IRS Seeking Comments On Sequestration Credit

The IRS requested comments on February 12 on Notice 2009-83 that provides guidance on determining eligibility for, and the amount of, the section 45Q carbon dioxide sequestration credit.  Section 45Q was enacted as part of the Energy Improvement and Extension Act of 2008 and provides that a credit for CO2 sequestration is generally available to a taxpayer that captures qualified CO2 at a qualified facility and disposes of the CO2 in secure geological storage within the United States. The credit is equal to $20 per metric ton of qualified CO2 that is captured and disposed of in secure geological storage and must not be used as a tertiary injectant.  If it is used as tertiary injectant, an alternative $10 credit of $10 per metric ton of qualified CO2 that is captured is available if the qualified CO2 is disposed of in secure geological storage.  One issue practitioners have struggled with is the definition of "industrial facility" in the Notice.