I.R.C. § 45H(a) In General —
For purposes of section 38, the amount of the low sulfur diesel fuel production credit determined under this
section with respect to any facility of a small business refiner is an amount equal
to 5 cents for each gallon of low sulfur diesel fuel produced during the taxable
year by such small business refiner at such facility.
I.R.C. § 45H(b) Maximum Credit
I.R.C. § 45H(b)(1) In General —
The aggregate credit determined under subsection (a) for
any taxable year with respect to any facility shall not exceed—
I.R.C. § 45H(b)(1)(A) —
25 percent of the qualified costs incurred by the small business refiner with respect
to such facility, reduced by
I.R.C. § 45H(b)(1)(B) —
the aggregate credits determined under this section for all prior taxable years
with respect to such facility.
I.R.C. § 45H(b)(2) Reduced Percentage —
In the case of a small business refiner with average daily domestic refinery runs
for the 1-year period ending on December 31, 2002, in excess of 155,000 barrels,
the number of percentage points described in paragraph (1) shall be reduced (not below zero) by the product of such number (before the application
of this paragraph) and the ratio of such excess to 50,000 barrels.
I.R.C. § 45H(c) Definitions And Special Rule —
For purposes of this section—
I.R.C. § 45H(c)(1) Small Business Refiner —
The term “small business refiner”
means, with respect to any taxable year, a refiner of crude oil—
I.R.C. § 45H(c)(1)(A) —
with respect to which not more than 1,500 individuals are engaged in the refinery
operations of the business on any day during such taxable year, and
I.R.C. § 45H(c)(1)(B) —
the average daily domestic refinery run or average retained production of which
for all facilities of the taxpayer for the 1-year period ending on December 31, 2002,
did not exceed 205,000 barrels.
I.R.C. § 45H(c)(2) Qualified Costs —
The term “qualified costs”
means, with respect to any facility, those costs paid or incurred during the applicable
period for compliance with the applicable EPA regulations with respect to such facility,
including expenditures for the construction of new process operation units or the
dismantling and reconstruction of existing process units to be used in the production
of low sulfur diesel fuel, associated adjacent or offsite equipment
(including tankage, catalyst, and power supply), engineering, construction period
interest, and sitework.
I.R.C. § 45H(c)(3) Applicable EPA Regulations —
The term “applicable EPA regulations”
means the Highway Diesel Fuel Sulfur Control Requirements of the Environmental Protection
Agency.
I.R.C. § 45H(c)(4) Applicable Period —
The term “applicable period”
means, with respect to any facility, the period beginning on January 1, 2003, and
ending on the earlier of the date which is 1 year after the date on which the taxpayer
must comply with the applicable EPA regulations with respect to such facility or
December 31, 2009.
I.R.C. § 45H(c)(5) Low Sulfur Diesel Fuel —
The term “low sulfur diesel fuel” means diesel fuel with a sulfur content of 15 parts
per million or less.
I.R.C. § 45H(d) Special Rule For Determination Of Refinery Runs —
For purposes of this section and section 179B(b), in the calculation of average daily domestic refinery run or retained production,
only refineries which on April 1, 2003, were refineries of the refiner or a related
person (within the meaning of section 613A(d)(3)), shall be taken into account.
I.R.C. § 45H(e) Certification
I.R.C. § 45H(e)(1) Required —
No credit shall be allowed unless, not later than the date which is 30 months after
the first day of the first taxable year in which the low sulfur diesel fuel production
credit is determined with respect to a facility, the small business refiner obtains
certification from the Secretary, after consultation with the Administrator of the
Environmental Protection Agency, that the taxpayer's qualified costs with respect
to such facility will result in compliance with the applicable EPA regulations.
I.R.C. § 45H(e)(2) Contents Of Application —
An application for certification shall include relevant information regarding unit
capacities and operating characteristics sufficient for the Secretary, after consultation
with the Administrator of the Environmental Protection Agency, to determine that
such qualified costs are necessary for compliance with the applicable EPA regulations.
I.R.C. § 45H(e)(3) Review Period —
Any application shall be reviewed and notice of certification, if applicable, shall
be made within 60 days of receipt of such application. In the event the Secretary
does not notify the taxpayer of the results of such certification within such period,
the taxpayer may presume the certification to be issued until so notified.
