "acceptance date" in order for for the project to be placed in service within three years of the "date of issuance of certification."
- Taxpayer must comply with signature and declaration requirements
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