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SPECIAL INDUSTRIES

Native corporation; and (6) a corpora- transaction for the Sec. 48D credit. including the definitions of “qualified
tion operating on a cooperative basis that These include, among other things, regu- investment,” “qualified property,” “ad-
is engaged in furnishing electric energy lations or other guidance that provide for vanced manufacturing facility,” “eligible
to persons in rural areas. Note that there recordkeeping or information-keeping taxpayer,” “foreign entity of concern,” and
are certain provisions for three select requirements for purposes of admin- “applicable transaction.”
credits (i.e., under Secs. 45Q, 45V, and istering the prohibition on significant The 2022–2023 Priority Guidance
45X), where a taxpayer may be treated transactions and the relevant exceptions Plan does not provide any deadline for
as an “applicable entity” for a five-year to that rule. In addition, Sec. 48D(d)(6) completing the guidance projects, and
period. For nonapplicable entities, the requires Treasury to issue regulatory there are no statutory deadlines associ-
transferability election allows the tax- guidance necessary or appropriate to ated with guidance related to the Sec.
payer to sell the credits to an unrelated carry out the purpose of the advanced 48D credit. Accordingly, the timing of
third party in exchange for cash. manufacturing ITC, including: (1) guid- when the Sec. 48D credit guidance will
If the Sec. 48D credit had not been ance under the credit’s direct-pay elec- be issued, as well as the type of guidance
taken out of the BBBA and enacted tion provision to ensure that the amount (e.g., notice, revenue procedure, regula-
under the CHIPS and Science Act, the of any refund payment is commensurate tions), is currently unknown.
Sec. 48D credit might have met the same with the amount of the credit that would This article does not constitute tax, legal,
fate as applicable credits under Secs. be otherwise allowable, and (2) guidance or other advice from Deloitte Tax LLP,
6417 and 6418, with a direct-pay provi- providing rules for determining a part- which assumes no responsibility with respect
sion limited to applicable entities and ner’s distributive share of the tax-exempt to assessing or advising the reader as to tax,
a refundability option (as well as being income in the case of a direct-pay elec- legal, or other consequences arising from the
subject to the two-tiered credit structure, tion under Sec. 48D(d)(2)(A). reader’s particular situation. ■
where prevailing wage and apprentice- The 2022–2023 Priority Guidance
ship requirements must be met for the Plan released by the IRS and Treasury Contributors
full 25% rate). However, Sec. 48D allows listed 205 guidance projects under 16
the direct-pay election for any eligible categories (e.g., Energy Security, General Adam Wallwork, J.D., LL.M. (District
taxpayer that is not a foreign entity of Tax Issues) that are priorities for allocat- of Columbia), is a manager; Quynh
concern and has not made an applicable ing resources for the fiscal year ending Nguyen, E.A., is a senior manager; Gary
transaction previously described and does June 30, 2023. “Guidance regarding the Hecimovich, CPA (North Carolina), is a
not have the prevailing wage and appren- advanced manufacturing investment partner; Jeremy DeMuth, J.D. (Illinois),
ticeship requirements for the ITC. credit under [IRC] § 48D established by is a managing director; Matthew Norm-
section 107 of the CHIPS Act of 2022” ington, CPA (California), is a partner;
Regulatory guidance is listed as the ninth item under the and Andrew Black, MS, E.A., is a tax
Sec. 50(a)(3)(C) expressly directs Trea- General Tax Issues category.³⁶ It is ex- specialist leader, all with Deloitte Tax LLP.
sury to issue appropriate guidance to pected that the guidance will cover many For more information about this article,
carry out the purposes of the special of the Sec. 48D key terms, concepts, and contact thetaxadviser@aicpa.org.
recapture rule related to an applicable uncertainties summarized in this article,

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36. See U.S. Department of Treasury Office of Tax Policy and Internal Revenue Service, “2022–2023 Priority Guidance Plan” (Nov. 4, 2022).

38 April 2023 The Tax Adviser