IRS Notice 2013-60: Beginning Construction - Continuous Construction, Continuous Efforts, Master Contracts And Transfers Clarified

On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the "Act")¹ which, among other things, extended the 2.3 cent-per-kilowatthour production tax credit (the "PTC")² and the 30% investment tax credit (the "ITC")³ to qualifying wind and other renewable energy facilities (excluding solar, for which the ITC is available for systems placed in service prior to January 1, 2017) the construction of which begins before January 1, 2014.⁴

On April 15, 2013, the Internal Revenue Service (the "IRS") published Notice 2013-29, providing guidance on what it means to "begin construction" under the Act.⁵ (A copy of Notice 2013-29 can be found here.) Under Notice 2013-29, there are two alternative methods by which a taxpayer can demonstrate that construction has begun before January 1, 2014: (1) by beginning physical work of a significant nature before January 1, 2014 (the "physical work test") or (2) by paying or incurring at least 5% of the