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Focus on Manufacturing: Advanced Energy Manufacturing Tax Credits

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The “Security in Energy and Manufacturing Act of 2010,” otherwise known as the SEAM Act, was introduced last week in the U.S. Senate. A similar, now companion, bill was introduced in the House in mid-April.
May 11, 2010

The “Security in Energy and Manufacturing Act of 2010,” otherwise known as the SEAM Act, was introduced last week in the U.S. Senate. A similar, now companion, bill was introduced in the House in mid-April.

This E-Focus provides RubinBrown clients and contacts insight into the basic details related to this new legislation.

The SEAM Act builds upon a provision (Section 48c - Advanced Energy Manufacturing Tax Credit) of the American Recovery and Reinvestment Act (ARRA). Section 48c established an energy manufacturing tax credit of 30 percent for investments in new, expanded, or re-equipped green energy manufacturing facilities. Qualifying facilities must manufacture a wide range of clean energy products, including wind turbines, solar panels, hybrid vehicle systems, carbon capture and sequestration systems, and biofuel refinery components, among others.

Since last Fall, Section 48c has provided for $2.3 billion in federal funds, which leveraged more than $5.4 billion of private investment that supported the creation of manufacturing jobs. The funds distributed through the first wave of funding are estimated to have created 17,000 jobs, plus an additional 41,000 jobs through matching private investment.

While Section 48c supported 183 projects in 43 states, hundreds more eligible projects applied for funding and were denied due to a lack of funds.

The Department of Energy (DOE) states that the program was more than three times oversubscribed. Many manufacturers are waiting in the pipeline, and would be ready to break ground soon after they receive funding.

The SEAM Act extends the Section 48c program and allows for grants in lieu of tax credits. This enables many manufacturers who otherwise would be unable to utilize the program (no tax liabilities or limited ability to find credit) to receive grants to fund their energy products.

Both the tax credit and grant would remain at 30 percent of the cost of the project.

As potential passage of the SEAM Act progresses through Congress, RubinBrown will keep you informed, as well as detail ways it will affect your company.

 

Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.

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