26 U.S.C. § 179C : US Code - Section 179C: Election to expense certain refineries

Search 26 U.S.C. § 179C : US Code - Section 179C: Election to expense certain refineries

(a) Treatment as expenses
A taxpayer may elect to treat 50 percent of the cost of any
qualified refinery property as an expense which is not chargeable
to capital account. Any cost so treated shall be allowed as a
deduction for the taxable year in which the qualified refinery
property is placed in service.
(b) Election
(1) In general
An election under this section for any taxable year shall be
made on the taxpayer's return of the tax imposed by this chapter
for the taxable year. Such election shall be made in such manner
as the Secretary may by regulations prescribe.
(2) Election irrevocable
Any election made under this section may not be revoked except
with the consent of the Secretary.
(c) Qualified refinery property
(1) In general
The term "qualified refinery property" means any portion of a
qualified refinery -
(A) the original use of which commences with the taxpayer,
(B) which is placed in service by the taxpayer after the date
of the enactment of this section and before January 1, 2012,
(C) in the case any portion of a qualified refinery (other
than a qualified refinery which is separate from any existing
refinery), which meets the requirements of subsection (e),
(D) which meets all applicable environmental laws in effect
on the date such portion was placed in service,
(E) no written binding contract for the construction of which
was in effect on or before June 14, 2005, and
(F)(i) the construction of which is subject to a written
binding construction contract entered into before January 1,
2008,
(ii) which is placed in service before January 1, 2008, or
(iii) in the case of self-constructed property, the
construction of which began after June 14, 2005, and before
January 1, 2008.
(2) Special rule for sale-leasebacks
For purposes of paragraph (1)(A), if property is -
(A) originally placed in service after the date of the
enactment of this section by a person, and
(B) sold and leased back by such person within 3 months after
the date such property was originally placed in service,
such property shall be treated as originally placed in service
not earlier than the date on which such property is used under
the leaseback referred to in subparagraph (B).
(3) Effect of waiver under Clean Air Act
A waiver under the Clean Air Act shall not be taken into
account in determining whether the requirements of paragraph
(1)(D) are met.
(d) Qualified refinery
For purposes of this section, the term "qualified refinery" means
any refinery located in the United States which is designed to
serve the primary purpose of processing liquid fuel from crude oil
or qualified fuels (as defined in section 45K(c)).
(e) Production capacity
The requirements of this subsection are met if the portion of the
qualified refinery -
(1) enables the existing qualified refinery to increase total
volume output (determined without regard to asphalt or lube oil)
by 5 percent or more on an average daily basis, or
(2) enables the existing qualified refinery to process
qualified fuels (as defined in section 45K(c)) at a rate which is
equal to or greater than 25 percent of the total throughput of
such qualified refinery on an average daily basis.
(f) Ineligible refinery property
No deduction shall be allowed under subsection (a) for any
qualified refinery property -
(1) the primary purpose of which is for use as a topping plant,
asphalt plant, lube oil facility, crude or product terminal, or
blending facility, or
(2) which is built solely to comply with consent decrees or
projects mandated by Federal, State, or local governments.
(g) Election to allocate deduction to cooperative owner
(1) In general
If -
(A) a taxpayer to which subsection (a) applies is an
organization to which part I of subchapter T applies, and
(B) one or more persons directly holding an ownership
interest in the taxpayer are organizations to which part I of
subchapter T apply,
the taxpayer may elect to allocate all or a portion of the
deduction allowable under subsection (a) to such persons. Such
allocation shall be equal to the person's ratable share of the
total amount allocated, determined on the basis of the person's
ownership interest in the taxpayer. The taxable income of the
taxpayer shall not be reduced under section 1382 by reason of any
amount to which the preceding sentence applies.
(2) Form and effect of election
An election under paragraph (1) for any taxable year shall be
made on a timely filed return for such year. Such election, once
made, shall be irrevocable for such taxable year.
(3) Written notice to owners
If any portion of the deduction available under subsection (a)
is allocated to owners under paragraph (1), the cooperative shall
provide any owner receiving an allocation written notice of the
amount of the allocation. Such notice shall be provided before
the date on which the return described in paragraph (2) is due.
(h) Reporting
No deduction shall be allowed under subsection (a) to any
taxpayer for any taxable year unless such taxpayer files with the
Secretary a report containing such information with respect to the
operation of the refineries of the taxpayer as the Secretary shall
require.