[Federal Register Volume 89, Number 182 (Thursday, September 19, 2024)]
[Proposed Rules]
[Pages 76759-76782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20748]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-118269-23]
RIN 1545-BR19


Section 30C Alternative Fuel Vehicle Refueling Property Credit

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document contains proposed regulations regarding the 
Federal income tax credit under the Inflation Reduction Act of 2022 for 
certain costs relating to qualified alternative fuel vehicle refueling 
property that is placed in service within a low-income community or 
within a non-urban census tract. These proposed regulations would 
affect eligible taxpayers who place qualified property into service 
during a taxable year.

DATES: Written or electronic comments and requests for a public hearing 
must be received by November 18, 2024.

ADDRESSES: Commenters are strongly encouraged to submit public comments 
electronically via the Federal eRulemaking Portal at https://www.regulations.gov (indicate IRS and REG-118269-23) by following the 
online instructions for submitting comments. Requests for a public 
hearing must be submitted as prescribed in the ``Comments and Requests 
for a Public Hearing'' section. Once submitted to the Federal 
eRulemaking Portal, comments cannot be edited or withdrawn. The 
Department of the Treasury (Treasury Department) and the IRS will 
publish for public availability any comments submitted to the IRS's 
public docket. Send paper submissions to: CC:PA:01:PR (REG-118269-23), 
Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin 
Station, Washington, DC 20044.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
contact Kevin I. Babitz or Whitney E. Brady of Office of Associate 
Chief Counsel (Passthroughs & Special Industries) at (202) 317-6853 
(not a toll-free number); concerning submissions of comments and 
requests for a public hearing, Publications and Regulations Section at 
(202) 317-6901 (not a toll-free number) or by email to 
[email protected] (preferred).

SUPPLEMENTARY INFORMATION:

Authority

    This document contains proposed amendments to the Income Tax 
Regulations (26 CFR part 1) under sections 30C, 48, 48E, 6417, and 6418 
of the Internal Revenue Code (Code) issued by the Secretary of the 
Treasury or her delegate (Secretary) under the authority granted under 
sections 30C(e)(5), (g)(4), and (h), 45(b)(12), 48(a)(16), 48E(i), 
6417(h), 6418(g) and (h), and 7805(a) of the Code (proposed 
regulations).
    Section 30C includes three specific delegations of regulatory 
authority. First, 30C(h) provides a general grant of regulatory 
authority for section 30C as a whole, stating, ``[t]he Secretary shall 
prescribe such regulations as necessary to carry out the provisions of 
this section.'' Second, section 30C(g)(4) provides a specific 
delegation of authority related to the prevailing wage and registered 
apprenticeship (PWA) requirements: ``The Secretary shall issue such 
regulations or other guidance as the Secretary determines necessary to 
carry out the purposes of this subsection, including regulations or 
other guidance that provides for requirements for recordkeeping or 
information reporting for purposes of administering the requirements of 
this subsection.'' Third, section 30C(e)(5) provides a specific 
delegation of authority by cross-reference to provide recapture rules 
similar to those under former section 179A (described in part III.A. of 
the Background section and part IV.A. of the Explanation of Provisions 
section) as authorized by former section 179A(e)(4).
    Sections 45(b)(12) and 48(a)(16) provide specific delegations of 
authority with respect to the requirements of section 45(b), including 
the PWA requirements of section 45(b)(7) and (8) that sections 
48(a)(10) and (11) and 48E(d)(3) and (4) refer to, each stating, 
``[t]he Secretary shall issue such regulations or other guidance as the 
Secretary determines necessary to carry out the purposes of this 
subsection, including regulations or other guidance which provides for 
requirements for recordkeeping or information reporting for purposes of 
administering the requirements of this subsection.'' Section 48E(i) 
provides a specific delegation of authority with respect to the 
requirements of section 48E, including the PWA requirements of section 
48E(d)(3) and (4), stating, that ``[n]ot later than January 1, 2025, 
the Secretary shall issue guidance regarding implementation of this 
section.''
    Sections 6417(h) and 6418(h) provide specific delegations of 
authority with respect to the elective payment election rules of 
section 6417 and the transfer of certain credits under section 6418, 
each stating, in part, that ``[t]he Secretary shall issue such 
regulations or other guidance as may be necessary to carry out the 
purposes of this section . . .'' Finally, section 7805(a) authorizes 
the Secretary to prescribe all needful rules and regulations for the 
enforcement of the Code.

Background

I. Overview

    Section 30C of the Code allows a credit (section 30C credit) 
against the tax imposed by chapter 1 of the Code (chapter 1) with 
respect to each item of qualified alternative fuel vehicle refueling 
property that a taxpayer places in service. The section 30C credit is 
determined and allowed with respect to the taxable year in which the 
taxpayer places the item of property in service.
    Section 30C was originally enacted by section 1342(a) of the Energy 
Policy Act of 2005, Public Law 109-58, 119 Stat. 594, 1049 (Aug. 8, 
2005), to provide a credit for the cost of qualified alternative fuel 
vehicle refueling property. Section 30C has been amended several times 
since its enactment, most recently by section 13404 of Public Law 117-
169, 136 Stat. 1818, 1966 (August 16, 2022), commonly known as the 
Inflation Reduction Act of 2022 (IRA). As amended by the IRA, section 
30C allows taxpayers to claim a credit for up to 30 percent of the cost 
of qualified alternative fuel vehicle refueling property placed in 
service after December 31, 2022, and on or before December 31, 2032.
    The amount of the section 30C credit is treated as a personal 
credit or a general business credit depending on the character of the 
property that the taxpayer places in service. In general, the section 
30C credit is a nonrefundable personal credit allowed under subpart B 
of part IV of subchapter A of chapter 1. However, the amount of the 
section 30C credit that is attributable to property that is of a 
character subject to an allowance for depreciation (depreciable 
property) is treated under section 30C(d)(1) as a current year business 
credit under section 38(b) of the Code instead of being allowed under 
section 30C(a).

[[Page 76760]]

II. Credit Amount and Limitation

    For property placed in service after December 31, 2022, and on or 
before December 31, 2032, section 30C(a) provides a credit equal to 6 
percent of the cost of any qualified alternative fuel vehicle refueling 
property that the taxpayer places in service during the year, if the 
property is depreciable property. However, for depreciable property 
that is placed in service as part of a qualified alternative fuel 
vehicle refueling project that satisfies the prevailing wage and 
apprenticeship requirements (discussed further in part V of this 
Background section), the amount of the section 30C credit is multiplied 
by five. For property that is not subject to depreciation, section 
30C(a) allows a 30 percent credit for any property placed in service 
during the taxable year, with no requirement to satisfy any prevailing 
wage and apprenticeship requirements.
    The section 30C credit with respect to any single item of qualified 
alternative fuel vehicle refueling property placed in service by the 
taxpayer during the taxable year is limited to $100,000 in the case of 
depreciable property, and $1,000 in any other case. Before the IRA's 
amendments to section 30C became applicable, prior law limited the 
section 30C credit, on a per location basis, to $30,000 in the case of 
depreciable property and to $1,000 in the case of any other property. 
Section 13404 of the IRA modified the limitation on the section 30C 
credit so that it now applies with respect to any single item of 
qualified alternative fuel vehicle refueling property instead of with 
respect to all qualified alternative fuel vehicle refueling property at 
a location.
    Under section 30C(e)(1), taxpayers who claim a section 30C credit 
are required to reduce the basis of any property for which the section 
30C credit is allowable by the amount of the credit allowed (without 
regard to the rules of section 30C(d)). If a taxpayer elects not to 
claim the credit, then no section 30C credit is allowed, whether under 
section 30C(a) or section 38, and no basis reduction is required. See 
section 30C(e)(4).
    No section 30C credit is allowable for the portion of the cost of 
any property taken into account under section 179. Section 30C(e)(3).

III. Qualified Alternative Fuel Vehicle Refueling Property

A. In General
    Section 30C(c) defines ``qualified alternative fuel vehicle 
refueling property'' by reference to section 179A of the Code, with 
some modifications. (Section 30C(e)(6) clarifies that for purposes of 
section 30C, any references to ``section 179A'' are to section 179A as 
in effect immediately before its repeal by section 221(a)(34)(A) of the 
Tax Increase Prevention Act of 2014, enacted as Division A of Public 
Law 113-295, 128 Stat. 4010, 4042 (December 19, 2014), which is 
referred to as ``former section 179A'' in this preamble.) Following the 
definition in former section 179A, therefore, qualified alternative 
fuel vehicle refueling property generally includes any depreciable 
property (not including a building and its structural components), the 
original use of which begins with the taxpayer, and that is (1) for the 
storage or dispensing of a clean-burning fuel into the fuel tank of a 
motor vehicle propelled by such fuel, but only if the storage or 
dispensing of the fuel is at the point where such fuel is delivered 
into the fuel tank of the motor vehicle, or (2) for the recharging of 
motor vehicles propelled by electricity, but only if the property is 
located at the point where the motor vehicles are recharged. See former 
section 179A(d). Notwithstanding former section 179A's general 
requirement that the property be depreciable, section 30C allows a 
taxpayer to claim a credit for qualified alternative fuel vehicle 
refueling property that is not depreciable property, provided that the 
property is installed at the taxpayer's principal residence (within the 
meaning of section 121 of the Code). See section 30C(c)(1)(A) and 
former section 179A(d)(1).
    For purposes of section 30C, ``clean-burning fuels'' includes only 
(1) any fuel at least 85 percent of the volume of which consists of one 
or more of the following: ethanol, natural gas, compressed natural gas, 
liquified natural gas, liquefied petroleum gas, or hydrogen; (2) any 
mixture that consists of two or more of the following: biodiesel (as 
defined in section 40A(d)(1) of the Code), diesel fuel (as defined in 
section 4083(a)(3) of the Code), or kerosene, and at least 20 percent 
of the volume of which consists of biodiesel determined without regard 
to any kerosene in such mixture; (3) electricity; or (4) any 
transportation fuel (as defined in section 45Z(d)(5) of the Code) that 
is produced after December 31, 2024.
    Section 30C does not provide a general definition of ``motor 
vehicle.'' However, former section 179A(e)(2) defined motor vehicle to 
mean any vehicle that is manufactured primarily for use on public 
streets, roads, and highways (not including a vehicle operated 
exclusively on a rail or by rails) and that has at least four wheels. 
Further, section 30C(f) explicitly allows the credit for depreciable 
property to recharge two- and three-wheeled motor vehicles manufactured 
primarily for use on public streets, roads, or highways that are 
propelled by electricity. Section 30C(f)(1)(A) requires that the 
depreciable property ``meets the requirements of subsection (a)(2),'' 
but there is no subsection (a)(2) in the statute.
    Section 30C(c)(2) provides that qualified alternative fuel vehicle 
refueling property does not exclude otherwise eligible property that 
both is capable of charging the battery of a motor vehicle propelled by 
electricity and also allows discharging electricity from such battery 
to an electric load external to the motor vehicle.
B. Eligible Census Tracts
    Section 30C, as amended by the IRA, requires that property be 
placed in service in an eligible census tract in order to qualify for 
the credit. An eligible census tract is any population census tract 
that either is a low-income community under section 45D(e) of the Code 
or is not an urban area (non-urban area). See section 30C(c)(3)(B). The 
Census Bureau defines a ``population census tract'' as a small-area 
geographic division of a county or statistically equivalent entity 
defined for the tabulation and presentation of data from the decennial 
census and selected other statistical programs. Population census 
tracts are comprised of ``census blocks,'' and a census block is the 
smallest geographic area for which the Census Bureau collects and 
tabulates decennial census data. The Census Bureau assigns to each 
population census tract, including census tracts in U.S. territories, a 
unique 11-digit census tract Geographic Identifier (GEOID). Each 11-
digit census tract GEOID is comprised of a 2-digit state GEOID, 3-digit 
county GEOID, and 6-digit census tract GEOID.
1. Low-Income Community Census Tracts
    Section 30C(c)(3)(B)(i)(I) includes as an eligible census tract any 
population census tract that is described in section 45D(e), which 
defines the term ``low-income community'' for purposes of the new 
markets tax credit (NMTC). As a general rule, section 45D(e)(1) defines 
a low-income community as any population census tract for which the 
poverty rate is at least 20 percent. The statute also provides more 
specific ways that a tract can constitute a low-income community. 
Section 45D(e)(1) provides that a tract not located within a

[[Page 76761]]

metropolitan area constitutes a low-income community if the median 
family income for such tract does not exceed 80 percent of statewide 
median family income. Similarly, a tract located within a metropolitan 
area is a low-income community if the median family income for such 
tract does not exceed 80 percent of the greater of the statewide median 
family income or the metropolitan area's median family income. Section 
45D(e)(2) provides that certain targeted populations (within the 
meaning of section 103(20) of the Riegle Community Development and 
Regulatory Improvement Act of 1994 (12 U.S.C. 4702(20)) may be treated 
as low-income communities. Section 45D(e)(3) describes the appropriate 
areas not within population census tracts that are used to determine 
poverty rates and median family income. Section 45D(e)(4) describes 
certain population census tracts with a population of less than 2,000 
that are treated as a low-income community for purposes of the NMTC. 
Finally, section 45D(e)(5) describes population census tracts located 
within a high migration rural county.
    Following the guidelines in section 45D(e), the Community 
Development Financial Institutions Fund (CDFI Fund) designates 
population census tracts as low-income communities for purposes of the 
NMTC. The CDFI Fund determines these population census tracts based in 
part on American Community Survey (ACS) 5-year estimates, which are 
published by the Census Bureau. The CDFI Fund updates its NMTC 
determination of ``low-income community'' census tracts approximately 
every five years based on the updated ACS 5-year estimates. The last 
update occurred on September 1, 2023, when the NMTC low-income 
community census tracts were updated to be based on the 2016-2020 ACS 
5-year estimates (2016-2020 NMTC tracts), which use the 2020 
delineation of census tract boundaries (2020 census tract boundaries). 
Prior to September 1, 2023, the NMTC low-income community census tracts 
were based on 2011-2015 ACS 5-year estimates (2011-2015 NMTC tracts), 
which use the 2015 delineation of census tract boundaries (2015 census 
tract boundaries). The next update is expected to occur in 2028.
    When there is an update, the CDFI Fund provides a one-year 
transition period during which taxpayers may look to either of the 5-
year census tracts. Therefore, between September 1, 2023, and August 
31, 2024, taxpayers can look to either the 2011-2015 NMTC or the 2016-
2020 NMTC tracts to determine which population census tracts are low-
income communities for the NMTC (and, by extension for section 30C 
purposes). On or after September 1, 2024, taxpayers must look to the 
2016-2020 NMTC tracts to determine which population census tracts are 
low-income communities for the NMTC.
2. Non-Urban Area
    Pursuant to section 30C(c)(3)(B)(i)(II), an eligible census tract 
includes a non-urban area. Section 30C(c)(3)(B)(ii), defines ``urban 
area'' as a population census tract that has been designated as an 
urban area by the Secretary of Commerce in the most recent decennial 
census. However, as of the 2020 Census (that is, the most recent 
decennial census as of the publication of this document), the Census 
Bureau defines urban areas on the basis of census blocks and not on the 
basis of population census tracts. The Census Bureau determines urban 
areas based on how densely developed a territory is, and to what extent 
the territory encompasses residential, commercial, and other non-
residential urban land uses. The Census Bureau delineates urban areas 
after each decennial census.
3. Census Tracts in U.S. Territories
    Section 30C(e)(3) provides generally that property used outside the 
United States does not qualify for the section 30C credit by excluding 
property referred to in section 50(b)(1) of the Code, which provides 
generally that property used predominantly outside the United States 
does not qualify for a credit to which section 50 applies. However, 
section 50(b)(1)(B) provides an exception for certain categories of 
property described in section 168(g)(4) of the Code. Section 168(g)(4) 
describes, among other things, property owned by a domestic corporation 
or by a United States citizen (other than a citizen entitled to the 
benefits of section 931 or section 933) and that is used predominantly 
in a territory (also referred to as a possession) of the United States 
by such a corporation or such a citizen, or by a corporation created or 
organized in, or under the law of, a territory of the United States. 
Accordingly, because section 30C(e)(3), by reason of sections 
50(b)(1)(B) and 168(g)(4), would allow for qualified alternative fuel 
vehicle refueling property to be used by certain taxpayers 
predominantly in a territory of the United States, eligible census 
tracts include low-income community census tracts and non-urban census 
tracts located in a territory of the United States.

IV. Property Used by a Tax-Exempt or Government Entity

    Section 30C(e)(2) provides that in the case of any qualified 
alternative fuel vehicle refueling property the use of which is 
described in section 50(b)(3) (generally, use by tax-exempt 
organizations) or (b)(4) (generally, use by the United States or a 
government entity or foreign persons or entities) and that is not 
subject to a lease, the person who sold such property to the person or 
entity using such property is treated as the taxpayer that placed such 
property in service, but only if the seller clearly discloses to the 
tax-exempt or government entity in a document the amount of any credit 
allowable under section 30C(a) with respect to such property 
(determined without regard to section 30C(d) (treating the credit as a 
credit listed in section 38(b) or as a personal credit)). For purposes 
of section 30C(d), property to which section 30C(e)(2) applies is 
treated as of a character subject to an allowance for depreciation.

V. Prevailing Wage and Registered Apprenticeship Requirements

    The IRA amended several sections of the Code, including section 
30C, to provide increased credit amounts for taxpayers who satisfy 
certain requirements, including an increased credit amount for 
satisfying prevailing wage and registered apprenticeship (PWA) 
requirements. This same increased credit amount is available under 
certain sections of the Code, including section 30C, if beginning of 
construction occurs before January 29, 2023 (BOC Exception).\1\
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    \1\ On November 30, 2022, the Treasury Department and the IRS 
published Notice 2022-61 in the Federal Register (87 FR 73580, 
corrected in 87 FR 75141 (Dec. 7, 2022)), providing guidance with 
respect to the PWA requirements in section 45(b)(7) and (8), 
including initial guidance for determining the beginning of 
construction under section 45 and other credits and the beginning of 
installation under section 179D. The final PWA regulations published 
in the Federal Register (89 FR 53184) (part III of the Background 
section) provide further detail on the BOC Exception.
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    For properties placed in service after December 31, 2022, the 
section 30C credit is equal to 6 percent for depreciable property. If a 
taxpayer satisfies the PWA requirements in section 30C(g)(2) and (3) or 
meets the BOC Exception with respect to a qualified alternative fuel 
vehicle refueling project, then the credit determined under section 
30C(a) for any qualified alternative fuel vehicle refueling property 
that is depreciable property and that is part of such project is 
multiplied by five. For purposes of the PWA requirements, section

[[Page 76762]]

30C(g)(1)(B) defines a ``qualified alternative fuel vehicle refueling 
project'' as a project consisting of one or more properties that are 
part of a single project. Section 30C(g)(2)(A) requires the taxpayer to 
ensure that any laborers and mechanics employed by the taxpayer or any 
contractor or subcontractor in the construction of any qualified 
alternative fuel vehicle refueling property that is part of a qualified 
alternative fuel vehicle refueling project are paid wages at rates not 
less than prevailing rates. Under section 30C(g)(3), rules similar to 
the rules in section 45(b)(8) apply regarding the apprenticeship 
requirements.
    On June 25, 2024, the Treasury Department and the IRS published 
final regulations in the Federal Register (89 FR 53184) that govern the 
increased credit or deduction amount available for taxpayers satisfying 
the PWA requirements that the IRA established with respect to several 
credits, including the section 30C credit (final PWA regulations). 
Specifically for the section 30C credit, the final PWA regulations 
provided clarifications to the applicable scope of the PWA 
requirements.

