After having expired on the finish of 2021, the Inner Income Code Part 30C tax credit score for electrical car charging stations is again. Technically known as the “Various Gas Car Refueling Property Credit score”, the Part 30C tax credit score will come again into power for charging stations positioned in service after December 31, 2022. Whereas the credit score will look much like the credit score that expired on December 31, 2021, there shall be some key distinctions to concentrate to.
The headline numbers for the brand new Part 30C tax credit score are as follows: as much as a 30 % of the price of a “certified various gas car refueling” station, topic to a restrict of $100,000 per station. (IRC 30C(a)-(b)). With these headline numbers come some caveats, nonetheless.
Much like a few of the constraints we’ve got written about for the ITC and PTC, the Part 30C credit score is topic to a 6 % baseline, with the complete 30 % credit score solely obtainable if sure prevailing wage and apprenticeship necessities are met. Along with these labor limitations, the IRA put geographic limitations on the Part 30C tax credit score.
Particularly, the EV charging station should be positioned in an “eligible census tract”, which definition creates two paths for eligibility: (1) charging stations positioned in a “low-income group” as outlined in Part 45D(e) of the IRC (which limitation ought to be acquainted to these working with New Markets Tax Credit beneath Part 45D); or (2) a census tract that’s “not an city space”.
A “low-income group” is a census tract the place (a) the poverty fee is no less than 20 % or (b) (i) if the tract just isn’t positioned in a metropolitan space, the median household earnings for such tract doesn’t exceed 80 % of the relevant statewide median household earnings or (ii) if the tract is positioned in a metropolitan space, the median household earnings for such tract doesn’t exceed 80 % of the relevant statewide or metropolitan space median household earnings.
Part 30C defines an city space as a census tract which, in response to the latest decennial census, has been designated as an city space by the Secretary of Commerce. The Census Bureau publishes the city and rural classifications on its web site, and is scheduled to launch its ultimate city space designations in December 2022 for the 2020 decennial census.
Whereas there are definitely some extra hoops to leap by to qualify your EV charging station for the Part 30C tax credit score, the IRA offered some clarifications on eligibility as nicely that ought to hopefully develop the applicability of the credit score. Amongst them, Part 30C is clearly relevant to bidirectional charging infrastructure that can allow EVs which are plugged in to not solely draw vitality from the grid, however to provide vitality to the grid. Moreover, the renewal of Part 30C preserved the eligibility for EV charging infrastructure put in for (and owned by) a tax-exempt entity. On this case, the corporate that offered the EV charging infrastructure to the relevant tax-exempt entity shall be handled because the taxpayer eligible for the 30C credit score as long as such individual clearly disclosed to the nonprofit entity the quantity of the credit score allowable.
Total, it is going to be good to have the Part 30C credit score again for builders, installers and customers of EV charging stations. This credit score, coupled with the different federal funding being deployed for the nation’s EV charging station buildout, ought to additional incentivize funding in EV charging infrastructure. Importantly, the extension of the Part 30C credit score has the potential to make tax fairness funding in EV charging infrastructure extra obtainable.
Foley is continuous to watch developments within the space of EV charging infrastructure deployment, and is obtainable to assist shoppers put these developments into observe for his or her companies.
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