Subpart B—Other Credits
Amendments
1997—
1996—
1992—
1986—
1984—
Subpart Referred to in Other Sections
This subpart is referred to in
§27. Taxes of foreign countries and possessions of the United States; possession tax credit
(a) Foreign tax credit
The amount of taxes imposed by foreign countries and possessions of the United States shall be allowed as a credit against the tax imposed by this chapter to the extent provided in section 901.
(b) Section 936 credit
In the case of a domestic corporation, the amount provided by section 936 (relating to Puerto Rico and possession tax credit) shall be allowed as a credit against the tax imposed by this chapter.
(Aug. 16, 1954, ch. 736,
Amendments
1984—
1976—
Effective Date of 1976 Amendment
Section 1051(i) of
"(1) Except as provided by paragraph (2), the amendments made by this section [enacting
"(2) The amendment made by subsection (d)(2) [amending
Section Referred to in Other Sections
This section is referred to in
[§28. Renumbered §45C]
§29. Credit for producing fuel from a nonconventional source
(a) Allowance of credit
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to—
(1) $3, multiplied by
(2) the barrel-of-oil equivalent of qualified fuels—
(A) sold by the taxpayer to an unrelated person during the taxable year, and
(B) the production of which is attributable to the taxpayer.
(b) Limitations and adjustments
(1) Phaseout of credit
The amount of the credit allowable under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of the credit (determined without regard to this paragraph) as—
(A) the amount by which the reference price for the calendar year in which the sale occurs exceeds $23.50, bears to
(B) $6.
(2) Credit and phaseout adjustment based on inflation
The $3 amount in subsection (a) and the $23.50 and $6 amounts in paragraph (1) shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. In the case of gas from a tight formation, the $3 amount in subsection (a) shall not be adjusted.
(3) Credit reduced for grants, tax-exempt bonds, and subsidized energy financing
(A) In general
The amount of the credit allowable under subsection (a) with respect to any project for any taxable year (determined after the application of paragraphs (1) and (2)) shall be reduced by the amount which is the product of the amount so determined for such year and a fraction—
(i) the numerator of which is the sum, for the taxable year and all prior taxable years, of—
(I) grants provided by the United States, a State, or a political subdivision of a State for use in connection with the project,
(II) proceeds of any issue of State or local government obligations used to provide financing for the project the interest on which is exempt from tax under section 103, and
(III) the aggregate amount of subsidized energy financing (within the meaning of section 48(a)(4)(C)) provided in connection with the project, and
(ii) the denominator of which is the aggregate amount of additions to the capital account for the project for the taxable year and all prior taxable years.
(B) Amounts determined at close of year
The amounts under subparagraph (A) for any taxable year shall be determined as of the close of the taxable year.
(4) Credit reduced for energy credit
The amount allowable as a credit under subsection (a) with respect to any project for any taxable year (determined after the application of paragraphs (1), (2), and (3)) shall be reduced by the excess of—
(A) the aggregate amount allowed under section 38 for the taxable year or any prior taxable year by reason of the energy percentage with respect to property used in the project, over
(B) the aggregate amount recaptured with respect to the amount described in subparagraph (A)—
(i) under section 49(b) or 50(a) for the taxable year or any prior taxable year, or
(ii) under this paragraph for any prior taxable year.
The amount recaptured under section 49(b) or 50(a) with respect to any property shall be appropriately reduced to take into account any reduction in the credit allowed by this section by reason of the preceding sentence.
(5) Credit reduced for enhanced oil recovery credit
The amount allowable as a credit under subsection (a) with respect to any project for any taxable year (determined after application of paragraphs (1), (2), (3), and (4)) shall be reduced by the excess (if any) of—
(A) the aggregate amount allowed under section 38 for the taxable year and any prior taxable year by reason of any enhanced oil recovery credit determined under section 43 with respect to such project, over
(B) the aggregate amount recaptured with respect to the amount described in subparagraph (A) under this paragraph for any prior taxable year.
(6) Application with other credits
The credit allowed by subsection (a) for any taxable year shall not exceed the excess (if any) of—
(A) the regular tax for the taxable year reduced by the sum of the credits allowable under subpart A and section 27, over
(B) the tentative minimum tax for the taxable year.
(c) Definition of qualified fuels
For purposes of this section—
(1) In general
The term "qualified fuels" means—
(A) oil produced from shale and tar sands,
(B) gas produced from—
(i) geopressured brine, Devonian shale, coal seams, or a tight formation, or
(ii) biomass, and
(C) liquid, gaseous, or solid synthetic fuels produced from coal (including lignite), including such fuels when used as feedstocks.
(2) Gas from geopressured brine, etc.