VI. Coordination With Sections 6417 and 6418

    Section 6417 allows an applicable entity (as defined in section 
6417(d)(1)(A), generally including tax-exempt and government entities, 
Indian Tribal governments, and Alaska Native Corporations, among 
others) to make an election to be treated as making a payment against 
the tax imposed by subtitle A of the Code for the taxable year with 
respect to which an applicable credit (as defined in section 6417(b)) 
was determined equal to the amount of the applicable credit. Section 
6417(b)(1) includes the amount of a section 30C credit, to the extent 
treated under section 30C(d)(1) as a general business credit under 
section 38, as an applicable credit.
    Section 6418 permits an eligible taxpayer (defined in section 
6418(f)(2) as a taxpayer not described in section 6417(d)(1)(A)) to 
make an election to transfer all or a portion of an eligible credit 
(defined in section 6418(f)(1)), determined with respect to such 
taxpayer for any taxable year to an unrelated taxpayer (within the 
meaning of section 267(b) or 707(b)(1)). Section 6418(f)(1)(A)(i) 
includes the amount of a section 30C credit, to the extent treated 
under section 30C(d)(1) as a general business credit under section 38, 
as an eligible credit.

VII. Prior Guidance, Request for Comments, and Other Documents Relating 
to the Alternative Fuel Vehicle Refueling Property Credit

A. Notice 2007-43
    On May 29, 2007, the Treasury Department and the IRS published 
Notice 2007-43, 2007-22 I.R.B. 1318, which provided interim guidance on 
the then-recently enacted section 30C. This notice provided specific 
guidance relating to the computation of the section 30C credit and the 
treatment for purposes of the credit of converted and dual-use 
refueling property.
B. Notice 2022-56
    On November 21, 2022, the Treasury Department and the IRS published 
Notice 2022-56, 2022-47 I.R.B. 480. This notice requested general 
comments on issues arising under section 30C, as amended by the IRA, as 
well as specific comments concerning: (1) depreciable property; (2) the 
definition of a ``single item''; (3) bidirectional charging equipment; 
(4) eligible census tracts; (5) recapture; and (6) miscellaneous 
topics. The Treasury Department and the IRS received 135 comments from 
industry participants, environmental groups, individual consumers, and 
other stakeholders. The Treasury Department and the IRS appreciate the 
commenters' interest and engagement on these issues. These comments 
have been considered carefully in the preparation of these proposed 
regulations.
C. Notice 2024-20
    On February 12, 2024, the Treasury Department and the IRS published 
Notice 2024-20, 2024-7 I.R.B. 668, to provide guidance on eligible 
census tracts for the section 30C credit and to announce the intent to 
propose regulations for the credit. This notice describes relevant 
census concepts, provides background and definitions for low-income 
communities and non-urban census tracts, and explains the census tract 
boundaries that apply for the relevant census tract determinations. The 
notice also provides taxpayers with a list of eligible census tracts in 
advance of the 2023 filing season and explains how taxpayers can 
identify the 11-digit census tract identifier for a location where a 
property is placed in service.

Explanation of Provisions

I. 30C Property, Recharging Property, Refueling Property

    Proposed Sec.  1.30C-1(a) would provide a general overview of the 
proposed section 30C regulations. Proposed Sec.  1.30C-1(b) would 
provide definitions that would apply for purposes of section 30C and 
the 30C regulations.
    The proposed regulations use the term ``30C property'' to describe 
property that is eligible for the section 30C credit. As proposed, the 
term 30C property would generally be synonymous with the statutory 
phrase ``qualified alternative fuel vehicle refueling property.'' 
Proposed Sec.  1.30C-1(b)(1) would define 30C property to include any 
property (other than real property and a building and its structural 
components) that is comprised of components that are functionally 
interdependent for ``refueling property'' or ``recharging property'' 
and, if applicable, an integral part of the refueling property or 
recharging property. For purposes of the proposed regulations, 
refueling property would mean property for the storage and dispensing 
of a qualified alternative fuel into the fuel tank of a motor vehicle 
propelled by such fuel, but only if the storage or dispensing of the 
fuel is at the point where such fuel is delivered into the fuel tank of 
the motor vehicle. Proposed Sec.  1.30C-1(b)(1)(i)(A); see also 
proposed Sec.  1.30C-1(b)(16)(i). Similarly, ``recharging property'' 
would mean property for the recharging of a motor vehicle propelled by 
electricity, but only if the property is located at the point where the 
motor vehicle is recharged. Proposed Sec.  1.30C-1(b)(1)(i)(B); see 
also proposed Sec.  1.30C-1(b)(16)(ii).
    Proposed Sec.  1.30C-1(b)(14) would provide that components are 
``functionally interdependent'' if the placing in service of each 
component is dependent upon the placing in service of each of the other 
components in order to refuel or recharge a motor vehicle. Proposed 
Sec.  1.30C-1(b)(15) would further provide that property is an 
``integral part'' of a refueling or recharging property if it is used 
directly in the intended function of the refueling property or 
recharging property and is essential to the completeness of this 
intended function, meets all of the requirements for 30C property 
described in proposed Sec.  1.30C-1(b)(1)(iii), is owned by the 
taxpayer that owns the refueling property or recharging property, and 
is specifically designed to be integrated with the refueling property 
or recharging property with which it is associated.
    Proposed Sec.  1.30C-1(b)(1)(iii) would provide a list of 
additional requirements that any eligible property must meet to be 30C 
property. First, the property must either be of a character subject to 
an allowance for depreciation or installed on property that is used as 
the principal residence of the taxpayer (within the meaning of section 
121).

[[Page 76763]]

Second, the property's original use must begin with the taxpayer. 
Proposed Sec.  1.30C-1(b)(18) would provide that ``original use'' has 
the same meaning as in Sec.  1.48-2(b)(7). Finally, the property must 
be placed in service in an eligible census tract (see discussion of 
eligible census tracts in part II.E of this Explanation of Provisions 
section).

II. General Rules

A. Amount of Credit
    Proposed Sec.  1.30C-2(a)(1) would provide that section 30C(a) 
allows a taxpayer to claim as a credit against the tax imposed by 
chapter 1 an amount equal to a percentage of the cost of any 30C 
property placed in service by the taxpayer during the taxable year, 
subject to certain dollar-amount limitations described in section 
30C(b) and proposed Sec.  1.30C-2(a)(4).
    Consistent with section 30C(a), proposed Sec.  1.30C-2(a)(2)(i) 
would provide that in the case of depreciable property, section 30C(a) 
allows as a credit against tax an amount equal to 6 percent of the cost 
of any 30C property placed in service by the taxpayer during the 
taxable year. Under proposed Sec.  1.30C-2(a)(2)(ii), the section 30C 
credit for the cost of any 30C property placed in service as part of a 
project that meets the PWA requirements is multiplied by 5. Property 
placed in service by certain tax-exempt organizations and governmental 
units described in section 50(b)(3) and (4) of the Code is treated as 
property of a character subject to an allowance for depreciation for 
purposes of calculating the section 30C credit. See sections 30C(e)(2) 
and 6417(d)(2) and Sec.  1.6417-2(c). Proposed Sec.  1.30C-2(a)(2)(iii) 
would provide that in the case of property of a character not subject 
to an allowance for depreciation, section 30C(a) allows as a credit 
against tax an amount equal 30 percent of the cost of any 30C property 
placed in service by the taxpayer during the taxable year provided that 
such property is installed on property that is used as the taxpayer's 
principal residence (within the meaning of section 121). Consistent 
with section 30C(b), proposed Sec.  1.30C-2(a)(4) would limit the 
section 30C credit with respect to any single item of 30C property 
placed in service by the taxpayer during the taxable year to $100,000 
for depreciable property and $1,000 for non-depreciable property.
    If the business use of the property is 50 percent or less, proposed 
Sec.  1.30C-2(a)(3) would provide rules for apportioning the section 
30C credit between business use and personal use. If the business use 
is more than 50 percent, then the section 30C credit would be treated 
under the proposed regulations only as a general business credit under 
section 30C(d)(1) (and subject to the $100,000 limitation). If the 
business use of the 30C property is 50 percent or less, then the 
property would be considered ``apportioned-use property'' under the 
proposed regulations and the taxpayer's section 30C credit for that 
taxable year for that 30C property would be apportioned in accordance 
with the taxpayer's use of the property between the general business 
credit under section 30C(d)(1) and the personal credit allowed under 
section 30C(a) pursuant to section 30C(d)(2). To be within these 
apportionment rules, the proposed regulations would provide that the 
30C property must be installed at the taxpayer's personal residence to 
qualify for the personal credit, but also be used for business use. For 
example, these proposed rules would apply to a taxpayer who operates a 
delivery service and installs an electric vehicle charger at her 
personal residence, which she uses to charge both her personal vehicle 
and her delivery vehicle.
    If 30C property is apportioned-use property, proposed Sec.  1.30C-
2(a)(4)(ii) would provide that the dollar-amount limitation must be 
apportioned in the same manner as the taxpayer's credit under section 
30C. For example, in the case of 30C property the business use of which 
is 40 percent of a taxpayer's total use of the property for the taxable 
year in which the property is placed in service, the portion treated as 
a general business credit under section 30C(d)(1) cannot exceed $40,000 
($100,000 multiplied by 40 percent), and the portion treated as a 
section 30C credit allowed under section 30C(a) cannot exceed $600 
($1,000 multiplied by 60 percent).
B. Single Item of Property and Calculating the Section 30C Credit
    As discussed in part II of the Background section of this preamble, 
one major change that the IRA made to section 30C was to allow the 
credit per single item of property, rather than per location. Thus, 
proposed Sec.  1.30C-2(b)(1) would provide that taxpayers may claim a 
section 30C credit if they place in service at least one single item of 
30C property during the taxable year.
    Section 30C does not define ``single item of property.'' In Notice 
2022-56, the Treasury Department and the IRS asked for comments on how 
to define a ``single item of property.'' Many commenters suggested 
that, for purposes of electric vehicle chargers, a ``single item'' 
should be defined as each charging port and that the item also should 
include functionally interdependent property as well as other property 
that commenters deemed necessary for the installation and use of the 
charger. The proposed regulations largely adopt these comments.
1. Definition of Single Item of 30C Property
    For purposes of calculating the section 30C credit, proposed Sec.  
1.30C-2(b)(1) would define a single item of 30C property as each 
charging port for recharging property, each fuel dispenser for 
refueling property, or each qualified alternative fuel storage property 
or electrical energy storage property.
    For purposes of the proposed regulations, a charging port would 
mean the system within a charger that charges one motor vehicle. Under 
proposed Sec.  1.30C-1(b)(6), a charging port may have multiple 
connectors, but it can provide power at its rated electrical output to 
charge only one motor vehicle through one connector at a time. Some 
chargers may have more than one port, in which case proposed Sec.  
1.30C-2(b)(2)(ii) would provide that the cost of the charger would need 
to be allocated among the number of ports for purposes of determining 
the credit. The Treasury Department and the IRS agree with the 
commenters that allowing the credit based on the number of motor 
vehicles that could be charged simultaneously at the port's rated 
electrical output is appropriate based on the IRA amendments to section 
30C to provide a credit limit per single item of property, rather than 
a broader term such as per charging property or per location, and 
consistent with one purpose of the IRA to expand incentives for 
taxpayers to transition to clean vehicles.
    The proposed regulations would define a fuel dispenser as the unit 
through which fuel is dispensed into the fuel tank of a motor vehicle 
if such unit is capable of fueling at or above the dispenser's minimum 
rate of fueling and has at least one hose and nozzle. Proposed Sec.  
1.30C-1(b)(12) would provide that a dispenser may optionally include a 
meter, valve, controller, and enclosure. These proposed regulations 
would use these definitions of ``fuel dispenser'' for refueling 
property and ``charging port'' for recharging property with the goal to 
similarly situate the accounting of credits among the eligible 
alternative fuels with consideration of their refueling technologies 
and station designs.
    Proposed Sec.  1.30C-1(b)(25) would define two types of storage 
property: qualified alternative fuel storage

[[Page 76764]]

property and electrical energy storage property. Under proposed Sec.  
1.30C-1(b)(25)(ii), ``qualified alternative fuel storage property'' 
would mean property used for the storage of such qualified alternative 
fuel. Under proposed Sec.  1.30C-1(b)(20), qualified alternative fuel 
would generally refer to all clean-burning fuels (as defined in 
proposed Sec.  1.30C-1(b)(7)) except electricity. Proposed Sec.  1.30C-
1(b)(25)(iii) would define ``electrical energy storage property'' to 
mean property that receives, stores, and delivers energy for conversion 
to electricity. Under proposed Sec.  1.30C-1(b)(25), both types of 
storage property would be required to be located at the point where the 
motor vehicle is refueled or recharged. Proposed Sec.  1.30C-1(b)(16) 
would provide that this requirement is generally satisfied if the 
storage property is located at the same or an immediately adjacent 
physical address as the location where the fuel is delivered into the 
fuel tank of the motor vehicle or where the motor vehicle is recharged.
    Former section 179A(d)(3)(A), adopted by reference into section 
30C(c), uses the language ``for the storage or dispensing of a clean-
burning fuel into the fuel tank of a motor vehicle propelled by such 
fuel'' in its definition of qualified clean-fuel vehicle refueling 
property, indicating that clean-burning fuel storage property is a 
separate item of qualified clean-fuel vehicle refueling property. 
Former section 179A(d)(3)(B) uses the language ``for the recharging of 
motor vehicles propelled by electricity'' as a separate prong of this 
same definition, indicating that electrical energy storage property is 
not a separate item of qualified clean-fuel vehicle refueling property. 
However, former section 179A(e)(1) includes electricity within the 
definition of clean-burning fuels, such that electric vehicle refueling 
property could be eligible property under either former section 
179A(d)(3)(A) (where storage is specifically mentioned) or (B) (where 
storage is not specifically mentioned). These proposed regulations 
would provide that the cost of electrical energy storage property that 
is used for charging motor vehicles is creditable as a separate item of 
property under section 30C. Electrical energy storage can be used for 
electric vehicle charging to smooth costs and to minimize the impact on 
the electrical grid by taking the energy from the grid during non-peak 
hours when energy is cheaper and storing the energy for use during 
higher cost peak hours. Thus, electrical energy storage can be a 
critical part of electric vehicle recharging infrastructure. Further, 
treating all types of storage as a separate item of property is 
consistent with the language of former section 179A(d). Finally, 
allowing electrical energy storage property as a separate item of 
property treats storage property consistently across various types of 
clean-burning fuel.
    These proposed regulations would also modify proposed Sec. Sec.  
1.48-9 and 1.48E-2 to provide that energy storage technology does not 
include energy storage property for which the taxpayer claims a credit 
under section 30C. Energy storage technology may be eligible for an 
investment credit under sections 48 and 48E, subject to certain 
limitations. However, sections 48 and 48E exclude from the definition 
of energy storage technology property primarily used in the 
transportation of goods or individuals and not for the production of 
electricity. See sections 48(c)(6)(A) and 48E(c)(2). The section 48 
proposed regulations did not propose a rule interpreting this exclusion 
but requested comments on its scope.\2\ Commenters to the section 48 
proposed regulations requested that batteries and other energy storage 
technology that may be used to charge or recharge electric vehicles be 
eligible for the section 48 credit because it may be more valuable than 
the section 30C credit in certain cases; however, commenters did not 
request that the same property be eligible for both sections 48 and 
30C. The Treasury Department and the IRS agree that Congress did not 
intend to allow multiple credits for investments in the same energy 
storage property associated with vehicle recharging or refueling, as 
evidenced by the sections 48 and 48E exclusion for property primarily 
used in the transportation of goods or individuals and not for the 
production of electricity. Property for which a section 30C credit is 
claimed is property primarily used in the transportation of goods or 
individuals and not for the production of electricity, because the 
section 30C credit is limited to property ``for the storage or 
dispensing of a clean-burning fuel into the fuel tank of a motor 
vehicle propelled by such fuel'' or ``for the recharging of motor 
vehicles propelled by electricity.'' See sections 30C(c)(1) and 
179A(d)(3). Accordingly, the proposed regulations would clarify that 
energy storage property for which a section 30C credit is claimed is 
property primarily used in the transportation of goods or individuals 
and not for the production of electricity, and, therefore, is not 
energy storage technology for purposes of sections 48 and 48E. However, 
energy storage property for which a section 30C credit is not claimed, 
could be credit-eligible energy storage technology under sections 48 
and 48E if it meets the requirements under those provisions.
---------------------------------------------------------------------------

    \2\ On November 22, 2023, the Treasury Department and the IRS 
published in the Federal Register (88 FR 82188) the proposed rule 
``Definition of Energy Property and Rules Applicable to the Energy 
Credit'' under section 48 (section 48 proposed regulations).
---------------------------------------------------------------------------

2. Associated Property and Calculating the Credit
    Under proposed Sec.  1.30C-2(b)(1), the amount of the section 30C 
credit would include the cost of functionally interdependent property 
and, if applicable, any property that is an integral part of refueling 
or recharging property that is part of the 30C property placed in 
service by the taxpayer during the year (associated property). These 
costs would be included in the section 30C credit for a single item to 
the extent that they are directly attributable and traceable to that 
particular single item of 30C property. The cost of associated property 
that is directly attributable and traceable to more than one item of 
30C property would be allocated among the relevant items based on the 
cost of each single item of 30C property. In no case would the total 
cost of the associated property divided among different items of 30C 
property exceed 100 percent of the cost of the associated property.
    Proposed Sec.  1.30C-2(b)(3) would provide that the section 30C 
credit is the lesser of the ``tentative section 30C credit,'' or the 
$100,000 or $1,000 limit (as appropriate). The tentative section 30C 
credit for each single item of 30C property would be the sum of the 
cost of the single item of 30C property, the cost of any associated 
property directly attributable and traceable to the single item of 30C 
property, and the cost of a ratable share of allocated associated 
property, multiplied by the applicable credit rate (6 percent or 30 
percent).
C. Bidirectional Charging Equipment
    Notice 2022-56 requested comments on the factors and definitions 
that should be considered in developing guidance for bidirectional 
charging equipment (that is, property that is capable of charging the 
battery of an electric vehicle and also allows the discharging of 
electricity from such battery to an electric load external to such 
motor vehicle). See section 30C(c)(2). Many of the comments suggested 
that the regulations provide that all costs, including any costs for 
bidirectional equipment contained within the motor vehicle (onboard 
equipment) be creditable.

