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§ 179B. Deduction for capital costs incurred in complying with Environmental Protection Agency sulfur regulations
(a)
Allowance of deduction
In the case of a small business refiner (as defined in section
45H
(c)(1)) which elects the application of this section, there shall be allowed as a deduction an amount equal to 75 percent of qualified capital costs (as defined in section
45H
(c)(2)) which are paid or incurred by the taxpayer during the taxable year.
(b)
Reduced percentage
In the case of a small business refiner with average daily domestic refinery runs for the 1-year period ending on December 31, 2002, in excess of 155,000 barrels, the number of percentage points described in subsection (a) shall be reduced (not below zero) by the product of such number (before the application of this subsection) and the ratio of such excess to 50,000 barrels.
(c)
Basis reduction
(d)
Coordination with other provisions
Section
280B shall not apply to amounts which are treated as expenses under this section.
(e)
Election to allocate deduction to cooperative owner
(1)
In general
If—
(A)
a small business refiner 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 refiner are organizations to which part I of subchapter T apply,
the refiner 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 refiner 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.
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