(A) In general
Except as provided in subparagraph (B), the determination of whether any gas is produced from geopressured brine, Devonian shale, coal seams, or a tight formation shall be made in accordance with section 503 of the Natural Gas Policy Act of 1978.
(B) Special rules for gas from tight formations
The term "gas produced from a tight formation" shall only include gas from a tight formation—
(i) which, as of April 20, 1977, was committed or dedicated to interstate commerce (as defined in section 2(18) of the Natural Gas Policy Act of 1978, as in effect on the date of the enactment of this clause), or
(ii) which is produced from a well drilled after such date of enactment.
(3) Biomass
The term "biomass" means any organic material other than—
(A) oil and natural gas (or any product thereof), and
(B) coal (including lignite) or any product thereof.
(d) Other definitions and special rules
For purposes of this section—
(1) Only production within the United States taken into account
Sales shall be taken into account under this section only with respect to qualified fuels the production of which is within—
(A) the United States (within the meaning of section 638(1)), or
(B) a possession of the United States (within the meaning of section 638(2)).
(2) Computation of inflation adjustment factor and reference price
(A) In general
The Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor and the reference price for the preceding calendar year in accordance with this paragraph.
(B) Inflation adjustment factor
The term "inflation adjustment factor" means, with respect to a calendar year, a fraction the numerator of which is the GNP implicit price deflator for the calendar year and the denominator of which is the GNP implicit price deflator for calendar year 1979. The term "GNP implicit price deflator" means the first revision of the implicit price deflator for the gross national product as computed and published by the Department of Commerce.
(C) Reference price
The term "reference price" means with respect to a calendar year the Secretary's estimate of the annual average wellhead price per barrel for all domestic crude oil the price of which is not subject to regulation by the United States.
(3) Production attributable to the taxpayer
In the case of a property or facility in which more than 1 person has an interest, except to the extent provided in regulations prescribed by the Secretary, production from the property or facility (as the case may be) shall be allocated among such persons in proportion to their respective interests in the gross sales from such property or facility.
(4) Gas from geopressured brine, Devonian shale, coal seams, or a tight formation
The amount of the credit allowable under subsection (a) shall be determined without regard to any production attributable to a property from which gas from Devonian shale, coal seams, geopressured brine, or a tight formation was produced in marketable quantities before January 1, 1980.
(5) Barrel-of-oil equivalent
The term "barrel-of-oil equivalent" with respect to any fuel means that amount of such fuel which has a Btu content of 5.8 million; except that in the case of qualified fuels described in subparagraph (C) of subsection (c)(1), the Btu content shall be determined without regard to any material from a source not described in such subparagraph.
(6) Barrel defined
The term "barrel" means 42 United States gallons.
(7) Related persons
Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling qualified fuels to an unrelated person if such fuels are sold to such a person by another member of such group.
(8) Pass-thru in the case of estates and trusts
Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
(e) Application with the Natural Gas Policy Act of 1978
(1) No credit if section 107 of the Natural Gas Policy Act of 1978 is utilized
Subsection (a) shall apply with respect to any natural gas described in subsection (c)(1)(B)(i) which is sold during the taxable year only if such natural gas is sold at a lawful price which is determined without regard to the provisions of section 107 of the Natural Gas Policy Act of 1978 and subtitle B of title I of such Act.
(2) Treatment of this section
For purposes of section 107(d) of the Natural Gas Policy Act of 1978, this section shall not be treated as allowing any credit, exemption, deduction, or comparable adjustment applicable to the computation of any Federal tax.
(f) Application of section
This section shall apply with respect to qualified fuels—
(1) which are—
(A) produced from a well drilled after December 31, 1979, and before January 1, 1993, or
(B) produced in a facility placed in service after December 31, 1979, and before January 1, 1993, and
(2) which are sold before January 1, 2003.
(g) Extension for certain facilities
(1) In general
In the case of a facility for producing qualified fuels described in subparagraph (B)(ii) or (C) of subsection (c)(1)—
(A) for purposes of subsection (f)(1)(B), such facility shall be treated as being placed in service before January 1, 1993, if such facility is placed in service before July 1, 1998, pursuant to a binding written contract in effect before January 1, 1997, and
(B) if such facility is originally placed in service after December 31, 1992, paragraph (2) of subsection (f) shall be applied with respect to such facility by substituting "January 1, 2008" for "January 1, 2003".
(2) Special rule
Paragraph (1) shall not apply to any facility which produces coke or coke gas unless the original use of the facility commences with the taxpayer.
(Added
References in Text
The Natural Gas Policy Act of 1978, referred to in subsecs. (c)(2)(A), (B)(i) and (e), is
The date of the enactment of this clause, and such date of enactment, referred to in subsec. (c)(2)(B), probably mean the date of enactment of
Amendments
1996—Subsec. (b)(6)(A).
