Critics blast IRS wind tax guidance

Source: Geof Koss, E&E reporter • Posted: Tuesday, May 10, 2016

Critics of the renewable energy production tax credit are crying foul over new Internal Revenue Service guidance allowing wind and other facilities an additional two years to qualify for the incentive after breaking ground.

Last week’s IRS¬†notice¬†doubled the amount of time renewable energy production facilities have to qualify for the PTC after starting construction. The guidance extended the time from two years, a number set in 2013, to four or more years.

To qualify for the 2.3-cent-per-kilowatt-hour credit, facilities must show they either have begun “physical work of a significant nature” or are incurring at least 5 percent of the project’s total cost. Projects will have four calendar years to start generating power.

The new rules follow last year’s enactment of a five-year extension of the PTC, which begins to wind down starting next fiscal year.

The extension came over the objections of conservative groups, which have battled for years to see the PTC fall out of the tax code.

One critic, Institute for Energy Research President Thomas Pyle, slammed the Obama administration for the revisions to the qualification terms of the PTC.

“This is nothing short of theft from American taxpayers,” he said in a Friday statement. “The IRS is far more concerned about providing special interest handouts through the wind PTC than protecting the American families who actually pay taxes.”

He added, “This is a travesty, but it is par for the course for an administration that has no concern for the economic well-being of everyday Americans.”

In last week’s notice, the IRS said it would issue separate guidance for the solar investment tax credit, which also saw a five-year extension in Congress last year.

Because of what Democrats have called an error, lawmakers extended the ITC only for solar, leaving a host of other qualifying sources set to expire at the end of this year.

Efforts to extend the ITC for other power sources as part of the Federal Aviation Administration reauthorization bill faltered last month, but Senate Minority Leader Harry Reid (D-Nev.) has said the issue would return later this year (E&ENews PM, April 12).