[[Page 76765]]

    The IRA amendments clarify that a charger that otherwise meets the 
requirements of 30C property is not excluded simply because the charger 
also allows discharging of electricity from the motor vehicle's 
battery, but the IRA amendments do not expand the section 30C credit in 
the manner suggested by commenters. In particular, section 30C(c)(2) 
uses the language ``shall not fail to be treated,'' suggesting a 
clarification rather than a significant expansion of the credit. In 
addition, the Code contains separate tax credits for electric vehicles, 
including credits targeted to the electric vehicle battery. See 
sections 25E, 30D, and 45W. Thus, proposed Sec.  1.30C-1(b)(16)(ii) 
would exclude from the definition of recharging property components 
that are located within a motor vehicle and are necessary for the 
propulsion of that vehicle, including onboard equipment.
D. Property for the Refueling of Certain Two- and Three-Wheeled 
Vehicles
    Section 30C(f) provides additional special rules for electric 
charging stations for certain vehicles with two or three wheels. 
Section 30C(f)(1) provides that the term ``qualified alternative fuel 
vehicle refueling property'' includes property described in section 
30C(c) for the recharging of a motor vehicle described in section 
30C(f)(2), but only if such property meets the requirements of section 
30C(a)(2) and is of a character subject to depreciation. However, 
section 30C(a)(2) does not exist. The Treasury Department and the IRS 
view this as a clerical error and, as a result, will apply section 
30C(f)(1) without giving effect to section 30C(f)(1)(A). Thus, proposed 
Sec.  1.30C-2(b)(5) would provide that 30C property also includes 
depreciable property that is for the recharging of a two- or three-
wheeled electric vehicle because there are no requirements of section 
30C(a)(2) under current law.
E. Eligible Census Tracts
    Consistent with section 30C(c)(3)(B), proposed Sec.  1.30C-2(c)(1) 
would provide that 30C property must be placed in service in an 
eligible census tract to qualify for the section 30C credit. Eligible 
census tracts include any population census tract that qualifies as a 
low-income community census tract or that is a non-urban census tract.
1. Low-Income Census Tracts
    Proposed Sec.  1.30C-2(c)(2)(i) would provide that a population 
census tract is an eligible ``low-income community census tract'' for 
purposes of the section 30C credit if the population census tract meets 
the requirements of the NMTC under section 45D(e)(1), which requires 
that the poverty rate for such tract is at least 20 percent, or in the 
case of a tract not located within a metropolitan area, the median 
family income for such tract does not exceed 80 percent of statewide 
median family income, or in the case of a tract located within a 
metropolitan area, the median family income for such tract does not 
exceed 80 percent of the greater of statewide median family income or 
the metropolitan area median family income. Proposed Sec.  1.30C-
2(c)(2)(ii) would provide that census tracts located within a high 
migration rural county, as defined under section 45D(e)(5), are low-
income community census tracts if the median family income for the 
tract does not exceed 85 percent of statewide median family income.
    Based on the ACS 5-year low-income community data, census tracts as 
described under section 45D(e)(1) can be identified and they are 
published by the CDFI Fund. Additionally, the CDFI Fund has published, 
beginning with the 2016-2020 NMTC tracts, the census tracts that 
qualify as low-income census tracts because the census tracts are 
located in high migration rural counties as described under section 
45D(e)(5). However, after consultation with the CDFI Fund, the Treasury 
Department and the IRS cannot identify with verifiable accuracy the 
population census tracts that currently meet the requirements of 
section 45D(e)(2) and (4). Accordingly, the Treasury Department and the 
IRS request comments on whether and how the population census tracts 
named under section 45D(e)(2) and (4) could be identified accurately to 
qualify as eligible census tracts for the credit under 30C. The areas 
described in section 45D(e)(3) are not population census tracts as 
required by section 30C(c)(3)(B)(i), and therefore do not qualify as 
eligible census tracts for purposes of the section 30C credit.
2. Non-Urban Area
    Proposed Sec.  1.30C-2(c)(3) would provide that ``non-urban census 
tract'' means any population census tract in which at least 10 percent 
of the census blocks are not designated as urban areas. As the 
Secretary of Commerce and Census Bureau no longer identify census 
tracts as urban or non-urban, the Treasury Department, in consultation 
with the Census Bureau, determined a percentage of census blocks within 
a census tract to determine if a census tract is not an urban area 
under section 30C(c)(3)(B)(ii). The Treasury Department and IRS 
received comments on this issue in response to Notice 2022-56. The 
threshold of 10 percent of census blocks being not an urban area to 
determine if a census tract is a non-urban area census tract is within 
the range of percentages suggested by commenters.
3. Determination of Eligible Census Tracts
    Proposed Sec.  1.30C-2(c)(4) would provide that the IRS will 
periodically publish lists of specific census tracts that are low-
income census tracts or non-urban census tracts along with instructions 
on how taxpayers may determine their census tract identifying numbers. 
Census tract data and boundaries are expected to be updated prior to 
January 1, 2033, when the section 30C credit is planned to expire. When 
census tract data changes, the IRS will publish updated lists of the 
eligible census tracts that qualify as low-income communities or non-
urban areas, and the 11-digit census tract GEOIDs associated with each 
census tract based on the applicable census data.
4. Request for Comments
    There is a variety of equipment available to recharge electric 
vehicles. Some are installed at a fixed location (that is, stationary) 
and may be mounted upon concrete pads or installed as fixtures on the 
walls of buildings. Some recharging equipment are mobile; however, the 
degree to which such equipment are mobile varies greatly depending on 
their use and purpose. Mobile chargers may be transported to allow for 
the dispensing of electricity closer to where a vehicle is parked, in 
contrast to having to drive a vehicle to stationary equipment. Mobile 
chargers may be physically connected to a source of electricity at a 
physical address or, conversely, receive electricity from a battery 
that is temporarily separated from a physical address.
    The requirement under section 30C(c)(3) that property must be 
placed in service in an eligible census tract to qualify for the 
section 30C credit suggests that the property must also be used in the 
eligible census tract. However, depending on its design and purpose, 
mobile equipment may not always be used in the eligible census tract in 
which it was placed in service. The Treasury Department and the IRS 
request comments on how mobile equipment could satisfy the geographic 
requirement that 30C property must be placed in service in an eligible 
census tract, and request comments on any related rules that should be 
adopted, particularly with respect to any administrative requirements 
to ensure

[[Page 76766]]

only qualifying mobile equipment is credited.

III. Prevailing Wage and Registered Apprenticeship Requirements

    The proposed regulations would supplement the final PWA regulations 
in Sec.  1.30C-3 to further define ``qualified alternative fuel vehicle 
refueling project'' (30C project) for purposes of satisfying the PWA 
requirements. Proposed Sec.  1.30C-3(b)(2) would provide that multiple 
30C properties will be treated as a single 30C project if the items of 
property are constructed and operated on a contiguous piece of land, 
owned by a single taxpayer (subject to the related party rule), placed 
in service in a single taxable year, and one or more of the following 
factors is present: (1) the properties are described in one or more 
common environmental or other regulatory permits; (2) the properties 
are constructed pursuant to a single master construction contract; or 
(3) the construction of the properties is financed pursuant to the same 
loan agreement. Under the related party rule in proposed Sec.  1.30C-
3(b)(3), related taxpayers are treated as one taxpayer in determining 
whether multiple items of 30C property are treated as a single project. 
For these purposes, related taxpayers are treated as a single taxpayer 
if they are members of a group of trades or businesses that are under 
common control (as defined in Sec.  1.52-1(b)). Proposed Sec.  1.30C-
3(b)(3).
    The proposed regulations would limit a 30C project to encompass 
only the items of property that are placed in service within the same 
year because 30C is an annual credit. This approach is consistent with 
the fact that the section 30C credit is available only in the year the 
property is placed in service, even if costs related to the property 
are incurred in earlier years.
    Additionally, the proposed regulations would clarify that if a 
seller of 30C property, the use of which is described in section 
50(b)(3) or (4) (generally tax-exempt entities, government entities, 
and foreign persons and entities), is treated as the taxpayer that 
placed such property in service under section 30C(e)(2), the seller is 
the taxpayer required to comply with the PWA recordkeeping 
requirements. Proposed Sec.  1.30C-3(c). See part IV.B of this 
Explanation of Provisions for additional discussion of cases in which a 
seller may be treated as the taxpayer that placed 30C property in 
service under section 30C(e)(2). This clarification is consistent with 
Sec.  1.45-12, which provides that a taxpayer claiming or transferring 
(under section 6418) an increased credit must maintain and preserve 
records sufficient to establish compliance with the statutory 
requirements. Further, unlike a transferee under section 6418, a person 
who sells 30C property, the use of which is described in section 
50(b)(3) or (4), would generally have access to, and control over, the 
relevant records.
    The proposed regulations would also conform the terminology used in 
the final PWA regulations in Sec.  1.30C-3(a) and (b) to the 
terminology used in these proposed regulations. The proposed 
regulations do not modify any of the rules in the final PWA regulations 
other than proposed Sec.  1.30C-3, and the Treasury Department and the 
IRS are not reopening the comment period on the final PWA regulations 
generally.

IV. Special Rules

A. Recapture
    Section 30C(e)(5) provides that recapture rules similar to the 
rules of former section 179A(e)(4) apply; however, former section 
179A(e)(4) merely granted authority to provide recapture rules, 
stating, ``The Secretary shall, by regulations, provide for recapturing 
the benefit of any deduction allowable under subsection (a) with 
respect to any property which ceases to be property eligible for such 
deduction.'' Accordingly, as noted previously in the Authority section, 
the Treasury Department and the IRS understand section 30C(e)(5) to be 
a delegation of authority to the Secretary, by cross-reference to 
former section 179A(e)(4), to provide recapture rules under section 
30C.
    The Secretary exercised the authority under former section 
179A(e)(4) in issuing former Sec.  1.179A-1 (removed by TD 9849 on 
March 11, 2019). Proposed Sec.  1.30C-4(b) uses the rules of former 
Sec.  1.179A-1 as a starting point (in particular, what constitutes a 
recapture event), with appropriate modifications (for example, to 
account for apportioned use property and property used by tax-exempt or 
government entities, neither of which were at issue in former section 
179A or the regulations thereunder). In general, proposed Sec.  1.30C-
4(b) would require taxpayers to recapture the benefit of any section 
30C credit allowed with respect to any property that ceases to be 
property eligible for such credit. If a recapture event occurs with 
respect to a taxpayer's 30C property, then the taxpayer must include 
the recapture amount in taxable income for the taxable year in which 
the recapture event occurs. Proposed Sec.  1.30C-4(b)(1).
    Proposed Sec.  1.30C-4(b)(2) would provide that a recapture event 
generally occurs if, within three years of the property being placed in 
service: (1) the taxpayer claiming the section 30C credit modifies the 
property such that the property no longer qualifies as 30C property; 
(2) unless the property is subject to section 6417(d)(2)(B), a 
depreciable property ceases to be used predominantly in a trade or 
business (meaning that 50 percent or more of the use of the property in 
a taxable year is for use other than in a trade or business); (3) if 
the property is apportioned-use property, the property completely 
ceases to be used in a trade or business, but continues to be used for 
personal use; or (4) the taxpayer sells or disposes of the 30C property 
and the taxpayer knows or has reason to know that the property will 
cease to qualify as 30C property for one of the reasons listed in (1) 
or (2) of this paragraph. Except as provided in (4), a sale or other 
disposition (including a disposition by reason of an accident or other 
casualty) of 30C property is not a recapture event. Proposed Sec.  
1.30C-4(b)(3) would clarify that property is not subject to the 
recapture provisions solely because it is placed in service in a 
location that subsequently ceases to be in a qualified census tract. 
Thus, a change in the identification of eligible census tracts alone 
would not require a taxpayer to recapture the section 30C credit.
    Proposed Sec.  1.30C-4(b) would also provide a formula for 
determining the amount of the recapture and adjustments to basis 
following a recapture event.
    The Treasury Department and the IRS request comments on how the 
recapture rules should apply where the person who sells 30C property to 
a tax-exempt or government entity is treated as the taxpayer placing 
the 30C property in service, including any notifications that should be 
required.
B. Property Used by a Tax-Exempt or Government Entity
    Section 30C(e)(2) allows a person who sells 30C property that is 
used in a manner described in section 50(b)(3) or (4) (generally 
property used by tax-exempt organizations, government entities, or 
foreign persons or entities), to be eligible for the section 30C 
credit, but only if the seller clearly discloses in a document the 
amount of any such credit allowable. Use of this rule typically results 
in a lower upfront cost to a tax-exempt or government entity for the 
30C property, while allowing the seller to claim the section 30C 
credit.
    Section 6417, added by the IRA, provides a benefit to applicable 
entities (defined in section 6417(d)(1)(A) and Sec.  1.6417-1(c)), 
which include certain

[[Page 76767]]

tax-exempt and government entities that are described in section 
50(b)(3) or (4). Section 6417 allows applicable entities to make an 
election to be treated as making a payment of tax in the amount of 
certain applicable credits, including the section 30C credit, which 
results in a refund equal to the amount of the applicable credits if 
such entity has no other tax liability. Section 6417(d)(2)(A) requires 
an entity making an election to determine an applicable credit without 
regard to section 50(b)(3) or (b)(4)(A)(i), effectively turning those 
sections off for purposes of calculating an applicable credit. Although 
section 30C refers to section 50(b)(3) and (4) in section 30C(e)(2) to 
describe property used in a certain manner by certain persons, the 
section 30C credit is always determined without regard to section 
50.\3\ However, for 30C property used by tax-exempt and government 
entities (that is, property the use of which is described in section 
50(b)(3) or (4)), these proposed regulations would treat such 30C 
property as not being used in a manner described in section 50(b)(3) or 
(4) if the tax-exempt or government entity makes an elective payment 
election under section 6417.
---------------------------------------------------------------------------

    \3\ Section 50(b) provides that no credit ``shall be determined 
under this subpart'' for certain property. Section 50(b) is in 
subpart E of part IV of subchapter A of chapter 1. Section 30C is in 
subpart B of part IV of subchapter A of chapter 1.
---------------------------------------------------------------------------

    Congress appears to have provided tax-exempt and government 
entities the ability to choose whether a reduced purchase price that 
may result under section 30C(e)(2) or an elective payment election 
under section 6417 is more beneficial. To facilitate that choice, and 
consistent with section 6417(d)(2)(A), proposed Sec.  1.30C-4(c)(2) 
would treat the use of 30C property by a tax-exempt or government 
entity as not being described in section 50(b)(3) or (4), and therefore 
not available for the seller to be treated as the taxpayer placing the 
30C property in service, if such entity notifies the seller in writing 
of its intent to make the section 6417 election.
    The section 30C credit is only allowed once per 30C property. Thus, 
if the tax-exempt or government entity notifies the seller of its 
intent to make an elective payment election pursuant to section 6417(a) 
with respect to the section 30C credit, the seller cannot claim any 
credit allowable under section 30C(a) with respect to such property.
    The Treasury Department and the IRS request comments on whether 
this approach is practical for entities described in section 50(b)(3) 
and (b)(4)(A)(i) and for those who sell them 30C property. The Treasury 
Department and the IRS also request comments on the notification 
process described above, including the timing of such notifications and 
whether transition rules may be necessary for projects for which 
contracts have already been signed.
C. Dual-Use Property
    Notice 2007-43 provided rules for the application of the section 
30C credit to dual-use property, generally meaning property that is 
used for a creditable purpose and a non-creditable purpose. The 
proposed regulations would generally incorporate the dual-use rules 
from the notice, with some modifications to account for subsequent 
amendments to section 30C (such as the inclusion of transportation fuel 
as defined in section 45Z(d)(5)).
    Proposed Sec.  1.30C-4(d) would provide separate rules for (1) 
dual-use property that is used for dispensing or storing both qualified 
alternative fuel and conventional fuel, (2) dual-use property that is 
used to store qualified alternative fuel that is dispensed into the 
fuel tank of a motor vehicle and to store fuel that is transported to 
other locations, and (3) dual-use property that is used to store or 
transmit electricity for recharging a motor vehicle and for other, non-
creditable, purposes. In each case, the creditable portion of the cost 
of such property is limited to the increase in the cost of the dual-use 
property over the cost of equivalent property used only for the non-
creditable use. For example, if a taxpayer owns a fuel tank that is 
used to store fuel that is used to refuel motor vehicles at the point 
where the motor vehicles are refueled, but is also used to store fuel 
that the taxpayer transports to other locations, then the cost of the 
fuel tank is taken into account only to the extent the cost exceeds the 
cost of a tank used only to store fuel transported to other locations. 
The Treasury Department and the IRS are aware that in some cases, this 
will result in the dual-use property's cost not being creditable under 
section 30C. However, the Treasury Department and the IRS are of the 
view that Notice 2007-43 has provided a workable and administrable rule 
for most of the existence of the section 30C credit to date.

V. Proposed Amendments to Regulations Under Other Code Sections

    The proposed regulations would also make minor conforming changes 
to proposed Sec. Sec.  1.48-9 and 1.48E-2, as well as to Sec. Sec.  
1.6417-6 and 1.6418-5 to comport with the proposed section 30C 
regulations.

Effect on Other Documents

    Notice 2007-43, 2007-22 I.R.B. 1318, is withdrawn.

Proposed Applicability Dates

    Except as otherwise provided, these regulations are proposed to 
apply to property placed in service in taxable years ending after the 
date of publication of the Treasury Decision adopting these rules as 
final rules in the Federal Register.

Special Analyses

I. Regulatory Planning and Review

    Pursuant to the Memorandum of Agreement, Review of Treasury 
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory 
actions issued by the IRS are not subject to the requirements of 
section 6 of Executive Order 12866, as amended. Therefore, a regulatory 
impact assessment is not required.

II. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) 
generally requires that a Federal agency obtain the approval of the 
Office of Management and Budget (OMB) before collecting information 
from the public, whether such collection of information is mandatory, 
voluntary, or required to obtain or retain a benefit. A Federal agency 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information unless it displays a valid control number 
assigned by the OMB.
    The collections of information in these proposed regulations 
contain reporting and recordkeeping requirements. The recordkeeping 
requirements mentioned within these proposed regulations are considered 
general tax records under Sec.  1.6001-1(e). These records are required 
for the IRS to validate that taxpayers have met the regulatory 
requirements and are entitled to a credit under section 30C. For PRA 
purposes, general tax records are already approved by OMB under 1545-
0047 for tax-exempt organizations and government entities; 1545-0074 
for individuals; and under 1545-0123 for business entities.
    These proposed regulations mention requirements to claim the credit 
in Sec.  1.30C-2(e), using Form 8911, Alternative Fuel Vehicle 
Refueling Property Credit (or successor form as the Secretary 
prescribes). This form is approved under 1545-0047 for tax-exempt 
organizations and governmental entities; 1545-0074 for individuals; and 
1545-0123 for business entities. These proposed regulations are not 
changing

[[Page 76768]]

or creating new collection requirements not already approved by OMB. 
These proposed regulations also mention recapture procedures as 
detailed in Sec.  1.30C-4(b). These recapture procedures are also 
performed using Form 8911, Alternative Fuel Vehicle Refueling Property 
Credit (or successor form as the Secretary prescribes). This form is 
approved under 1545-0047 for tax-exempt organizations and governmental 
entities; 1545-0074 for individuals; and 1545-0123 for business 
entities. These proposed regulations are not changing or creating new 
collection requirements not already approved by OMB.
    These proposed regulations also include third-party disclosures if 
a tax-exempt or government entity makes an election under section 6417 
to be treated as making a payment against the tax. This third-party 
disclosure and its associated burden will be included in form and 
instructions for Form 8911 (or successor form as the Secretary 
prescribes) and will be submitted to OMB under 1545-0047, 1545-0074, 
and 1545-0123 in accordance with the PRA procedures under 5 CFR 
1320.10.
    With respect to the PWA provisions in Sec.  1.30C-3, these 
requirements are approved under 1545-2315. With respect to the elective 
pay provisions in Sec.  1.30C-4(c)(2), there is no form associated with 
this collection, but will be collected in the portal only and is 
approved under 1545-2310. These proposed regulations are not changing 
or creating new collection requirements not already approved by OMB.

III. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the 
Administrative Procedure Act (5 U.S.C. 551 et seq.) and that are likely 
to have a significant economic impact on a substantial number of small 
entities. Unless an agency determines that a proposal is not likely to 
have a significant economic impact on a substantial number of small 
entities, section 603 of the RFA requires the agency to present an 
initial regulatory flexibility analysis (IRFA) of the proposed rule.
    Pursuant to the RFA, the Secretary hereby certifies that these 
proposed regulations will not have a significant economic impact on a 
substantial number of small entities within the meaning of section 
601(6) of the Regulatory Flexibility Act. Pursuant to section 7805(f), 
this notice of proposed rulemaking has been submitted to the Chief 
Counsel for the Office of Advocacy of the Small Business Administration 
for comment on their impact on small business.
    The RFA directs agencies to provide a description of and, if 
feasible, an estimate of, the number of small entities that may be 
affected by the proposed rules, if adopted. Section 30C and these 
proposed regulations may affect a variety of different entities across 
multiple industries, including individuals, tax-exempt entities, small 
businesses, partnerships, and large businesses. Although there is 
uncertainty as to the exact number of small businesses within this 
group, the current estimated number of respondents to these proposed 
rules is 4,000 small business entities, based on a review of filing 
information since 2019 and extrapolations into the future.
    Small business entities to claim the section 30C credit must 
satisfy reporting requirements that are the same as those faced by 
individuals accessing the section 30C credit. Taxpayers will continue 
to file Form 8911, Alternative Fuel Vehicle Refueling Property Credit 
(or successor form as the Secretary prescribes), as was the case for 
the section 30C credit prior to amendments made by the IRA and prior to 
the publication of these proposed regulations. The estimated burden for 
individual and business taxpayers filing this form is approved under 
OMB control number 1545-0074 and 1545-0123.
    Although the Treasury Department and IRS estimate that 4,000 small 
business entities will claim the credit under section 30C in a given 
year, the proposed regulations will not have a significant economic 
impact on such entities. The proposed regulations do not impose any 
additional burden on taxpayers outside of what is provided by the 
statute. For example, the IRA modified section 30C(c)(3) to require 
property to be located in eligible census tracts. These proposed 
regulations provide guidance regarding low-income areas, non-urban 
areas, and the determination of eligible census tracts, but do not 
impose any additional requirements beyond what is set forth in the 
statute that would give rise to significant economic impacts on small 
business entities. Additionally, these proposed regulations provide 
rules regarding recapture of the credit, but recapture is provided for 
in section 30C(e)(5), and these proposed rules merely provide the 
framework for the statutorily required recapture.
    The Treasury Department and IRS have determined that the continued 
requirement to file a Form 8911, Alternative Fuel Vehicle Refueling 
Property Credit (or successor form as the Secretary prescribes), is 
unlikely to involve significant administrative costs beyond what was 
previously required.
    Accordingly, the Secretary certifies that these proposed 
regulations will not have a significant economic impact on a 
substantial number of small entities. The Treasury Department and the 
IRS request comments that provide data, other evidence, or models that 
provide insight on this issue.

IV. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that agencies assess anticipated costs and benefits and take certain 
other actions before issuing a final rule that includes any Federal 
mandate that may result in expenditures in any one year by a State, 
local, or Tribal government, in the aggregate, or by the private 
sector, of $100 million in 1995 dollars, updated annually for 
inflation. This proposed rule does not include any Federal mandate that 
may result in expenditures by State, local, or Tribal governments, or 
by the private sector in excess of that threshold.

V. Executive Order 13132: Federalism

    Executive Order 13132 (Federalism) prohibits an agency (to the 
extent practicable and permitted by law) from promulgating any 
regulation that has federalism implications, unless the agency meets 
the consultation and funding requirements of section 6 of the Executive 
order, if the rule either imposes substantial, direct compliance costs 
on State and local governments, and is not required by statute, or 
preempts State law. This proposed rule does not have federalism 
implications and does not impose substantial direct compliance costs on 
State and local governments or preempt State law within the meaning of 
the Executive order.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS as prescribed in this preamble under the ADDRESSES heading.
    The Treasury Department and the IRS request comments on all aspects 
of the proposed regulations. Any comments submitted will be made 
available at https://www.regulations.gov or upon request.
    A public hearing will be scheduled if requested in writing by any 
person who timely submits electronic or written

[[Page 76769]]

comments. Requests for a public hearing are also encouraged to be made 
electronically. If a public hearing is scheduled, notice of the date 
and time for the public hearing will be published in the Federal 
Register.

Statement of Availability of IRS Documents

    The IRS Revenue Procedures, Notices, and other guidance cited in 
this preamble are published in the Internal Revenue Bulletin and is 
available from the Superintendent of Documents, U.S. Government 
Publishing Office, Washington, DC 20402, or by visiting the IRS website 
at https://www.irs.gov.

Drafting Information

    The principal author of the proposed regulations is the Office of 
Associate Chief Counsel (Passthroughs & Special Industries). However, 
other personnel from the Treasury Department and the IRS participated 
in the development of the proposed regulations.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, the Treasury Department and the IRS propose to amend 
26 CFR part 1 as follows:

PART 1--Income Taxes

0
Paragraph 1. The authority citation for part 1 is amended by:
0
1. Adding entries for Sec. Sec.  1.30C-1 and 1.30C-2 in numerical 
order;
0
2. Revising the entry for Sec.  1.30C-3; and
0
3. Adding entries for Sec. Sec.  1.30C-4, 1.48-9(e)(10), and 1.48E-
2(g)(6) in numerical order.
    The additions and revisions read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
* * * * *
    Section 1.30C-1 also issued under 26 U.S.C. 30C(h).
    Section 1.30C-2 also issued under 26 U.S.C. 30C(h).
    Section 1.30C-3 also issued under 26 U.S.C. 30C(g)(4) and (h).
    Section 1.30C-4 also issued under 26 U.S.C. 30C(e)(5) and (h).
* * * * *
    Section 1.48-9(e)(10) also issued under 26 U.S.C. 48(a)(16).
* * * * *
    Section 1.48E-2(g)(6) also issued under 26 U.S.C. 48E(i).
* * * * *
0
Par. 2. Sections 1.30C-0 through 1.30C-2 are added to read as follows:
* * * * *
1.30C-0 Table of contents.
1.30C-1 Credit for alternative fuel vehicle refueling property; 
Definitions.
1.30C-2 General rules.
* * * * *


Sec.  1.30C-0  Table of contents.

    This section lists the captions contained in Sec. Sec.  1.30C-1 
through 1.30C-4.

Sec.  1.30C-1 Credit for alternative fuel vehicle refueling 
property; Definitions.

    (a) In general.
    (b) Definitions.
    (1) 30C property.
    (i) Applicable property.
    (ii) Property integral to refueling property or recharging 
property.
    (iii) Other requirements.
    (2) 45Z transportation fuel.
    (3) Building and structural components.
    (4) Census block.
    (5) Charger.
    (6) Charging port.
    (7) Clean burning fuel.
    (8) Connector.
    (9) Conventional fuel.
    (10) Conventional refueling property.
    (11) Electric vehicle.
    (12) Fuel dispenser.
    (13) Fuel tank.
    (14) Functionally interdependent.
    (15) Integral part.
    (16) Located at the point.
    (i) Refueling property.
    (ii) Recharging property.
    (17) Motor vehicle.
    (i) In general.
    (ii) 2 or 3-wheeled motor vehicle.
    (18) Original use.
    (19) Population census tract.
    (20) Qualified alternative fuel.
    (21) Qualifying biodiesel mixture.
    (22) Section 30C credit.
    (23) Section 30C regulations.
    (24) Statutory references.
    (i) Chapter 1.
    (ii) Code.
    (25) Storage property.
    (i) In general.
    (ii) Qualified alternative fuel storage property.
    (iii) Electrical energy storage property.
    (c) Applicability date.

Sec.  1.30C-2 General rules.

    (a) Amount of credit.
    (1) In general.
    (2) Applicable percentages.
    (i) Property of a character subject to an allowance for 
depreciation.
    (ii) Projects meeting the prevailing wage and apprenticeship 
requirements.
    (iii) Property not subject to an allowance for depreciation.
    (3) Apportionment of section 30C credit between business and 
personal use.
    (i) Business use portion.
    (ii) Personal use portion.
    (4) Dollar-amount limitations.
    (i) In general.
    (ii) Apportioned-use property.
    (b) 30C property rules.
    (1) Single item of 30C property.
    (2) Associated property.
    (3) Calculating the section 30C credit.
    (4) Special rule for bidirectional charging equipment.
    (5) Property for the refueling of certain two- and three-wheeled 
motor vehicles.
    (6) Placed in service.
    (i) Depreciable property.
    (ii) Non-depreciable property.
    (c) Eligible census tracts.
    (1) Geographic requirement.
    (2) Low-income community census tract.
    (i) In general.
    (ii) Modification for high migration rural counties.
    (3) Non-urban census tract.
    (4) Determination of eligibility of specific census tracts.
    (d) Reduction in basis.
    (e) Examples.
    (1) Example 1.
    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (2) Example 2.
    (i) Facts.
    (ii) Analysis.
    (3) Example 3.
    (i) Facts.
    (ii) Analysis.
    (4) Example 4.
    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (5) Example 5.
    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (6) Example 6.
    (i) Facts.
    (ii) Analysis.
    (7) Example 7.
    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (8) Example 8.
    (i) Facts.
    (ii) Analysis.
    (9) Example 9.
    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (10) Example 10.
    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (11) Example 11.
    (i) Facts.
    (ii) Analysis.
    (12) Example 12.
    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (13) Example 13.
    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (14) Example 14.

[[Page 76770]]

    (i) Facts.
    (ii) Analysis.
    (A) 30C property.
    (B) Calculation of the credit.
    (15) Example 15.
    (i) Facts.
    (ii) Analysis.
    (f) Claim requirements.
    (g) Applicability date.

Sec.  1.30C-3 Rules relating to the increased credit amount for 
prevailing wage and apprenticeship.

    (a) In general.
    (b) 30C project requirements.
    (1) In general.
    (2) Determination of a project.
    (3) Related taxpayers.
    (i) Definition.
    (ii) Related taxpayer rule.
    (c) Coordination with 30C(e)(2) and Sec.  1.30C-4(c).
    (d) Examples.
    (1) Example 1.
    (i) Facts.
    (ii) Analysis.
    (2) Example 2.
    (i) Facts.
    (ii) Analysis.
    (e) Applicability date.

Sec.  1.30C-4 Special rules.

    (a) No credit allowable in certain circumstance.
    (1) Property used outside the United States.
    (2) Property placed in service in a United States territory.
    (3) Section 179.
    (b) Recapture.
    (1) In general.
    (2) Recapture event.
    (3) Property placed in service in a location that ceases to be 
in a qualified census tract.
    (4) Recapture amount.
    (i) In general.
    (ii) Special rule for apportioned-use property.
    (5) Basis adjustment.
    (c) Property used by a tax-exempt or governmental entity.
    (1) In general.
    (2) Interaction with section 6417.
    (d) Dual-use property.
    (1) Dual use property used for dispensing or storing qualified 
alternative fuel and conventional fuel.
    (2) Qualified alternative fuel storage.
    (3) Dual use property used to store or transmit electricity for 
charging a motor vehicle and for other purposes.
    (4) Example.
    (i) Facts.
    (ii) Analysis.
    (e) Applicability date.


Sec.  1.30C-1  Credit for alternative fuel vehicle refueling property; 
Definitions.

    (a) In general. The section 30C regulations (as defined in 
paragraph (b)(23) of this section) apply for purposes of determining 
the availability and amount of any credit that is allowed to a taxpayer 
by section 30C(a) of the Code (as defined in paragraph (b)(24)(ii) of 
this section) with respect to any 30C property (as defined in paragraph 
(b)(1) of this section) placed in service by the taxpayer during the 
taxable year. Paragraph (b) of this section provides definitions of 
terms for purposes of applying section 30C and the section 30C 
regulations. See Sec.  1.30C-2 for general rules for determining the 
amount of the allowed section 30C credit. See Sec.  1.30C-3 for rules 
relating to the increased section 30C credit amount for satisfying 
prevailing wage and apprenticeship requirements. See Sec.  1.30C-4 for 
special rules.
    (b) Definitions. The definitions in this section apply for purposes 
of section 30C and the section 30C regulations.
    (1) 30C property. 30C property is any applicable property described 
in paragraph (b)(1)(i) or (ii) of this section that also meets the 
requirements of paragraph (b)(1)(iii) of this section.
    (i) Applicable property. Applicable property is any property (other 
than real property and a building and its structural components) that 
is comprised of components that are functionally interdependent--
    (A) For the storage or dispensing of a qualified alternative fuel 
into the fuel tank of a motor vehicle propelled by such fuel, but only 
if the storage or dispensing of the fuel is located at the point where 
such fuel is delivered into the fuel tank of the motor vehicle 
(refueling property); or
    (B) For the recharging of motor vehicles propelled by electricity, 
but only if the property is located at the point where the motor 
vehicles are recharged (recharging property).
    (ii) Property integral to refueling property or recharging 
property. If applicable, the term applicable property also includes 
property the purpose of which is described in paragraph (b)(1)(i)(A) or 
(B) of this section that is an integral part of refueling property or 
recharging property.
    (iii) Other requirements. To be 30C property, any applicable 
property must also meet the following requirements--
    (A) The property is of a character subject to an allowance for 
depreciation, or installed on property that is used as the principal 
residence of the taxpayer (within the meaning of section 121 of the 
Code);
    (B) The original use of the property begins with the taxpayer; and
    (C) The property is placed in service (as defined in Sec.  1.30C-
2(b)(6)) in an eligible census tract as described in Sec.  1.30C-2(c).
    (2) 45Z transportation fuel. 45Z transportation fuel means any 
transportation fuel (as defined in section 45Z(d)(5) of the Code) 
produced after December 31, 2024.
    (3) Building and structural components. Building and structural 
components has the same meaning as in Sec.  1.48-1(e).
    (4) Census block. Census block means the smallest geographic area 
for which the Census Bureau collects and tabulates decennial census 
data.
    (5) Charger. Charger means a device with one or more charging ports 
and connectors for charging electric vehicles.
    (6) Charging port. Charging port means the system within a charger 
that charges one motor vehicle. A charging port may have multiple 
connectors, but it can provide power at the port's rated electrical 
output to charge only one motor vehicle through one connector at a 
time.
    (7) Clean burning fuel. Clean burning fuel means--
    (i) Any qualified alternative fuel; or
    (ii) Electricity.
    (8) Connector. Connector means the device that attaches an electric 
vehicle to a charging port to transfer electricity.
    (9) Conventional fuel. Conventional fuel means any fuel that is not 
a clean burning fuel. Conventional fuel includes diesel fuel that is 
not in a qualifying biodiesel mixture and gasoline.
    (10) Conventional refueling property. Conventional refueling 
property means property that is used to dispense or store only 
conventional fuel.
    (11) Electric vehicle. Electric vehicle means a motor vehicle that 
is either partially or fully powered by electric power received from an 
external power source.
    (12) Fuel dispenser. Fuel dispenser means, in the case of refueling 
property, the unit through which fuel is dispensed into the fuel tank 
of a motor vehicle, if such unit is capable of fueling at or above the 
dispenser's minimum rate of fueling and has at least one hose and 
nozzle, and optionally a meter, valve, controller, and enclosure.
    (13) Fuel tank. Fuel tank means, in the case of a motor vehicle 
propelled by qualified alternative fuel, the tank that supplies fuel to 
the propulsion engine of the motor vehicle or, in the case of a fuel 
cell electric vehicle, the tank that supplies fuel to the fuel cell of 
the motor vehicle.
    (14) Functionally interdependent. Components are functionally 
interdependent if the placing in service of each component is dependent 
upon the placing in service of each of the other components in order to 
refuel or recharge a motor vehicle.
    (15) Integral part. Property is an integral part of a refueling or 
recharging property if it is used directly in the intended function of 
the refueling

[[Page 76771]]

property or recharging property and is essential to the completeness of 
the intended function, meets all of the requirements for 30C property 
described in paragraph (b)(1)(iii) of this section, is owned by the 
taxpayer that owns the refueling property or recharging property, and 
is specifically designed to be integrated with the refueling property 
or recharging property with which it is associated.
    (16) Located at the point--(i) Refueling property. For purposes of 
determining whether property is considered refueling property, and 
therefore 30C property, located at the point means the point where fuel 
is delivered into the fuel tank of the motor vehicle. Property will be 
considered located at the point where fuel is delivered into the fuel 
tank of the motor vehicle if such property is located at the same or 
immediately adjacent physical address as such fuel delivery point.
    (ii) Recharging property. For purposes of determining whether 
property is considered recharging property, and therefore 30C property, 
located at the point means the point where the motor vehicles are 
recharged. Property will be considered located at the point where the 
motor vehicles are recharged if it is located at the same or 
immediately adjacent physical address as such recharging point. 
Property that is a component of a motor vehicle and is necessary for 
the propulsion of that vehicle is considered part of the vehicle rather 
than recharging property and is therefore not 30C property.
    (17) Motor vehicle--(i) In general. Motor vehicle means any vehicle 
that has at least 4 wheels and is manufactured primarily for use on 
public streets, roads, and highways (not including a vehicle operated 
exclusively on a rail or rails).
    (ii) 2- or 3-wheeled motor vehicle. For purposes of Sec.  1.30C-
2(c)(5), motor vehicle also includes any vehicle that has 2 or 3 
wheels, is manufactured primarily for use on public streets, roads, or 
highways (not including a vehicle operated exclusively on a rail or 
rails), and is propelled by electricity.
    (18) Original use. Original use has the same meaning as in Sec.  
1.48-2(b)(7).
    (19) Population census tract. Population census tract means the 
small-area geographic divisions of a county or statistically equivalent 
entity defined for the tabulation and presentation of data from the 
decennial census and selected other statistical programs, as defined by 
the U.S. Bureau of the Census (Census Bureau). Population census tracts 
are comprised of census blocks. The Census Bureau assigns to each 
population census tract a unique 11-digit census tract Geographic 
Identifier (GEOID). An 11-digit census tract GEOID is a GEOID (a 
numeric identifier associated with a geographic area) defined by the 
Census Bureau and comprised of a 2-digit State GEOID, 3-digit county 
GEOID, and 6-digit census tract GEOID. The 11-digit census tract GEOID 
provides a unique identifier for each population census tract in the 
United States, including tracts in the U.S. territories. The 11-digit 
census tract GEOIDs may vary for any individual latitude/longitude 
point based on different census tract boundary delineation dates over 
time.
    (20) Qualified alternative fuel. Qualified alternative fuel is a 
fuel meeting one of the following conditions--
    (i) At least 85 percent of its volume consists of one or more of 
the following: ethanol, natural gas, compressed natural gas, liquefied 
natural gas, liquefied petroleum gas, or hydrogen;
    (ii) It is a qualifying biodiesel mixture; or
    (iii) It is 45Z transportation fuel.
    (21) Qualifying biodiesel mixture. Qualifying biodiesel mixture 
means a mixture of biodiesel (as defined in section 40A(d)(1) of the 
Code) and diesel fuel (as defined in section 4083(a)(3) of the Code) if 
such mixture contains at least 20 percent biodiesel. For this purpose, 
any kerosene in a mixture--
    (i) Is disregarded in determining whether the mixture is a mixture 
of biodiesel and diesel fuel; and
    (ii) Is taken into account in determining whether the mixture 
contains at least 20 percent biodiesel.
    (22) Section 30C credit. The term section 30C credit means the 
credit allowed by section 30C(a) to a taxpayer to claim against the tax 
imposed by chapter 1 (as defined in paragraph (b)(24)(i) of this 
section) of an amount equal to a percentage of the cost of 30C property 
placed in service by the taxpayer during the taxable year, subject to 
limitations described in section 30C(b) and the section 30C 
regulations.
    (23) Section 30C regulations. The term section 30C regulations 
means this section and Sec. Sec.  1.30C-2 through 1.30C-4.
    (24) Statutory references--(i) Chapter 1. The term chapter 1 means 
chapter 1 of the Code.
    (ii) Code. The term Code means the Internal Revenue Code.
    (25) Storage property--(i) In general. Storage property means 
qualified alternative fuel storage property and electrical energy 
storage property.
    (ii) Qualified alternative fuel storage property. Qualified 
alternative fuel storage property means property used for the storage 
of qualified alternative fuel, but only if such storage property is 
located at the point where the motor vehicles are refueled. For 
example, in the case of hydrogen energy storage property, such property 
may include but is not limited to a hydrogen compressor and associated 
storage tank and an underground storage facility and associated 
compressors.
    (iii) Electrical energy storage property. Electrical energy storage 
property means property that receives, stores, and delivers energy for 
conversion to electricity, but only if such storage property is located 
at the point where the motor vehicles are recharged. For example, 
electrical energy storage property may include but is not limited to 
rechargeable electrochemical batteries of all types (such as lithium 
ion, vanadium flow, sodium sulfur, and lead-acid).
    (c) Applicability date. This section applies to property placed in 
service in taxable years ending after [date of publication of final 
regulations in the Federal Register].


