Eyes On Energy Tax Update: First Quarter 2023

• Jurisdiction: United States,Federal
• Law Firm: Holland & Knight
• Subject Matter: Tax, Energy and Natural Resources, Energy Law, Oil, Gas & Electricity, Income Tax
• Author: Mr Amish Shah, Bradley M. Seltzer, Nicole Elliott, Joshua David Odintz, Roger David Aksamit, James Dawson, Kenneth Parsons, Daniel Graham Strickland, Mary Kate Nicholson and Rachel T. Provencher
• Published date: 15 May 2023

Eyes on Energy Tax Update is a regular publication of the Holland & Knight Energy Tax Team that provides highlights of important energy tax developments. The Energy Tax Team also publishes more in-depth publications on certain developments. To subscribe to these publications, please add yourself to our Renewable Energy list.

The first quarter of 2023 featured continued energy tax developments as a result of the enactment of the Inflation Reduction Act of 2022 (IRA), court activity and announcements from federal agencies. Below, we summarize the energy tax updates you need to know.

IRS Rulings and Guidance

Following enactment of the IRA, a plethora of related guidance continued to be released by the U.S. Department of the Treasury and IRS.

• The Treasury Department and IRS released proposed regulations under the Section 30D new clean vehicle credit. The proposed regulations provide guidance with respect to the critical mineral and battery component requirements. More information on the proposed regulations are available in Holland & Knight's previous alert, "Treasury Department, IRS Release Clean Vehicle Tax Guidance," April 12, 2023.
• In March 2023, the IRS updated frequently asked questions related to Section 30D (new clean vehicle credit), Section 25E (previously owned clean vehicle credit) and Section 45W (qualified commercial clean vehicles credit). The IRS also released the vehicles qualifying for the Section 30D credit.
• In Notice 2023-18, the Treasury Department and IRS provided initial program guidance for implementation of the Section 48C program. In the notice, the IRS indicated that additional guidance is expected by May 31, 2023 More information on the guidance is available in Holland &amp Knight's previous alert, "Treasury Department Releases Section 48C Guidance with Billions in Tax Credits Up for Grabs," Feb. 14 2023.

Holland & Knight Insight: Notice 2023-18 provides taxpayers key deadlines for application of an allocation of credit and helpful preliminary background information regarding eligible projects. However, further guidance from the Treasury Department and IRS is critically needed to address the content required in the concept papers as the first round of applications for allocations runs from May 31 to July 31, 2023.

• In Notice 2023-29, the IRS released guidance regarding the energy community bonus credit under Sections 45, 48, 45Y and 48E, which also is applicable for purposes of Section 48C. More information on the guidance is...