Subsec. (g)(1)(A).
1992—Subsec. (g).
1990—Subsec. (b)(3)(A)(i)(III).
Subsec. (b)(4).
Subsec. (b)(5), (6).
Subsec. (c)(1)(B) to (E).
Subsec. (c)(2)(B).
"(i) gas the price of which is regulated by the United States, and
"(ii) gas for which the maximum lawful price applicable under the Natural Gas Policy Act of 1978 is at least 150 percent of the then applicable price under section 103 of such Act."
Subsec. (c)(3).
Subsec. (c)(4).
"(A)
"(B)
"(i) shall apply to all production from a facility; and
"(ii) shall be effective for the taxable year with respect to which it is made and for all subsequent taxable years and, once made, may be revoked only with the consent of the Secretary."
Subsec. (c)(5).
Subsec. (d)(4).
Subsec. (d)(5), (6).
"(A) qualifying processed wood fuel,
or
"(B) steam from solid agricultural byproducts,
paragraph (1) of subsection (b) shall not apply with respect to the amount of the credit allowable under subsection (a) for fuels sold during the 3-year period beginning on the date the facility is placed in service."
Subsec. (d)(7) to (9).
Subsec. (f).
Subsec. (f)(1)(A)(i), (ii).
Subsec. (f)(1)(B).
1988—Subsec. (f)(1)(A)(i), (ii).
1986—Subsec. (b)(5).
Subsec. (d)(8).
1984—
Subsec. (b)(1)(A).
Subsec. (b)(2).
Subsec. (b)(5).
1983—Subsec. (f)(1)(B), (2)(A)(i).
1982—Subsec. (d)(9).
1981—Subsec. (e).
Effective Date of 1996 Amendment
Section 1205(e) of
Section 1207(b) of
Effective Date of 1990 Amendment
Section 11501(b)(2) of
Section 11501(c)(2) of
Section 11813(c) of
"(1)
"(2)
"(A) any transition property (as defined in section 49(e) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act [Nov. 5, 1990]),
"(B) any property with respect to which qualified progress expenditures were previously taken into account under section 46(d) of such Code (as so in effect), and
"(C) any property described in section 46(b)(2)(C) of such Code (as so in effect)."
Section 11821(a) of
Effective Date of 1986 Amendment
Amendment by section 701(c)(3) of
Section 1879(c)(2) of
Effective Date of 1984 Amendment
Amendment by section 474(h) of
Amendment by section 612(e)(1) of
Section 722(d)(3) of
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1981 Amendment
Section 611(b) of
Effective Date
Section 231(c) of
Savings Provision
Section 11821(b) of
"(1) any provision amended or repealed by this part [part I (§§11801–11821) of subtitle H of title XI of
"(A) any transaction occurring before the date of the enactment of this Act [Nov. 5, 1990],
"(B) any property acquired before such date of enactment, or
"(C) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
"(2) the treatment of such transaction, property, or item under such provision would (without regard to the amendments made by this part) affect liability for tax for periods ending after such date of enactment,
nothing in the amendments made by this part shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment."
Applicability of Certain Amendments by Pub. L. 99–514 in Relation to Treaty Obligations of United States
For applicability of amendment by section 701(c)(3) of
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of
Section Referred to in Other Sections
This section is referred to in
§30. Credit for qualified electric vehicles
(a) Allowance of credit
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 10 percent of the cost of any qualified electric vehicle placed in service by the taxpayer during the taxable year.
(b) Limitations
(1) Limitation per vehicle
The amount of the credit allowed under subsection (a) for any vehicle shall not exceed $4,000.
(2) Phaseout
In the case of any qualified electric vehicle placed in service after December 31, 2001, the credit otherwise allowable under subsection (a) (determined after the application of paragraph (1)) shall be reduced by—
(A) 25 percent in the case of property placed in service in calendar year 2002,
(B) 50 percent in the case of property placed in service in calendar year 2003, and
(C) 75 percent in the case of property placed in service in calendar year 2004.
(3) Application with other credits
The credit allowed by subsection (a) for any taxable year shall not exceed the excess (if any) of—
(A) the regular tax for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27 and 29, over—
(B) the tentative minimum tax for the taxable year.
(c) Qualified electric vehicle
For purposes of this section—
(1) In general
The term "qualified electric vehicle" means any motor vehicle—
(A) which is powered primarily by an electric motor drawing current from rechargeable batteries, fuel cells, or other portable sources of electrical current,
(B) the original use of which commences with the taxpayer, and
(C) which is acquired for use by the taxpayer and not for resale.
(2) Motor vehicle
For purposes of paragraph (1), the term "motor vehicle" means any vehicle which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails) and which has at least 4 wheels.