Sec.  1.30C-2  General rules.

    (a) Amount of credit--(1) In general. Section 30C(a) of the Code 
allows a taxpayer to claim as a credit against the tax imposed by 
chapter 1 an amount equal to a percentage of the cost of 30C property 
placed in service by the taxpayer during the taxable year, subject to 
certain dollar-amount limitations described in section 30C(b) and 
paragraph (a)(4) of this section.
    (2) Applicable percentages--(i) Property of a character subject to 
an allowance for depreciation. In the case of property of a character 
subject to an allowance for depreciation, the section 30C credit is an 
amount equal to 6 percent of the cost of any 30C property placed in 
service by the taxpayer during the taxable year. For 30C property 
placed in service by certain tax-exempt organizations and governmental 
units described in section 50(b)(3) and (4) of the Code, see sections 
30C(e)(2) and 6417(d)(2) of the Code and Sec.  1.6417-2(c).
    (ii) Projects meeting the prevailing wage and apprenticeship (PWA) 
requirements. In the case of any 30C project (as described in Sec.  
1.30C-3(b)(2)) that satisfies the prevailing wage and registered 
apprenticeship requirements of section 30C(g) and Sec.  1.30C-3 (PWA 
requirements), the section 30C credit for the cost of any 30C property 
in such project placed in service by the taxpayer during the taxable 
year is multiplied by 5.

[[Page 76772]]

    (iii) Property not subject to an allowance for depreciation. In the 
case of property of a character not subject to an allowance for 
depreciation, the section 30C credit is an amount equal to 30 percent 
of the cost of any 30C property placed in service by the taxpayer 
during the taxable year provided that such property is installed on 
property that is used as the taxpayer's principal residence (within the 
meaning of section 121 of the Code).
    (3) Apportionment of section 30C credit between business and 
personal use. In the case of depreciable 30C property installed at the 
taxpayer's principal residence, the business use of which is more than 
50 percent of a taxpayer's total use of the property for the taxable 
year in which the property is placed in service, the taxpayer's section 
30C credit for that taxable year with respect to that 30C property is 
treated as a general business credit under section 30C(d)(1) and 
paragraph (a)(2)(i) of this section (and not allowed under section 
30C(a) or paragraph (a)(2)(iii) of this section). If the business use 
of such 30C property is 50 percent or less of a taxpayer's total use of 
the property for the taxable year in which the property is placed in 
service (apportioned-use property), the taxpayer's section 30C credit 
for that taxable year with respect to that property must be apportioned 
as provided in paragraphs (a)(3)(i) and (ii) of this section:
    (i) Business use portion. The portion of the section 30C credit 
corresponding to the percentage of the taxpayer's business use of the 
30C property is treated as a general business credit under section 
30C(d)(1) and paragraph (a)(2)(i) of this section (and not allowed 
under section 30C(a) or paragraph (a)(2)(iii) of this section).
    (ii) Personal use portion. The portion of the section 30C credit 
corresponding to the percentage of the taxpayer's personal use of the 
30C property is treated as a section 30C credit allowed under section 
30C(a) pursuant to section 30C(d)(2) and paragraph (a)(2)(iii) of this 
section.
    (4) Dollar-amount limitations--(i) In general. The section 30C 
credit allowed with respect to any single item of 30C property placed 
in service by the taxpayer during the taxable year cannot exceed--
    (A) $100,000 in the case of any such item of property of a 
character subject to an allowance for depreciation; and
    (B) $1,000 in any other case.
    (ii) Apportioned-use property. In the case of apportioned-use 
property described in paragraph (a)(3) of this section, the dollar-
amount limitation must be apportioned in the same manner as the 
taxpayer's section 30C credit. For example, in the case of 30C property 
the business use of which is 40 percent of a taxpayer's total use of 
the property for the taxable year in which the property is placed in 
service: the portion treated as a general business credit under section 
30C(d)(1) cannot exceed $40,000 ($100,000 multiplied by 40 percent), 
and the portion treated as a section 30C credit allowed under section 
30C(a) cannot exceed $600 ($1,000 multiplied by 60 percent).
    (b) 30C property rules--(1) Single item of 30C property. A taxpayer 
may claim the section 30C credit with respect to 30C property if the 
taxpayer places in service at least one single item of 30C property as 
described in paragraph (b)(6) of this section, any other components 
associated with the item that are functionally interdependent, and, if 
applicable, any integral part property associated with the item. For 
purposes of calculating the section 30C credit, a single item of 30C 
property is--
    (i) Each charging port for recharging property;
    (ii) Each fuel dispenser for refueling property; or
    (iii) Each storage property (for this purpose, a storage system 
comprised of multiple storage tanks, such as a cascade system, is 
treated as a single storage property).
    (2) Associated property. If functionally interdependent property 
and, if applicable, integral part property that is a part of the 30C 
property is placed in service by a taxpayer in a taxable year and is 
associated with one or more single items of 30C property (associated 
property), then such associated property must be allocated as follows:
    (i) If associated property is directly attributable and traceable 
to a single item of 30C property, then the cost of such associated 
property is allocated to such single item of 30C property.
    (ii) If associated property is directly attributable and traceable 
to more than one single item of 30C property, then the cost of such 
associated property is allocated to such single item of 30C property 
based on the cost of each single item of 30C property. The total cost 
of such associated property divided among the 30C properties cannot 
exceed 100 percent of the cost of such associated property.
    (3) Calculating the section 30C credit. The section 30C credit for 
each single item of 30C property is the lesser of the tentative section 
30C credit for that single item or the dollar-amount limitations in 
paragraph (a)(4) of this section for that single item. The tentative 
section 30C credit for each single item of 30C property equals:
    (i) The applicable percentage; multiplied by
    (ii) The sum of--
    (A) The cost of the single item of 30C property;
    (B) The cost of associated property that is directly attributable 
and traceable to the single item of 30C property (as described in 
paragraph (b)(2)(i) of this section); and
    (C) The cost of the ratable share of associated property (as 
described in paragraph (b)(2)(ii) of this section).
    (4) Special rule for bidirectional charging equipment. Property 
will not fail to be treated as 30C property solely because such 
property is capable of charging the battery of a motor vehicle 
propelled by electricity and allows discharging electricity from such 
battery to an electric load external to such motor vehicle.
    (5) Property for the refueling of certain two- and three-wheeled 
motor vehicles. 30C property also includes property of a character 
subject to an allowance for depreciation that is for the recharging of 
a motor vehicle described in Sec.  1.30C-1(b)(17)(ii).
    (6) Placed in service--(i) Depreciable property. 30C property that 
is depreciable property is considered placed in service in the earlier 
of the following taxable years:
    (A) The taxable year in which, under the taxpayer's depreciation 
practice, the period for depreciation with respect to such property 
begins; or
    (B) The taxable year in which such property is placed in a 
condition or state of readiness and availability for a specifically 
assigned function, whether in a trade or business or in the production 
of income.
    (ii) Non-depreciable property. 30C property that is non-depreciable 
property is considered placed in service when it is installed at the 
principal residence of the taxpayer and is operational.
    (c) Eligible census tracts--(1) Geographic requirement. To qualify 
for the section 30C credit, 30C property must be placed in service in 
an eligible census tract. Eligible census tracts include any population 
census tract that qualifies as a low-income community census tract or 
that is a non-urban census tract.
    (2) Low-income community census tract--(i) In general. A population 
census tract is an eligible low-income community census tract for 
purposes of the section 30C credit if the population census tract meets 
the requirements of section 45D(e)(1) of the Code (relating to the new 
markets tax credit), which

[[Page 76773]]

requires that the poverty rate for such tract is at least 20 percent, 
or in the case of a tract not located within a metropolitan area, the 
median family income for such tract does not exceed 80 percent of 
statewide median family income, or in the case of a tract located 
within a metropolitan area, the median family income for such tract 
does not exceed 80 percent of the greater of statewide median family 
income or the metropolitan area median family income.
    (ii) Modification for high migration rural counties. In the case of 
a census tract located within a high migration rural county, as defined 
under section 45D(e)(5) of the Code, such census tract is a low-income 
community if the median family income for such tract does not exceed 85 
percent of statewide median family income.
    (3) Non-urban census tract. For purposes of the section 30C credit, 
a non-urban census tract is any population census tract in which at 
least 10 percent of the census blocks are not designated as urban areas 
by the Census Bureau.
    (4) Determination of eligibility of specific census tracts. The 
Internal Revenue Service (IRS) will periodically publish lists of 
specific census tracts that meet the criteria in paragraph (c)(1) of 
this section along with instructions on how taxpayers may determine 
their census tract identifying numbers in the Federal Register or 
Internal Revenue Bulletin (see Sec.  601.601 of this chapter).
    (d) Reduction in basis. The basis of any property for which a 
credit is allowable under section 30C(a) must be reduced by the amount 
of the credit so allowed (determined without regard to section 30C(d)).
    (e) Examples. The following examples illustrate the rules of this 
section.
    (1) Example 1--(i) Facts. A installs a free-standing garage at A's 
principal residence, which costs $25,000. A installs electric vehicle 
supply equipment (EVSE), which costs $1,500 and consists of an AC Level 
2 charger, charging port, and connector. A also installs a wall mount 
to support the charging port, which costs $500. The wall mount is 
specifically designed to be integrated with the EVSE. Finally, A adds a 
new electric panel and installs conduit/wiring, which together costs 
$1,000, to connect the charging port to the electrical service line. 
The new electric panel and conduit/wiring are used exclusively to 
service the charging port and are required to make the charging port 
operational. All property is owned by A and is not subject to an 
allowance for depreciation. All costs include labor costs. The property 
is placed in service at the time it is installed. A's principal 
residence is located in an eligible census tract as described in 
paragraph (c) of this section.
    (ii) Analysis--(A) 30C property. The charger, charging port, 
connector, wall mount, electric panel, and conduit/wiring are 30C 
property under Sec.  1.30C-1(b)(1). The charger, connector, and 
conduit/wiring are functionally interdependent with the charging port 
(and all of these properties together constitute recharging property 
under Sec.  1.30C-1(b)(1)(i)(B)). The electric panel and wall mount are 
an integral part of the recharging property under Sec.  1.30C-
1(b)(1)(ii) and (b)(15). The charger, charging port, connector, wall 
mount, electrical panel, and conduit/wiring meet the other requirements 
of Sec.  1.30C-1(b)(1)(iii) because the property is installed at A's 
principal residence, the original use of the property begins with A, 
and the property is placed in service (as defined in paragraph (b)(6) 
of this section) in an eligible census tract as described in paragraph 
(c) of this section. The garage is not 30C property because any 
building or its structural components are excluded from the definition 
of 30C property under Sec.  1.30C-1(b)(1)(i), and therefore cannot 
qualify as functionally interdependent with the charging port nor as an 
integral part of the recharging property.
    (B) Calculation of the credit. Under paragraph (b)(1)(i) of this 
section, the charging port is the item of 30C property for purposes of 
calculating the credit. Further, under paragraph (b)(2) of this 
section, the charger (excluding the charging port), connector, wall 
mount, electrical panel, and conduit/wiring are all directly 
attributable and traceable associated property with respect to the 
charging port. Under paragraph (b)(3) of this section, the tentative 
section 30C credit is the sum of the cost of a single item of 30C 
property (charging port) and the cost of directly attributable and 
traceable associated property, multiplied by the applicable percentage 
(30%). Here, the cost of the charging port is included in the cost of 
the EVSE (with the charger and connector), and because the charger 
includes only a single port, the entire $1,500 is taken into account as 
either the item of 30C property or as directly attributable and 
traceable associated property. Thus, the tentative section 30C credit 
under paragraph (b)(3) of this section is $3,000 ($1,500 for the 
charger + $500 for the wall mount + $1,000 for the panel and wiring) 
multiplied by the applicable percentage (30%), which equals $900. 
Because $900 is less than the $1,000 limit in paragraph (a)(4)(i)(B) of 
this section, the final section 30C credit is also $900.
    (2) Example 2--(i) Facts. The facts are the same as paragraph 
(e)(1) of this section (Example 1), except that the total cost of all 
directly attributable and traceable associated property other than the 
charger (excluding the charging port) is $3,500.
    (ii) Analysis. Under paragraph (b)(3) of this section, the 
tentative section 30C credit is the sum of the cost of a single item of 
30C property (charging port) and the cost of directly attributable and 
traceable associated property, multiplied by the applicable percentage 
(30%). As in paragraph (e)(1) of this section (Example 1), the cost of 
the charging port is included in the cost of the EVSE (with the charger 
and connector), and because the charger includes only a single port, 
the entire $1,500 is taken into account as either the item of 30C 
property or as directly attributable and traceable associated property. 
Thus, the tentative section 30C credit under paragraph (b)(3) of this 
section is $5,000 ($1,500 for the charger + $3,500 for all directly 
attributable and traceable associated property) multiplied by the 
applicable percentage (30%), which equals $1,500. Because $1,500 is 
greater than the $1,000 limit in paragraph (a)(4)(i)(B) of this 
section, the final section 30C credit is $1,000.
    (3) Example 3--(i) Facts. The facts are the same as paragraph 
(e)(2) of this section (Example 2), except that A operates a delivery 
service and installs the EVSE at her personal residence that she uses 
to charge both her personal vehicle and her delivery vehicle. Her 
business use of the EVSE is 40%. The PWA requirements are not 
satisfied.
    (ii) Analysis. (A) As in paragraph (e)(2) of this section (Example 
2), the cost of the charging port is included in the cost of the EVSE 
(with the charger and connector), and because the charger includes only 
a single port, the entire $1,500 is taken into account as either the 
item of 30C property or as directly attributable and traceable 
associated property. Under paragraph (a)(3) of this section, the 30C 
property is apportioned-use property. As a result, under paragraph 
(a)(4)(ii) of this section, the dollar-amount limitation must be 
apportioned in the same manner as the taxpayer's section 30C credit.
    (B) Under paragraph (b)(3) of this section, the tentative section 
30C credit for the personal use portion of the 30C property is the sum 
of the cost of a single item of 30C property (charging port) and the 
cost of directly attributable and traceable associated property, 
multiplied by the personal use portion (60%), and then multiplied by 
the

[[Page 76774]]

applicable percentage (30%). The tentative section 30C credit under 
paragraph (b)(3) of this section is $5,000 ($1,500 for the charger + 
$3,500 for all directly attributable and traceable associated property) 
multiplied by the personal use portion (60%), and then multiplied by 
the applicable percentage (30%), which equals $900. Because $900 is 
greater than the $600 limit in paragraph (a)(4)(ii) of this section 
($1,000 x 60%), the final section 30C credit for the personal use 
portion is $600.
    (C) Under paragraph (b)(3) of this section, the tentative section 
30C credit for the business use portion of the 30C property is the sum 
of the cost of a single item of 30C property (charging port) and the 
cost of directly attributable and traceable associated property, 
multiplied by the business-use portion (40%), and then multiplied by 
the applicable percentage (6%). The tentative section 30C credit under 
paragraph (b)(3) of this section is $5,000 ($1,500 for the charger + 
$3,500 for all directly attributable and traceable associated property) 
multiplied by the business-use portion (40%), and then multiplied by 
the applicable percentage (6%), which equals $120. Because $120 is less 
than the $40,000 limit in paragraph (a)(4)(ii) of this section 
($100,000 x 40%), the final section 30C credit for the business-use 
portion is $120.
    (4) Example 4--(i) Facts. B is a business entity that owns a fleet 
of medium-duty electric delivery vans. To recharge its electric 
delivery vans, B installs several properties at the same physical 
address in the same taxable year. First, B installs 20 direct current 
fast chargers (DCFCs), that have 2 charging ports each for a total of 
40 charging ports. Each DCFC costs $30,000. B also installs a pedestal 
to support each DCFC, which cost $1,000 each. B additionally installs 
an electric panel and conduit/wiring, which together cost $50,000, to 
connect the DCFCs to the electrical service line. Finally, B installs a 
smart charge management system for $25,000, which is used to control 
the amount of power dispensed by the DCFCs to meet B's charging needs 
and prevent equipment overloads. The electric panel and conduit/wiring 
are used exclusively to service the DCFCs and are necessary to install 
to make each charging port operational. All property is owned by B. All 
costs include labor costs. Each of the above properties is property of 
a character subject to depreciation and is placed in service at the 
time it is installed. The physical address where B installs these 
properties is located in an eligible census tract as described in 
paragraph (c) of this section.
    (ii) Analysis--(A) 30C property. The DCFCs, pedestals, electric 
panel, conduit/wiring, and the smart charge management system all 
constitute 30C property under Sec.  1.30C-1(b)(1). Each DCFC and each 
pedestal is functionally interdependent with the respective charging 
ports with which they are associated and the conduit/wiring property is 
functionally interdependent with the entire class of charging ports 
(and these properties together constitute recharging property under 
Sec.  1.30C-1(b)(1)(i)(B)) and the electric panel and the smart charge 
management system constitute integral parts of the entire class of 
charging ports under Sec.  1.30C-1(b)(1)(ii) and (b)(15). The DCFCs, 
pedestals, the electrical panel, conduit/wiring, and the smart charge 
management system all meet the other requirements of Sec.  1.30C-
1(b)(1)(iii) because the properties are each subject to an allowance 
for depreciation, the original use of the properties begins with B, and 
the properties are placed in service (as described in paragraph (b)(6) 
of this section) in an eligible census tract as described in paragraph 
(c) of this section.
    (B) Calculation of the credit. (1) Under paragraph (b)(1)(i) of 
this section, each charging port constitutes a separate item of 30C 
property for purposes of calculating the credit. Additionally, under 
paragraph (b)(2)(i) of this section, each charger (excluding its 
respective ports) and each pedestal, electrical panel, and the conduit/
wiring are all associated property that is directly attributable to and 
traceable with respect to their respective charging ports. Further, the 
electric panel, the conduit/wiring, and the smart charge management 
system are associated property directly attributable and traceable to 
more than one single item of 30C property, as described in paragraph 
(b)(2)(ii) of this section, because they are not directly attributable 
and traceable to any single charging port.
    (2) Under paragraph (b)(3) of this section, B's tentative section 
30C credit for each single item of 30C property (each charging port) is 
the sum of the cost of that single item of 30C property (each charging 
port), the cost of directly attributable and traceable associated 
property, and the ratable share of the cost of other associated 
property multiplied by the applicable percentage as described in 
paragraph (a)(2) of this section (6% or 30%, depending on whether the 
PWA requirements are satisfied).
    (3) Because each DCFC charger costs $30,000 and each has 2 charging 
ports, the cost of each port is $15,000 ($30,000 / 2). Additionally, 
because each pedestal supports a charger with 2 ports and costs $1,000, 
the cost attributable to each port is $500 ($1,000 / 2). The costs of 
the electric panel and the conduit/wiring are allocated ratably based 
on the cost per charging port ($50,000 / 40 = $1,250). Similarly, the 
cost of the smart charge management system is also allocated ratably 
based on the cost per charging port ($25,000 / 40 = $625).
    (4) B should therefore calculate a separate section 30C credit for 
each single item of 30C property (that is, each of the 40 charging 
ports) by adding the cost of the charging port ($15,000) to the cost 
($500) of directly attributable and traceable associated property 
(respective pedestal) and to the ratable shares ($1250 + $625) of the 
two functionally interdependent and integral part properties (panel, 
including its conduit/wiring, and the smart charge management system). 
The sum of these costs is $17,375 for each charging port.
    (5) If B does not meet the PWA requirements, B's tentative section 
30C credit for each charging port is $17,375 multiplied by the 
applicable percentage (6% under paragraph (b)(3)(i) of this section), 
which equals $1,042.50. Because $1,042.50 is less than the $100,000 
credit limit for depreciable property under paragraph (a)(4)(i)(A) of 
this section, the final section 30C credit for each charging port is 
also $1,042.50. B's total section 30C credit is $41,700, the sum of the 
section 30C credit for each charging port that B placed in service 
($1,042.50 x 40) in the taxable year.
    (6) If B meets the PWA requirements, B's tentative section 30C 
credit for each charging port is $17,375 multiplied by the increased 
applicable percentage (30%) under paragraph (b)(3)(i) of this section, 
which equals $5,212.50. Because $5,212.50 is less than the $100,000 
credit limit for depreciable property under paragraph (a)(4)(i)(A) of 
this section, the final section 30C credit for each charging port is 
also $5,212.50. B's total section 30C credit is $208,500, the sum of 
the section 30C credit for each charging port that B placed in service 
($5,212.50 x 40) during the taxable year. The fact that this total 
credit exceeds the $100,000 limit is not relevant because section 
30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the 
$100,000 limit applies on a per-item basis and not as an aggregate 
limit.
    (5) Example 5--(i) Facts. The facts are the same as paragraph 
(e)(4) of this section (Example 4), except that B