I.R.C. § 45H(e)(4) Statute Of Limitations —
With respect to the credit allowed under this section—
I.R.C. § 45H(e)(4)(A) —
the statutory period for the assessment of any deficiency attributable to such credit
shall not expire before the end of the 3-year period ending on the date that the
review period described in paragraph (3) ends with respect to the taxpayer, and
I.R.C. § 45H(e)(4)(B) —
such deficiency may be assessed before the expiration of such 3-year period notwithstanding
the provisions of any other law or rule of law which would otherwise prevent such
assessment.
I.R.C. § 45H(f) Cooperative Organizations
I.R.C. § 45H(f)(1) Apportionment Of Credit
I.R.C. § 45H(f)(1)(A) In General —
In the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among
patrons
eligible to share in patronage dividends on the basis of the quantity or value of
business done with or for such patrons for the taxable
year.
I.R.C. § 45H(f)(1)(B) Form And Effect Of Election —
An election under subparagraph (A) for any taxable year
shall be made on a timely filed return for such year. Such election, once made, shall
be irrevocable for such taxable year.
I.R.C. § 45H(f)(2) Treatment Of Organizations And Patrons
I.R.C. § 45H(f)(2)(A) Organizations —
The amount of the credit not apportioned to patrons pursuant to paragraph (1) shall be included in the amount determined under subsection (a) for the taxable year of the organization.
I.R.C. § 45H(f)(2)(B) Patrons —
The amount of the credit apportioned to patrons pursuant to paragraph (1) shall be included in the amount determined under subsection (a) for the first taxable year of each patron ending on or after the last day of the
payment period
(as defined in section 1382(d))
for the taxable year of the organization or, if earlier, for the taxable year of
each patron ending on or after the date on which the patron receives notice from
the cooperative of the apportionment.
I.R.C. § 45H(f)(3) Special Rule —
If the amount of a credit which has been apportioned to any patron under this subsection
is decreased for any reason—
I.R.C. § 45H(f)(3)(A) —
such amount shall not increase the tax imposed on such patron, and
I.R.C. § 45H(f)(3)(B) —
the tax imposed by this chapter on such organization shall be increased by such
amount.
The increase under subparagraph (B) shall not be treated
as tax imposed by this chapter for purposes of determining the amount of any credit
under this chapter or for purposes of section 55.
I.R.C. § 45H(g) Election To Not Take Credit —
No credit shall be determined under subsection (a) for the taxable year if the taxpayer
elects not to have subsection (a) apply to such taxable year.
(Added by Pub. L. 108-357, title III, Sec. 339(a), Oct. 22, 2004, 118 Stat. 1418; and amended by Pub. L. 110-172, Sec. 7(a), Dec. 29, 2007, 121 Stat. 2473; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(19), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018--Subsec.
(d). Pub. L. 115-141, Div. U, Sec. 401(a)(19), amended subsec. (d) by substituting ‘‘purposes of this’’
for ‘‘purposes this’’.
2007 - Subsec. (b)(1)(A). Pub. L. 110-172, Sec. 7(a)(3)(A), amended subpar. (A) by substituting “qualified costs”
for “qualified capital costs”.
Subsec. (c)(2). Pub. L. 110-172, Sec. 7(a)(3), amended par. (2) by substituting “qualified costs” for “qualified capital costs”
in the heading and text.
Subsec. (d)-(g). Pub. L. 110-172, Sec. 7(a)(1), struck subsec. (d) and redesignated subsec. (e)-(g) as subsec. (d)-(f), respectively.
Before being struck, subsec. (d) read as follows:
“(d) Reduction In Basis-For purposes of this subtitle, if a credit is determined
under this section for any expenditure with respect to any property, the increase
in basis of such property which would (but for this subsection) result from such
expenditure shall be reduced by the amount of the credit so determined.”
Subsec. (e)(1)-(2). Pub. L. 110-172, Sec. 7(a)(3)(A), amended par. (1) and (2) of subsec. (e) (as redesignated) by substituting “qualified
costs” for “qualified capital costs”.
Subsec. (g). Pub. L. 110-172, Sec. 7(a)(2)(A), added subsec. (g).
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(19), effective March 23, 2018.
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendments by Sec. 7(a) of Pub. L. 110-172 effective as if included in the provisions of the American Jobs Creation Act of 2004
[Pub. L. 108-357, Sec. 339]
to which they relate.
EFFECTIVE DATE
Effective for expenses paid or incurred after December 31, 2002, in taxable years
ending after such date.