(d) Special rules
(1) Basis reduction
The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (b)(3)).
(2) Recapture
The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.
(3) Property used outside United States, etc., not qualified
No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b) or with respect to the portion of the cost of any property taken into account under section 179.
(4) Election to not take credit
No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.
(e) Termination
This section shall not apply to any property placed in service after December 31, 2004.
(Added
Prior Provisions
A prior section 30 was renumbered
Amendments
1996—Subsec. (b)(3)(A).
Subsec. (d)(1).
Subsec. (d)(4).
Effective Date of 1996 Amendment
Amendment by section 1205(d)(4) of
Effective Date
Section 1913(c) of
Section Referred to in Other Sections
This section is referred to in
§30A. Puerto Rico economic activity credit
(a) Allowance of credit
(1) In general
Except as otherwise provided in this section, if the conditions of both paragraph (1) and paragraph (2) of subsection (b) are satisfied with respect to a qualified domestic corporation, there shall be allowed as a credit against the tax imposed by this chapter an amount equal to the portion of the tax which is attributable to the taxable income, from sources without the United States, from—
(A) the active conduct of a trade or business within Puerto Rico, or
(B) the sale or exchange of substantially all of the assets used by the taxpayer in the active conduct of such trade or business.
In the case of any taxable year beginning after December 31, 2001, the aggregate amount of taxable income taken into account under the preceding sentence (and in applying subsection (d)) shall not exceed the adjusted base period income of such corporation, as determined in the same manner as under section 936(j).
(2) Qualified domestic corporation
For purposes of paragraph (1), the term "qualified domestic corporation" means a domestic corporation—
(A) which is an existing credit claimant with respect to Puerto Rico, and
(B) with respect to which section 936(a)(4)(B) does not apply for the taxable year.
(3) Separate application
For purposes of determining—
(A) whether a taxpayer is an existing credit claimant with respect to Puerto Rico, and
(B) the amount of the credit allowed under this section,
this section (and so much of section 936 as relates to this section) shall be applied separately with respect to Puerto Rico.
(b) Conditions which must be satisfied
The conditions referred to in subsection (a) are—
(1) 3-year period
If 80 percent or more of the gross income of the qualified domestic corporation for the 3-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession (determined without regard to section 904(f)).
(2) Trade or business
If 75 percent or more of the gross income of the qualified domestic corporation for such period or such part thereof was derived from the active conduct of a trade or business within a possession.
(c) Credit not allowed against certain taxes
The credit provided by subsection (a) shall not be allowed against the tax imposed by—
(1) section 59A (relating to environmental tax),
(2) section 531 (relating to the tax on accumulated earnings),
(3) section 541 (relating to personal holding company tax), or
(4) section 1351 (relating to recoveries of foreign expropriation losses).
(d) Limitations on credit for active business income
The amount of the credit determined under subsection (a) for any taxable year shall not exceed the sum of the following amounts:
(1) 60 percent of the sum of—
(A) the aggregate amount of the qualified domestic corporation's qualified possession wages for such taxable year, plus
(B) the allocable employee fringe benefit expenses of the qualified domestic corporation for such taxable year.
(2) The sum of—
(A) 15 percent of the depreciation allowances for the taxable year with respect to short-life qualified tangible property,
(B) 40 percent of the depreciation allowances for the taxable year with respect to medium-life qualified tangible property, and
(C) 65 percent of the depreciation allowances for the taxable year with respect to long-life qualified tangible property.
(3) If the qualified domestic corporation does not have an election to use the method described in section 936(h)(5)(C)(ii) (relating to profit split) in effect for the taxable year, the amount of the qualified possession income taxes for the taxable year allocable to nonsheltered income.
(e) Administrative provisions
For purposes of this title—
(1) the provisions of section 936 (including any applicable election thereunder) shall apply in the same manner as if the credit under this section were a credit under section 936(a)(1)(A) for a domestic corporation to which section 936(a)(4)(A) applies,
(2) the credit under this section shall be treated in the same manner as the credit under section 936, and
(3) a corporation to which this section applies shall be treated in the same manner as if it were a corporation electing the application of section 936.
(f) Denial of double benefit
Any wages or other expenses taken into account in determining the credit under this section may not be taken into account in determining the credit under section 41.
(g) Definitions
For purposes of this section, any term used in this section which is also used in section 936 shall have the same meaning given such term by section 936.
(h) Application of section
This section shall apply to taxable years beginning after December 31, 1995, and before January 1, 2006.
(Added
Amendments
2000—Subsecs. (f) to (h).
1997—
Effective Date of 2000 Amendment
Effective Date of 1997 Amendment
Amendment by
Effective Date
Section 1601(c) of
"(1)
"(2)
"(3)
Section Referred to in Other Sections
This section is referred to in