[[Page 76775]]

places in service the electric panel, conduit/wiring, smart charge 
management system, and 10 DCFCs in Year 1. In Year 2, B then installs 
and places in service the other 10 DCFCs.
    (ii) Analysis--(A) 30C property. Under paragraph (a) of this 
section, the amount of the credit, generally, is determined based on a 
percentage of the cost of 30C property placed in service, as defined 
under paragraph (b)(6) of this section, by a taxpayer during a taxable 
year. In this example, B has placed in service 10 DCFCs, and certain 
integral part property and property that is functionally interdependent 
to all 20 DCFCs in one tax year, while placing in service 10 more DCFCs 
in a different tax year. B will, therefore, include the electric panel, 
conduit/wiring, smart charge management system, and 10 pedestals and 20 
ports (that is, the 10 DCFCs placed in service in year 1) in 
calculating the Year 1 section 30C credit. In Year 2, B will only 
include in calculating B's total section 30C credit, the 10 pedestals 
and 20 ports installed in year 2.
    (B) Calculation of the credit. (1) For year 1 the cost of each DCFC 
charger is still $30,000 and the cost of each port is still $15,000. 
Additionally, the cost for the pedestals attributable to each port is 
still $500. The costs of the electric panel and the conduit/wiring are 
allocated ratably based on the cost per charging port placed in service 
in the same taxable year ($50,000 / 20 = $2,500). Similarly, the cost 
of the smart charge management system is also allocated ratably based 
on the cost per charging port placed in service in the same taxable 
year ($25,000 / 20 = $1,250). The cost for each single item in Year 1 
includes the cost of each port ($15,000), the ratable share of the cost 
of the pedestal ($500), the ratable share of the cost of the electric 
panel and conduit/wiring ($2,500) and the ratable share of the cost of 
the smart charge management system ($1,250). The sum of these costs for 
a single item of 30C property in year 1 is $19,250. If B did not meet 
the PWA requirements, B's tentative section 30C credit for each 
charging port is $19,250 multiplied by the 6% applicable rate, which 
equals $1,155 per single item of 30C property for Year 1. In total, B's 
section 30C credit for Year 1 would be $ 23,100 ($1,155 x 20). If B 
does meet the PWA requirements, B's tentative section 30C credit for 
each port is $5,775, which is the $19,250 cost per single item 
multiplied by the 30% applicable rate. In total, if B meets the PWA 
requirements, B's section 30C credit for Year 1 would be $115,500 
($5,775 x 20). The fact that this total credit exceeds the $100,000 
limit is not relevant because section 30C(b)(1) and paragraph 
(a)(4)(i)(A) of this section provide that the $100,000 limit applies on 
a per-item basis and not as an aggregate limit.
    (2) For Year 2, the cost of each port would still be $15,000 and 
the cost for the pedestals attributable to each port is still $500. The 
integral part property was already placed in service in Year 1, and 
therefore, the cost associated with that property is not allocated to 
the Year 2 property. Therefore, in Year 2, if B does not meet the PWA 
requirements, B's section 30C credit for each single item is $930 
($15,500 x 6%), and the amount of B's total Year 2 section 30C credit 
is $18,600 ($930 x 20). If B meets the PWA requirements, B's section 
30C credit for each single item is $4,650 ($15,500 x 30%), and B's 
total Year 2 section 30C credit is $93,000 ($4,650 x 20).
    (6) Example 6--(i) Facts. The facts are the same as paragraph 
(e)(4) of this section (Example 4), except that B begins construction 
and incurs $100,000 of costs related to the installation of the 
chargers in Year 1, but no property is placed in service until Year 2.
    (ii) Analysis. There is no section 30C credit for Year 1 because no 
30C property has been placed in service. The 30C property is placed in 
service in Year 2. In Year 2, the section 30C credit is the same as the 
Year 1 credit in paragraph (e)(4) of this section (Example 4).
    (7) Example 7--(i) Facts. The facts are the same as paragraph 
(e)(4) of this section (Example 4), except that instead of installing 
20 DCFCs, B installs 10 DCFCs, with 2 charging ports each, and 10 AC 
Level 2 chargers (AC chargers), also with 2 charging ports each. Each 
AC Level 2 charger costs $10,000. Each DCFC charger still costs 
$30,000. B also installs a pedestal to support each AC charger, which 
costs $1,000 each.
    (ii) Analysis--(A) 30C property. The analysis for the DCFCs 
pedestals, electric panel, conduit/wiring, and smart charge management 
system is the same as in Example 4 of this paragraph (e). Additionally, 
the AC chargers also constitute 30C property under Sec.  1.30C-1(b)(1). 
Each AC charger and each pedestal is functionally interdependent with 
the respective charging ports with which they are associated (and these 
properties together constitute recharging property under Sec.  1.30C-
1(b)(1)(i)(B)) and the electric panel, the conduit/wiring property, and 
the smart charge management system constitute integral parts of all of 
the DCFC ports and AC charger charging ports under Sec.  1.30C-
1(b)(1)(ii) and (b)(15). The AC chargers also meet the other 
requirements of Sec.  1.30C-1(b)(1)(iii) because they are subject to an 
allowance for depreciation, the original use of the properties begins 
with B, and are placed in service (as defined in paragraph (b)(6) of 
this section) in an eligible census tract as described in paragraph (c) 
of this section.
    (B) Calculation of the credit. (1) Under paragraph (b)(1)(i) of 
this section, each of the 20 DCFC charging ports and each of the 20 AC 
charger charging ports constitutes a separate item of 30C property for 
purposes of calculating the credit. Additionally, under paragraph 
(b)(2)(i) of this section, each charger (excluding its respective 
ports) and each pedestal, electrical panel, and the conduit/wiring are 
all associated property that is directly attributable to and traceable 
associated property with respect to their respective charging ports. 
Further, the electric panel, the conduit/wiring, and the smart charge 
management system are associated property directly attributable and 
traceable to more than one single item of 30C property, as described in 
paragraph (b)(2)(ii) of this section, because they are not directly 
attributable and traceable to any single charging port.
    (2) Under paragraph (b)(3) of this section, B's tentative section 
30C credit for each single item of 30C property (each charging port) is 
the sum of the cost of that single item of 30C property (each charging 
port), the cost of directly attributable and traceable associated 
property, and the ratable share of the cost of other associated 
property multiplied by the applicable percentage as described in 
paragraph (a)(2) of this section (6% or 30%, depending on whether the 
PWA requirements are satisfied).
    (3) B should therefore calculate a separate section 30C credit for 
each single item of 30C property (that is, each of the 20 DCFC charging 
ports and each of the 20 AC charger charging ports). Because each of 
the 10 DCFCs costs $30,000 and each has 2 charging ports, the cost of 
each DCFC port is $15,000 ($30,000 / 2). Similarly, because each of the 
10 AC chargers costs $10,000 and each has 2 charging ports, the cost of 
each AC charger charging port is $5,000 ($10,000 / 2). To calculate the 
credit, B should add the cost of the charging port ($15,000 for the 
DCFC ports and $5,000 for the AC charger charging ports) to the 
allocable costs of the associated properties. Because each pedestal 
costs $1,000 and supports a single charger that has 2 ports, the cost 
attributable to each port (both the DCFC and AC charger charging ports) 
is $500 ($1,000 / 2). With respect to the properties

[[Page 76776]]

whose costs are not directly attributable and traceable to any single 
port, B must allocate their costs according to each port's ratable 
share of B's total cost for the 40 ports. Because the 20 DCFC ports 
cost a total of $300,000 (20 x $15,000) and the 20 AC charger charging 
ports cost only $100,000 in total (20 x $5,000), B should allocate 75% 
of these costs to the 20 DCFC ports and 25% of these costs to the AC 
charger charging ports. Therefore, $1,875 (($50,000 x 75%) / 20) of the 
cost of the electric panel and conduit/wiring is attributable to each 
of the 20 DCFC charging ports, and $625 (($50,000 x 25%) / 20) is 
attributable to each of the 20 AC charger ports. Similarly, the cost of 
the smart charge management system is allocated in the same ratio, with 
$937.50 (($25,000) x 75%) / 20) allocated to each DCFC port, and 
$312.50 (($25,000 x 25%) / 20) to each AC charger charging port.
    (4) Accordingly, If B does not meet the PWA requirements, B's 
tentative section 30C credit for each DCFC port is $18,312.50 ($15,000 
+ $500 + $1875 + $937.50) multiplied by the 6% applicable rate, which 
equals $1,098.75, and the section 30C credit for each AC charger 
charging port is $6,437.50 ($5,000 + $500 + $625 + $312.50) multiplied 
by the 6% applicable rate, which equals $386.25. Because both $1,098.75 
and $386.25 are less than the $100,000 credit limit for depreciable 
property under paragraph (a)(4)(i)(A) of this section, the final 
section 30C credit for each DCFC port is also $1,098.75, and the final 
section 30C credit for each AC charger charging port is also $386.25. 
B's total section 30C credit is $29,700 ($21,975 + $7,725), the sum of 
the section 30C credit for each charging port that B placed in service 
($1,098.75 x 20) + ($386.25 x 20) in the taxable year.
    (5) If B meets the PWA requirements, B's tentative section 30C 
credit for each DCFC port is $18,312.50 multiplied by the increased 
applicable percentage (30%) under paragraph (b)(3)(i) of this section, 
which equals $5,493.75, and its tentative section 30C credit for each 
AC charger charging port is $6,437.50 multiplied by 30%, or $1,931.25. 
Because both $5,493.75 and $1,931.25 are less than the $100,000 credit 
limit for depreciable property under paragraph (a)(4)(i)(A) of this 
section, the final section 30C credit for each DCFC port is also 
$5,493.75 and the final section 30C credit for each AC charger charging 
port is also $1,931.25. B's total section 30C credit is $148,500, the 
sum of the section 30C credit for the 20 DCFC ports that B placed in 
service ($5,493.75 x 20 = $109,875) plus the sum of the section 30C 
credit for the 20 AC charger charging ports that B placed in service 
($1,931.25 x 20 = $38,625) during the taxable year. The fact that this 
total credit exceeds the $100,000 limit is not relevant because section 
30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the 
$100,000 limit applies on a per-item basis and not as an aggregate 
limit.
    (8) Example 8--(i) Facts. The facts are the same as paragraph 
(e)(4) of this section (Example 4), except that B spends $100,000 
improving the land (for example, grading the land, installing a 
drainage system, and installing a paved surface). B also spends $15,000 
on fees related to permitting improvements to the land. Finally, B 
spends $5,000 on ``EV parking only'' signs and striping on the pavement 
needed for the EV to access the charger.
    (ii) Analysis. The costs for improving the land, associated 
permitting fees, and signs and striping are not 30C property because 
such costs are not functionally interdependent with the chargers or an 
integral part of the chargers. See Sec.  1.30C-1(b)(14) and (15). 
Therefore, the costs that B incurred to improve the land, to add the 
signage, and to stripe the pavement would not change the amount of the 
section 30C credit that B may claim.
    (9) Example 9--(i) Facts. The facts are the same as paragraph 
(e)(4) of this section (Example 4), except that B also installs and 
places in service a battery energy storage system as a backup source of 
electricity during power outages and to moderate electricity pricing. 
The battery energy storage system receives, stores, and delivers energy 
for conversion to electricity, and is located on the same or 
immediately adjacent physical address as the chargers and charging 
ports. The battery storage system is only used to support the chargers 
and does not provide electricity for any other purpose. The battery 
energy storage system costs $20,000.
    (ii) Analysis--(A) 30C property. The battery energy storage system 
constitutes 30C property under Sec.  1.30C-1(b)(1)(i)(B) because it is 
for the recharging of motor vehicles, (specifically, it is an 
electrical energy storage property described in Sec.  1.30C-
1(25)(iii)), and it is located at the point where motor vehicles are 
recharged under Sec.  1.30C-1(b)(16)(ii) because its located on the 
same or immediately adjacent physical address as B's chargers.
    (B) Calculation of the credit. (1) The battery energy storage 
system is a single item of 30C property under paragraph (b)(1)(iii) of 
this section, and it constitutes a separate single item of 30C property 
from B's charging ports and the properties associated with the charging 
ports. Therefore, B should calculate the section 30C credit for the 
battery storage system separately from its credit arising from its 
costs for these other properties. B also should not allocate the cost 
of the battery energy storge system among the charging ports.
    (2) Accordingly, if B does not meet the PWA requirements, B's 
tentative section 30C credit for the battery energy storage system is 
$1,200 ($20,000 x 6%). Because this $1,200 amount is less than the 
$100,000 credit limit for depreciable property under paragraph 
(a)(4)(i)(A) of this section, the final section 30C credit for the 
battery energy storage system is also $1,200. If B meets the PWA 
requirements, B's tentative section 30C credit for the battery energy 
storage system is $6,000 ($20,000 x 30%). Because this $6,000 amount is 
less than the $100,000 credit limit for depreciable property under 
paragraph (a)(4)(i)(A) of this section, the final section 30C credit 
for the battery energy storage system is also $6,000. It would not be 
relevant if B claimed $100,000 or more in section 30C credits for other 
items of 30C property because section 30C(b)(1) and paragraph 
(a)(4)(i)(A) of this section provide that the $100,000 limit applies on 
a per-item basis and not as an aggregate limit.
    (3) If B claims a section 30C credit for the battery energy storage 
system, this would render such storage property to be primarily used in 
the transportation of goods or individuals and not for the production 
of electricity. As a result, the property would not satisfy the 
requirements under section 48 or 48E.
    (10) Example 10--(i) Facts. The facts are the same as paragraph 
(e)(4) of this section (Example 4), except that B participates in a 
local electric company incentive program. The electric company installs 
the electric panel, conduit/wiring, and load management system, for 
which the electric company retains ownership.
    (ii) Analysis--(A) 30C property. The DCFCs, pedestals, electric 
panel, conduit/wiring, and the smart charge management system all 
constitute 30C property, as explained in the analysis under paragraph 
(e)(4) of this section (Example 4). However, B does not own the 
electric panel, conduit/wiring, and load management system, and, as a 
result, may not include the cost of that property in calculating B's 
section 30C credit. B would only calculate the credit based on the 30C 
property the taxpayer owns, which is the DCFCs and pedestals. The 
electric company that owns the electric panel, conduit/wiring, and load 
management system cannot

[[Page 76777]]

claim a section 30C credit for such property because it does not own 
the charging ports and therefore does not own a single item of 30C 
property, which is necessary to claim a section 30C credit. See 
paragraph (b)(1) of this section.
    (B) Calculation of the credit. (1) Under paragraph (b)(3) of this 
section, B's tentative section 30C credit for each single item of 30C 
property (each charging port) is the sum of the cost of that single 
item of 30C property (each charging port), the cost of directly 
attributable and traceable associated property, and the ratable share 
of the cost of other associated property multiplied by the applicable 
percentage as described in paragraph (a)(2) of this section (6% or 30%, 
depending on whether the PWA requirements are satisfied).
    (2) To calculate the credit for each single item of 30C property 
(each of the 40 charging ports) B would add the cost of each charging 
port ($15,000 ($30,000 / 2)) to the cost ($500 ($1,000 / 2)) of 
directly attributable and traceable associated property (that is, the 
respective pedestal). The sum of these costs is $15,500 for each 
charging port. If B does not meet the PWA requirements, B's tentative 
section 30C credit for each charging port is $15,500 multiplied by the 
applicable percentage (6% under paragraph (b)(3)(i)) of this section), 
which equals $930 per single item. Because this $930 amount is less 
than the $100,000 credit limit for depreciable property under paragraph 
(a)(4)(i)(A) of this section, the final section 30C credit for each 
charging port is $930. The total section 30C credit for B, if B does 
not meet the PWA requirements is $37,200 ($930 x 40).
    (3) If B meets the PWA requirements, B's tentative section 30C 
credit for each charging port is $15,500 multiplied by the increased 
applicable percentage (30%), which equals $4,650 per single item. B's 
total section 30C credit, in this example, is $186,000 ($4,650 x 40). 
The fact that this total credit exceeds the $100,000 limit is not 
relevant because section 30C(b)(1) and paragraph (a)(4)(i)(A) of this 
section provide that the $100,000 limit applies on a per-item basis and 
not as an aggregate limit.
    (11) Example 11--(i) Facts. The facts are the same as paragraph 
(e)(4) of this section (Example 4), except that B engages with a local 
utility company providing charging services that installs the 30C 
property described in paragraph (e)(4) (Example 4) at the same physical 
address in the same taxable year at the utility company's expense, for 
which the utility company retains ownership.
    (ii) Analysis. As the owner of the 30C property, the local utility 
company, and not B, would be eligible for a section 30C credit for such 
property, assuming all other statutory and regulatory requirements are 
met. The remainder of the analysis is the same as set forth in 
paragraph (e)(4) of this section (Example 4).
    (12) Example 12--(i) Facts. C owns a gasoline station. C decides to 
add retail hydrogen fueling capability to its existing gasoline station 
to facilitate the refueling of hydrogen fuel cell vehicles. C installs 
a bulk hydrogen storage tank ($900,000), cryogenic pumps ($5,000,000), 
evaporators associated with bulk storage ($700,000), cascade storage 
system ($1,300,000), electrical supply equipment used only for the 
hydrogen equipment ($150,000), a high-conductivity concrete pad 
(necessary to prevent static discharge during fueling), firewalls, and 
piping (collectively, $550,000) and two hydrogen dispensers ($160,000 
each) which include the dispensing control valves, connection hoses, 
hydrogen meters, and nozzles. All property is owned by C and is located 
at the point of refueling, meaning it is at the same or immediately 
adjacent physical address. All costs include labor costs. The property 
is property of a character subject to depreciation. All property is 
placed in service in the year it is installed, in an eligible census 
tract as described in paragraph (c) of this section.
    (ii) Analysis--(A) 30C property. The bulk hydrogen storage tank, 
cryogenic pumps, evaporators, cascade storage system, electrical supply 
equipment, high-conductivity concrete pad, firewalls, piping, and two 
hydrogen dispensers are 30C property under Sec.  1.30C-1(b)(1). The 
cryogenic pumps and electrical supply equipment are functionally 
interdependent with the cascade high-pressure storage tank under Sec.  
1.30C-1(b)(1)(i)(A) and (b)(14). The high-conductivity concrete pad, 
firewalls, and piping are functionally interdependent property with the 
dispensers, also under Sec.  1.30C-1(b)(1)(i)(A) and (b)(14). 
Collectively, this property is refueling property under Sec.  1.30C-
1(b)(1)(i)(A). The evaporators are an integral part associated with the 
bulk hydrogen storage tank under Sec.  1.30C-1(b)(1)(i)(B) and (b)(15). 
The hydrogen storage system, cryogenic pumps, evaporators, cascade 
storage system, electrical supply equipment, high-conductivity concrete 
pad, firewalls, piping, and two hydrogen fuel dispensers meet the other 
requirements of Sec.  1.30C-1(b)(1)(iii) because the properties are 
each subject to an allowance for depreciation, the original use of the 
properties begins with C, and the properties are placed in service in 
an eligible census tract as described in paragraph (c) of this section.
    (B) Calculation of the credit. (1) The bulk hydrogen storage tank 
system and the cascade high-pressure storage system are each qualified 
alternative fuel storage property and each is a single item of 30C 
property under Sec.  1.30C-1(b)(1) and paragraph (b)(1) of this 
section. Although the cascade high-pressure storage system is comprised 
of multiple storage tanks, the system is treated as a single item of 
alternative fuel storage property. The dispensers are each single items 
of 30C property pursuant to Sec.  1.30C-1(b)(1) and paragraph (b)(1) of 
this section.
    (2) Under paragraph (b)(3) of this section, the tentative section 
30C credit for the bulk hydrogen storage tank is the sum of the cost of 
the bulk hydrogen storage tank plus the cost of the evaporators (that 
is, the only associated property that is directly attributable and 
traceable to the bulk hydrogen storage tank), multiplied by the 
applicable percentage (6% or 30%, depending on whether the PWA 
requirements are satisfied) pursuant to section 30C(a). Therefore, the 
tentative section 30C credit for the bulk hydrogen storage tank is 
$96,000 (($900,000 + $700,000) x 6%) if the PWA requirements are not 
met, or $480,000 (($900,000 + $700,000) x 30%) if the PWA requirements 
are met. Under paragraph (b)(3) of this section, the section 30C credit 
for the bulk hydrogen storage tank, after applying the $100,000 
limitation in paragraph (a)(4)(i)(A) of this section, is $96,000 if the 
PWA requirements are not met, or $100,000 if the PWA requirements are 
met.
    (3) Under paragraph (b)(3) of this section, the costs taken into 
account in calculating the tentative section 30C credit for the cascade 
high-pressure storage system include the costs of any associated 
property that is directly attributable and traceable to the cascade 
high-pressure storage system, or a ratable share of the costs if the 
associated property if it is directly attributable and traceable to 
more than one item of property. The functionally interdependent 
property associated with the cascade high-pressure storage tank (that 
is, the cryogenic pumps and electrical supply equipment) is directly 
attributable and traceable to the cascade high-pressure storage system 
and no other item of property. Therefore, the tentative section 30C 
credit for the cascade high-pressure storage system is the sum of the 
costs of the cascade storage system and cryogenic pumps, and electrical 
supply equipment ($1,300,000 + $5,000,000 + $150,000),

[[Page 76778]]

multiplied by the applicable percentage (6% or 30%, depending on 
whether the PWA requirements are satisfied). Therefore, the tentative 
section 30C credit for the cascade high-pressure storage system is 
$387,000 (($1,300,000 + $5,000,000 + $150,000) x 6%) if the PWA 
requirements are not met, or $1,935,000 (($1,300,000 + $5,000,000 + 
$150,000) x 30%) if the PWA requirements are met. Under paragraph 
(b)(3) of this section, the section 30C credit for the cascade high-
pressure storage system, after applying the $100,000 limitation in 
paragraph (a)(4)(i)(A) of this section, is $100,000 if the PWA 
requirements are not met, or $100,000 if the PWA requirements are met.
    (4) The high-conductivity concrete pad, firewalls, and piping are 
functionally interdependent with the fuel dispensers; thus, the high-
conductivity concrete pad, firewalls, and piping are associated 
property under paragraph (b)(2) of this section with respect to the 
dispensers. Because the high-conductivity concrete pad, firewalls, and 
piping are directly attributable and traceable to both fuel dispensers 
and no other single item of 30C property, half of the costs are 
allocated to each dispenser under paragraph (b)(2)(ii) of this section. 
Therefore, under paragraph (b)(3) of this section, the tentative 
section 30C credit for each fuel dispenser is the sum of the cost of 
each the hydrogen dispenser and half the cost of the high-conductivity 
concrete pad, firewalls, and piping are multiplied by the applicable 
percentage (6% or 30%, depending on whether the PWA requirements are 
satisfied). Therefore, the tentative section 30C credit for each fuel 
dispenser is $26,100 ($160,000 + ($550,000 / 2) x 6%) if the PWA 
requirements are not met, or $130,500 (($160,000 + ($550,000 / 2)) x 
30%) if the PWA requirements are met. Under paragraph (b)(3) of this 
section, the final section 30C credit for each fuel dispenser, after 
applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this 
section, is $26,100 if the PWA requirements are not met, or $100,000 if 
the PWA requirements are met.
    (5) If C does not meet the PWA requirements, C's total section 30C 
credit for the year is $96,000 for the bulk hydrogen storage tank, plus 
$100,000 for the cascade high-pressure storage tank, plus $26,100 for 
each fuel dispenser, for a total of $248,200. If C meets the PWA 
requirements, C's total section 30C credit for the year is $100,000 for 
the bulk hydrogen storage tank, plus $100,000 for the cascade high-
pressure storage tank, plus $100,000 for each fuel dispenser, for a 
total of $400,000. The fact that this total credit exceeds the $100,000 
limit is not relevant because section 30C(b)(1) and paragraph 
(a)(4)(i)(A) of this section provide that the $100,000 limit applies on 
a per-item basis and is not an aggregate limit.
    (13) Example 13--(i) Facts. G installs a time-fuel compressed 
natural gas (CNG) station to refuel its fleet of heavy-duty CNG trucks 
at a central lot near its warehouse. The station has 10 fuel 
dispensers. From the existing utility gas meter, G installs a gas line, 
dryer, filter, and gas compressor, which costs $300,000. The gas 
compressor flows to buffer storage, which costs $100,000. The buffer 
storage flows through a temperature compensation unit, which costs 
$50,000, before flowing through to the dispensers, which dispense the 
CNG. Each fuel dispenser is capable of fueling at or above the 
dispenser's minimum rate of fueling, and has one hose and nozzle, which 
costs $10,000 per fuel dispenser. All property is owned by G and is 
located at the point of refueling, meaning it is on the same or 
immediately adjacent physical address. All costs include labor costs. 
The address where G installs these properties is located in an eligible 
census tract as described in paragraph (c) of this section.
    (ii) Analysis--(A) 30C property. The gas line, dryer, filter, gas 
compressor, buffer storage, temperature compensation unit, and fuel 
dispensers are 30C property pursuant to Sec.  1.30C-1(b)(1) and 
paragraph (b)(1) of this section. The gas line, dryer, filter, gas 
compressor, and temperature compensation unit are functionally 
interdependent with the dispensers pursuant to Sec.  1.30C-1(b)(14). 
Together, these items of property constitute refueling property under 
Sec.  1.30C-1(b)(1)(i)(A). Each fuel dispenser, the gas line, dryer, 
filter, gas compressor, buffer storage, and temperature compensation 
unit, all meet the other requirements of Sec.  1.30C-1(b)(1)(iii) 
because the properties are each subject to an allowance for 
depreciation, the original use of the properties begins with G, and the 
properties are placed in service (as described in paragraph (b)(6) of 
this section) in an eligible census tract as described in paragraph (c) 
of this section.
    (B) Calculation of the credit. (1) Each fuel dispenser is a single 
item of 30C property pursuant to paragraph (b)(1)(ii) of this section 
and Sec.  1.30C-1(b)(12). The gas line, dryer, filter, gas compressor, 
and temperature compensation unit are each associated property pursuant 
to paragraph (b)(2) of this section, and their cost is allocated 
ratably to each dispenser (($300,000 + $50,000) / 10 = $35,000). The 
buffer storage is a single item of 30C property pursuant to Sec.  
1.30C-1(b)(1) and paragraph (b)(1) of this section.
    (2) If G does not meet the PWA requirements, under paragraph 
(b)(3)(i) of this section, the tentative section 30C credit for each 
fuel dispenser is the sum of the cost of that single item of 30C 
property (that is, the fuel dispenser) ($10,000) and the ratable share 
of the cost of other associated property ($35,000) multiplied by the 
applicable percentage (6%), or $2,700, (($10,000 + $35,000) x 6% = 
$2,700). The tentative section 30C credit for the cost of the buffer 
storage is the cost of the buffer storage multiplied by the applicable 
percentage (6%) or $6,000 ($100,000 x 6% = $6,000). Under paragraph 
(b)(3) of this section, after applying the $100,000 limitation in 
paragraph (a)(4)(i)(A) of this section, if the PWA requirements are not 
met, the final section 30C credit for each fuel dispenser is $2,700 and 
the final section 30C credit for the buffer storage is $6,000. The 
total section 30C credit is $33,000 (($2,700 x 10) + $6,000)).
    (3) If G meets the PWA requirements, the tentative section 30C 
credit under paragraph (b)(3) of this section for each dispenser is 
$13,500, (($10,000 + $35,000) x 30% = $13,500). The tentative section 
30C credit for the buffer storage is $30,000 ($100,000 x 30% = 
$30,000). Under paragraph (b)(3) of this section, after applying the 
$100,000 limitation in paragraph (a)(4)(i)(A) of this section, if the 
PWA requirements are met, the final section 30C credit for each fuel 
dispenser is $13,500 and the final section 30C credit for the buffer 
storage is $30,000. The total section 30C credit is $165,000 (($13,500 
x 10) + $30,000)). The fact that this total credit exceeds the $100,000 
limit is not relevant because the $100,000 limit applies on a per-item 
basis and is not an aggregate limit.
    (14) Example 14--(i) Facts. The facts are the same as paragraph 
(e)(13) of this section (Example 13), except that G also installs a 
local utility line ($400,000) and gas utility meter ($5,000) to service 
its CNG refueling station. The portion of cost of the local utility 
line on the same or immediately adjacent physical address as the CNG 
dispensers is $100,000. The gas utility meter is also on the same or 
immediately adjacent physical address as the CNG dispensers. All 
property is owned by G. All costs include labor costs. Each of the 
above properties is property of a character subject to depreciation and 
is placed in service at the time it is installed. The physical address 
where G installs a

[[Page 76779]]

portion of the local utility line and gas utility meter is located in 
an eligible census tract as described in paragraph (c) of this section.
    (ii) Analysis--(A) 30C property. The portion of the local utility 
line that is on the same or immediately adjacent physical address as 
the CNG dispensers and gas utility meter are 30C property pursuant to 
Sec. Sec.  1.30C-1(b)(1) and paragraph (b)(1) of this section. The 
portion of the local utility line that is on the same or immediately 
adjacent physical address as the CNG dispensers is located at the point 
of refueling under Sec.  1.30-1(b)(16). (The remaining portion is not 
located at the point of refueling and is therefore not 30C property.) 
The gas meter is also located at the point of refueling under Sec.  
1.30-1(b)(16) because it is on the same or immediately adjacent 
physical address as the CNG dispensers. Further, the portion of the 
local utility line that is on the same or immediately adjacent physical 
address as the CNG dispensers and the gas meter constitute integral 
part property with respect to the fuel dispensers under Sec.  1.30C-
1(b)(15). Together with the gas line, dryer, filter, gas compressor, 
and temperature compensation unit, the utility line and the gas meter 
are refueling property under Sec.  1.30C-1(b)(1)(i)(A).
    (B) Calculation of the credit. (1) Each fuel dispenser is a single 
item of 30C property pursuant to paragraph (b)(1)(ii) of this section 
and Sec.  1.30C-1(b)(12). The local utility line and gas utility meter 
are each associated property pursuant to paragraph (b)(2) of this 
section. Their costs are allocated ratably to each dispenser (($100,000 
+ $5,000) / 10 = $10,500) under paragraph (b)(2)(ii) of this section.
    (2) If G does not meet the PWA requirements, under paragraph (b)(3) 
of this section, the tentative section 30C credit for each fuel 
dispenser is the sum of the dispenser, the ratable cost of the gas 
line, dryer, filter, the gas compressor and temperature compensation 
unit, and the ratable share of the local utility line and gas utility 
meter, multiplied by the applicable percentage (6%), or $3,330, 
(($10,000 + $35,000 + $10,500) x 6% = $3,330). The tentative section 
30C credit for the cost of the buffer storage is $6,000 ($100,000 x 6% 
= $6,000). Under paragraph (b)(3) of this section, after applying the 
$100,000 limitation in paragraph (a)(4)(i)(A) of this section, if the 
PWA requirements are not met, the final section 30C credit for each 
fuel dispenser is $3,330 and the final section 30C credit for the 
buffer storage is $6,000. The total section 30C credit is $39,330 
(($3,330 x 10) + $6,000)).
    (3) If G meets the PWA requirements, the tentative section 30C 
credit for each dispenser is $16,650, (($10,000 + $35,000 + $10,500) x 
30% = $16,650). The tentative section 30C credit for the cost of the 
buffer storage is $30,000 ($100,000 x 30% = $30,000). Under paragraph 
(b)(3) of this section, after applying the $100,000 limitation in 
paragraph (a)(4)(i)(A) of this section, if the PWA requirements are 
met, the final section 30C credit for each fuel dispenser is $16,650 
and the final section 30C credit for the buffer storage is $30,000. The 
total section 30C credit is $196,500 (($16,650 x 10) + $30,000)). The 
fact that this total credit exceeds the $100,000 limit is not relevant 
because the $100,000 limit applies on a per-item basis and is not an 
aggregate limit.
    (15) Example 15--(i) Facts. W installs a refueling station that is 
used to refuel forklift trucks with qualified alternative fuel.
    (ii) Analysis. The refueling station is not 30C property under 
Sec.  1.30C-1(b)(1) and paragraph (b)(1) of this section. Section 
1.30C-1(b)(1)(i)(A) requires that 30C property must be used to store or 
dispense qualified alternative fuel at the point where the fuel is 
dispensed into the fuel tank of a ``motor vehicle.'' Although a 
forklift truck occasionally may be operated on public roads, it is 
manufactured primarily for hauling loads in factories, warehouses, and 
other similar settings, and not for use on public streets, roads, and 
highways. Therefore, a forklift truck is not a ``motor vehicle'' for 
purposes of the section 30C credit under Sec.  1.30C-1(b)(17).
    (f) Claim requirements. A taxpayer claiming the section 30C credit 
must attach a Form 8911, Alternative Fuel Vehicle Refueling Property 
Credit, or any successor form required by the IRS, completed in 
accordance with the form instructions, and file it with the return on 
which the section 30C credit is claimed.
    (g) Applicability date. This section applies to property placed in 
service in taxable years ending after [date of publication of final 
regulations in the Federal Register].
0
Par. 3. Section 1.30C-3 is revised to read as follows:


Sec.  1.30C-3  Rules relating to the increased credit amount for 
prevailing wage and apprenticeship.

    (a) In general. If any qualified alternative fuel vehicle refueling 
project (as defined by section 30C(g)(1)(B)) (30C project) placed in 
service during the taxable year satisfies the requirements in paragraph 
(b) of this section, the credit determined under section 30C(a) for any 
30C property of a character subject to an allowance for depreciation 
that is part of such 30C project is multiplied by five.
    (b) 30C project requirements--(1) In general. A 30C project 
satisfies the requirements of this paragraph (b) if it is one of the 
following--
    (i) A project the construction of which began prior to January 29, 
2023; or
    (ii) A project that meets the prevailing wage requirements of 
section 45(b)(7) of the Code and Sec.  1.45-7, the apprenticeship 
requirements of section 45(b)(8) and Sec.  1.45-8, and the 
recordkeeping and reporting requirements of Sec.  1.45-12, all with 
respect to the construction of any 30C property within the meaning of 
section 30C and the section 30C regulations before such 30C property is 
placed in service.
    (2) Determination of a project. Multiple 30C properties will be 
treated as a single 30C project if the items of property are 
constructed and operated on a contiguous piece of land, owned by a 
single taxpayer (subject to the related taxpayer rule provided in 
paragraph (b)(3) of this section), placed in service in a single 
taxable year, and one or more of the following factors is present:
    (i) The properties are described in one or more common 
environmental or other regulatory permits;
    (ii) The properties are constructed pursuant to a single master 
construction contract; or
    (iii) The construction of the properties is financed pursuant to 
the same loan agreement.
    (3) Related taxpayers--(i) Definition. For purposes of this 
section, the term related taxpayers means members of a group of trades 
or businesses that are under common control (as defined in Sec.  1.52-
1(b)).
    (ii) Related taxpayer rule. For purposes of this section, related 
taxpayers are treated as one taxpayer in determining whether multiple 
properties are treated as a 30C project with respect to which a section 
30C credit may be determined.
    (c) Coordination with 30C(e)(2) and Sec.  1.30C-4(c). If a person 
who sells 30C property, the use of which is described in section 
50(b)(3) or (4) and which is not subject to a lease, is treated as the 
taxpayer that placed such property in service under section 30C(e)(2), 
such person will be treated as the taxpayer responsible for satisfying 
the recordkeeping and reporting requirements of Sec.  1.45-12.
    (d) Examples. The following examples illustrate the rules of this 
section.
    (1) Example 1--(i) Facts. D owns and operates electric charging 
stations. In

[[Page 76780]]

Year 1, D places in service five chargers, each with one charging port, 
on Parcel 1. In the same year, D also places in service three chargers, 
each with one charging port, on Parcel 2. Parcel 1 and Parcel 2 are a 
mile apart from each other. D submits a single environmental permit 
covering both charging stations and obtains financing pursuant to the 
same loan agreement. D meets the requirements of section 30C(g) and 
this section (that is, the PWA requirements) for the chargers installed 
on Parcel 1 but does not meet the PWA requirements for the chargers 
installed on Parcel 2. The chargers installed on Parcel 1 and Parcel 2 
are depreciable property and meet all other requirements to be 30C 
property.
    (ii) Analysis. Under paragraph (b)(2) of this section, the chargers 
placed in service on Parcel 1 are treated as a separate 30C project 
from the chargers placed in service on Parcel 2 because the properties 
are not on contiguous piece of land. Therefore, under Sec.  1.30C-
2(a)(2)(ii), D is eligible for a credit of 30 percent of the cost of 
the five chargers placed in service on Parcel 1, but only 6 percent of 
the cost of the three chargers placed in service on Parcel 2 under 
Sec.  1.30C-2(a)(2)(i).
    (2) Example 2--(i) Facts. The facts are the same as paragraph 
(d)(1) of this section (Example 1), except that Parcel 1 and Parcel 2 
are contiguous pieces of land.
    (ii) Analysis. Under paragraph (b)(2) of this section, the chargers 
installed on Parcel 1 and Parcel 2 are treated as a single 30C project 
because they are constructed on a contiguous piece of land, are owned, 
and operated by a single taxpayer, placed in service by a single 
taxpayer in a single year, described in a common environmental permit, 
and financed pursuant to the same loan agreement. Therefore, because D 
did not meet the PWA requirements with respect to the chargers placed 
in service in parcel 2, D is eligible for only the 6 percent credit for 
both the parcel 1 and parcel 2 property under Sec.  1.30C-2(a)(2)(i).
    (e) Applicability date. This section applies to property placed in 
service in taxable years ending after [date of publication of final 
regulations in the Federal Register].
0
Par. 4. Section 1.30C-4 is added to read as follows:


Sec.  1.30C-4   Special rules.

    (a) No credit allowable in certain circumstance--(1) Property used 
outside the United States. Except as provided in paragraph (a)(2) of 
this section, pursuant to sections 30C(e)(3) and 50(b)(1) of the Code, 
no section 30C credit is allowable with respect to any property placed 
in service for use predominantly outside the United States.
    (2) Property placed in service in a United States territory. 
Pursuant to sections 30C(e)(3), 50(b)(1) and 168(g)(4)(G) of the Code, 
paragraph (a)(1) of this section does not apply to 30C property that is 
owned by a domestic corporation or by a United States citizen (other 
than a citizen entitled to the benefits of section 931 or 933 of the 
Code) and that is used predominantly in a territory of the United 
States by such a corporation or such a citizen, or by a corporation 
created or organized in, or under the law of, a territory of the United 
States.
    (3) Section 179. No section 30C credit is allowable with respect to 
the portion of the cost of any property taken into account under 
section 179 of the Code.
    (b) Recapture--(1) In general. The rules in this paragraph (b) 
provide for recapturing the benefit of any allowable section 30C credit 
with respect to any property that ceases to be property eligible for 
such credit. If a recapture event occurs with respect to a taxpayer's 
30C property, the taxpayer must include the recapture amount in taxable 
income under chapter 1 of the Code for the taxable year in which the 
recapture event occurs (recapture year).
    (2) Recapture event. A recapture event occurs if, within three 
years of the property being placed in service--
    (i) The taxpayer claiming the section 30C credit modifies the 
property such that the property no longer qualifies as 30C property;
    (ii) Unless the property is subject to section 6417(d)(2)(B) of the 
Code, the depreciable property (other than apportioned-use property) 
ceases to be used predominantly in a trade or business (that is, 50 
percent or more of the use of the 30C property in a taxable year is for 
use other than in a trade or business);
    (iii) For apportioned-use property, the 30C property completely 
ceases to be used in a trade or business, but continues to be used for 
personal use; or
    (iv) The taxpayer claiming the section 30C credit sells or disposes 
of the 30C property and the taxpayer knows or has reason to know that 
the property will be used in a manner described in paragraph (b)(2)(i) 
or (ii) of this section. Any other sale or disposition (including a 
disposition by reason of an accident or other casualty) of 30C property 
is not a recapture event.
    (3) Property placed in service in a location that ceases to be in a 
qualified census tract. 30C property is not subject to the recapture 
provisions of this paragraph (b) solely because it is placed in service 
in a location that subsequently ceases to be in a qualified census 
tract.
    (4) Recapture amount--(i) In general. The recapture amount is 
generally equal to the benefit of the section 30C credit allowable 
multiplied by a fraction, the numerator of which is three minus the 
number of years prior to, but not including, the recapture year, and 
the denominator of which is three.
    (ii) Special rule for apportioned-use property. For purposes of the 
calculation described in paragraph (b)(4)(i) of this section with 
respect to apportioned-use property, the benefit of the section 30C 
credit is equal to the difference between the credit claimed by the 
taxpayer and the credit that would have been allowed if the 
apportioned-use property were used solely for personal use under Sec.  
1.30C-2(a)(2)(iii) (as limited by Sec.  1.30C-2(a)(4)(i)(B)).
    (5) Basis adjustment. As of the first day of the recapture year, 
the basis of the 30C property is increased by the recapture amount. For 
30C property that is of a character that is subject to an allowance for 
depreciation, including property subject to section 6417(d)(2)(B), this 
increase in basis is recoverable over its remaining recovery period 
beginning as of the first day of the taxable year in which the 
recapture event occurs.
    (c) Property used by a tax-exempt or governmental entity--(1) In 
general. Except as provided in paragraph (c)(2) of this section, if a 
person sells 30C property, the use of which is described in section 
50(b)(3) or (4) (generally, property used by certain tax-exempt 
organizations, governmental entities, or foreign persons or entities), 
such person or entity purchasing the property uses the property as 
described in section 50(b)(3) or (4), the property is not subject to a 
lease, and the seller clearly discloses to the person or entity using 
such property in a document the amount of any credit allowable under 
section 30C(a) with respect to such property (determined without regard 
to section 30C(d)) and that the seller intends to claim such credit, 
then the seller is treated as the taxpayer that placed such property in 
service. For purposes of section 30C(d), property to which this 
paragraph (c)(1) applies will be treated as of a character subject to 
an allowance for depreciation.
    (2) Interaction with section 6417. If the person or entity using 
30C property in a manner that would otherwise be considered as 
described in section 50(b)(3) or (4) notifies the seller in writing of 
an intent to make an elective payment election pursuant to section 
6417(a) with respect to the section 30C

[[Page 76781]]

credit, then the use of the 30C property is treated as not being 
described in section 50(b)(3) or (4) for purposes of paragraph (c)(1) 
of this section. As a result, paragraph (c)(1) will not apply, meaning 
that the seller will not be treated as having placed the 30C property 
in service and cannot claim any credit allowable under section 30C(a) 
with respect to such property. The section 30C credit will only be 
allowed to one taxpayer for the same 30C property.
    (d) Dual-use property--(1) Dual use property used for dispensing or 
storing qualified alternative fuel and conventional fuel. In the case 
of dual-use property that is used to store and/or dispense both 
qualified alternative fuel and conventional fuel, the cost of the dual-
use property is taken into account in computing a taxpayer's section 
30C credit only to the extent such cost exceeds the cost of an 
equivalent conventional refueling property. For purposes of this 
paragraph (d)(1), equivalent conventional refueling property is 
conventional refueling property that is not used to store and/or 
dispense qualified alternative fuel but is otherwise comparable to the 
dual-use property and can store and/or dispense the same amount of 
conventional fuel as the dual-use property.
    (2) Qualified alternative fuel storage. In the case of dual-use 
property that is used both to store qualified alternative fuel that is 
dispensed into the fuel tanks of motor vehicles at the location of the 
storage facility and to store fuel that is transported to other 
locations, the cost of the dual-use property is taken into account in 
computing a taxpayer's section 30C credit only to the extent such cost 
exceeds the cost of a storage facility that is equivalent to the dual-
use property except that it is used for the sole purpose of storing 
qualified alternative fuel that is transported to other locations and 
can store the same amount of qualified alternative fuel as the dual-use 
property stores for transport to other locations.
    (3) Dual use property used to store or transmit electricity for 
charging a motor vehicle and for other purposes. In the case of dual-
use property that is used to store or transmit electricity both to 
charge a motor vehicle and for purposes other than charging a motor 
vehicle, the cost of the dual-use property is taken into account in 
computing the section 30C credit only to the extent such cost exceeds 
the cost of equivalent property used for purposes other than charging a 
motor vehicle.
    (4) Example--(i) Facts. X, a qualified alternative fuel wholesaler 
and retailer, owns and operates retail qualified alternative fuel 
filling stations. X maintains a regional hub where it stores qualified 
alternative fuel that it transports to its retail filling stations, 
using tanker trucks, for sale to customers. In 2024, X places in 
service a new storage tank to store qualified alternative fuel and a 
new fuel dispenser at its regional hub. X uses the new fuel dispenser 
to fill the fuel tanks of its tanker trucks (meaning it uses the fuel 
to power the tanker trucks in addition to transporting the fuel to 
retail locations). Because the amount of fuel used to power the tanker 
trucks is minimal compared to the fuel transported to the retail 
locations, the storage tank has the same capacity as the tank that 
would have been used for the sole purpose of storing the qualified 
alternative fuel that is supplied to X's customers. X's regional hub is 
in a non-urban area census tract as described in Sec.  1.30C-2(c)(3).
    (ii) Analysis. The storage tank and dispenser are 30C property 
within the meaning of Sec.  1.30C-1(b)(1). Specifically, they are 
refueling property within the meaning of Sec.  1.30C-1(b)(1)(i)(A) 
because they are used to store and dispense qualified alternative fuel 
into the fuel tanks of X's fuel tanker trucks. Additionally, the 
storage tank and dispenser meet the other requirements under Sec.  
1.30C-1(b)(1)(iii) because they are of a character subject to an 
allowance for depreciation (because X uses them in its trade or 
business), the original use of the property began with X, and X placed 
the property in service in an eligible census tract. However, the 
storage tank is dual-use property described in paragraph (d)(2) of this 
section because it is used both to store qualified alternative fuel 
that is dispensed into the fuel tanks of motor vehicles at the location 
of the storage facility (that is, the fuel used to power the tanker 
trucks) and to store fuel that is transported to other locations. Under 
paragraph (d)(2), the cost of the storage tank is taken into account in 
computing the section 30C credit only to the extent that cost exceeds 
the cost of the storage tank that would have been used for the sole 
purpose of storing the qualified alternative fuel that is transported 
to X's retail filling stations. Because no increase in the capacity of 
the storage tank is needed, none of the storage tank's cost is taken 
into account in computing the amount of the section 30C credit.
    (e) Applicability date. This section applies to property placed in 
service in taxable years ending after [date of publication of final 
regulations in the Federal Register].
0
Par. 5. Section 1.48-9, as proposed to be revised at 88 FR 82188 
(November 22, 2023), is further amended by adding paragraph (e)(10)(vi) 
to read as follows:


Sec.  1.48-9   Definition of energy property.

* * * * *
    (e) * * *
    (10) * * *
    (vi) Property primarily used in the transportation of goods or 
individuals and not for the production of electricity. Energy storage 
property is primarily used in the transportation of goods or 
individuals and not for the production of electricity, and therefore is 
not energy storage technology eligible for the section 48 credit, if a 
credit is claimed under section 30C for such property.
* * * * *
0
Par. 6. Section 1.48E-0, as proposed to be added at 89 FR 47792 (June 
3, 2024), is further amended by adding an entry for Sec.  1.48E-
2(g)(6)(iv), in numerical order, to read as follows:


Sec.  1.48E-0  Table of contents.

* * * * *
Sec.  1.48E-2 Qualified investments in qualified facilities and EST 
for purposes of section 48E.
* * * * *
    (g) * * *
    (6) * * *
    (iv) Property primarily used in the transportation of goods or 
individuals and not for the production of electricity.
* * * * *
0
Par. 7. Section 1.48E-2, as proposed to be added at 89 FR 47792 (June 
3, 2024), is further amended by adding paragraph (g)(6)(iv) to read as 
follows:


Sec.  1.48E-2   Qualified investments in qualified facilities and EST 
for purposes of section 48E.

* * * * *
    (g) * * *
    (6) * * *
    (iv) Property primarily used in the transportation of goods or 
individuals and not for the production of electricity. Energy storage 
property is primarily used in the transportation of goods or 
individuals and not for the production of electricity, and therefore is 
not EST eligible for the section 48E credit, if a credit is claimed 
under section 30C for such property.
* * * * *
0
Par. 8. Section 1.6417-0 is amended by revising the entry for Sec.  
1.6417-6(e) to read as follows:


Sec.  1.6417-0  Table of contents.

* * * * *
Sec.  1.6417-6 Special rules.
* * * * *
    (e) Applicability dates.


[[Page 76782]]


0
Par. 9. Section 1.6417-6 is amended by:
0
1. Adding two sentences to the end of paragraph (b)(1).
0
2. Revising paragraph (e).
    The addition and revision read as follows:


Sec.  1.6417-6  Special rules.

* * * * *
    (b) * * *
    (1) * * * For purposes of this paragraph (b)(1), if an applicable 
credit is subject to section 50, then section 50 applies without regard 
to section 50(b)(3) and (b)(4)(A)(i). If another provision of the Code 
contains a basis reduction and/or recapture provision outside of 
section 50 that impacts the available credit (such as sections 30C(e), 
45Q(f)(4), and 48(a)(10)), then the rules of that provision of the Code 
and the regulations issued under that provision of the Code apply, 
except that any applicable credit continues to be determined without 
regard to section 50(b)(3) and (4)(A)(i) and by treating any property 
with respect to which such credit is determined as used in a trade or 
business of the applicable entity, consistent with section 6417(d)(2) 
and Sec.  1.6417-2(c).
* * * * *
    (e) Applicability dates--(1) In general. Except as provided in 
paragraph (e)(2) of this section, this section applies to taxable years 
ending on or after March 11, 2024. For taxable years ending before 
March 11, 2024, taxpayers, however, may choose to apply the rules of 
Sec. Sec.  1.6417-1 through 1.6417-4 and this section, provided the 
taxpayers apply the rules in their entirety and in a consistent manner.
    (2) Paragraph (b)(1). The second and third sentences of paragraph 
(b)(1) of this section apply to property placed in service in taxable 
years ending after [date of publication of final regulations in the 
Federal Register].
0
Par. 10. Section 1.6418-0 is amended under the heading Sec.  1.6418-5 
by:
0
1. Redesignating the entries for (g) through (j) as (h) through (k);
0
2. Adding new entry (g); and
0
3. Revising newly redesignated entry (k).
    The addition and revision read as follows:


Sec.  1.6418-0  Table of contents.

* * * * *
Sec.  1.6418-5 Special rules.
* * * * *
    (g) Notification and impact of recapture under section 
30C(e)(5).
* * * * *
    (k) Applicability dates.

0
Par. 11. Section 1.6418-5 is amended by:
0
1. Revising paragraph (c).
0
2. Redesignating paragraphs (g) through (j) as paragraphs (h) through 
(k), respectively.
0
3. Adding new paragraph (g).
0
4. Revising newly redesignated paragraph (k).
    The revision and addition read as follows:


Sec.  1.6418-5  Special rules.

* * * * *
    (c) Basis reduction rules--(1) Section 50(c) basis reduction. In 
the case of any transfer election under Sec.  1.6418-2 or Sec.  1.6418-
3 with respect to any specified credit portion described in Sec.  
1.6418-1(c)(2)(ix) through (xi), section 50(c) will apply to the 
applicable investment credit property (as defined in section 
50(a)(6)(A)) as if such credit was allowed to the eligible taxpayer.
    (2) Section 30C(e)(1) basis reduction. In the case of any transfer 
election under Sec.  1.6418-2 or Sec.  1.6418-3 with respect to any 
specified credit portion described in Sec.  1.6418-1(c)(2)(i), section 
30C(e)(1) will apply to the 30C property as defined in Sec.  1.30C-
1(b)(1) as if such credit was allowed to the eligible taxpayer.
* * * * *
    (g) Notification and impact of recapture under section 30C(e)(5)--
(1) In general. In the case of any election under Sec.  1.6418-2 or 
Sec.  1.6418-3 with respect to any specified credit portion described 
in Sec.  1.6418-1(c)(2)(i), if, during any taxable year, a recapture 
event as described in Sec.  1.30C-4(b)(2) occurs with respect to a 30C 
property as defined in Sec.  1.30C-1(b)(1) within three years of being 
placed in service, such eligible taxpayer and the transferee taxpayer 
must follow the notification process in paragraph (g)(2) of this 
section with recapture impacting the transferee taxpayer as described 
in paragraph (g)(3) of this section.
    (2) Notification requirements. The notification requirements for 
the eligible taxpayer and the transferee taxpayer are the same as for 
an eligible taxpayer and transferee taxpayer that must report notice of 
the occurrence of a recapture event and notice of the recapture amount 
as described in paragraphs (d)(2)(i) and (ii) of this section, 
respectively, except that the recapture amount that must be computed is 
defined in Sec.  1.30C-4(b)(4).
    (3) Impact of recapture--(i) Section 30C(e)(5) recapture event. The 
transferee taxpayer is responsible for any amount of tax increase under 
section 30C(e)(5) and Sec.  1.30C-4(b)(4) upon the occurrence of a 
recapture event under Sec.  1.30C-4(b), provided that if an eligible 
taxpayer retains any amount of an eligible credit determined with 
respect to 30C property directly held by the eligible taxpayer, the 
amount of the tax increase under section 30C(e)(5) and Sec.  1.30C-
4(b)(4) that the eligible taxpayer is responsible for is equal to the 
recapture amount multiplied by a fraction, the numerator of which is 
the total credit amount that the eligible taxpayer retained, and the 
denominator of which is the total credit amount determined for the 
eligible credit property. The amount of the tax increase under section 
30C(e)(5) that the transferee taxpayer is responsible for is equal to 
the recapture amount multiplied by a fraction, the numerator of which 
is the specified credit portion transferred to the transferee taxpayer, 
and the denominator of which is the total credit amount determined for 
the eligible credit property.
    (ii) Impact of section 30C(e)(5) recapture event on basis of 30C 
property held by eligible taxpayer. The eligible taxpayer must increase 
the basis of the 30C property as defined in Sec.  1.30C-1(b)(1) (as of 
the first day of the taxable year in which the recapture event occurs) 
by an amount equal to the recapture amount provided to the eligible 
taxpayer by the transferee taxpayer under paragraph (g)(2) of this 
section and the recapture amount on any credit amounts retained by the 
eligible taxpayer in accordance with section 30C(e)(5) and Sec.  1.30C-
4(b).
* * * * *
    (k) Applicability date--(1) In general. Except as provided in 
paragraph (k)(2) of this section, this section applies to taxable years 
ending on or after April 30, 2024. For taxable years ending before 
April 30, 2024, taxpayers, however, may choose to apply the rules of 
this section and Sec. Sec.  1.6418-1 through 1.6418-3 provided the 
taxpayers apply the rules in their entirety and in a consistent manner.
    (2) Paragraphs (c)(2) and (g). Paragraphs (c)(2) and (g) of this 
section apply to property placed in service in taxable years ending 
after [date of publication of final regulations in the Federal 
Register].

Douglas W. O'Donnell,
Deputy Commissioner.
[FR Doc. 2024-20748 Filed 9-18-24; 8:45 am]
BILLING CODE 4830-01-P