26 USC 48D - Advanced manufacturing investment credit

U.S Code last checked for updates: May 05, 2024

§ 48D.

Advanced manufacturing investment credit

(a)

Establishment of credit

(b)

Qualified investment

(1)

In general

(2)

Qualified property

(A)

In general

For purposes of this subsection, the term “qualified property” means property—

(i)

which is tangible property,

(ii)

with respect to which depreciation (or amortization in lieu of depreciation) is allowable,

(iii)

which is—

(I)

constructed, reconstructed, or erected by the taxpayer, or

(II)

acquired by the taxpayer if the original use of such property commences with the taxpayer, and

(iv)

which is integral to the operation of the advanced manufacturing facility.

(B)

Buildings and structural components

(i)

In general

(ii)

Exception

(3)

Advanced manufacturing facility

(4)

Coordination with rehabilitation credit

(5)

Certain progress expenditure rules made applicable

(c)

Eligible taxpayer

For purposes of this section, the term “eligible taxpayer” means any taxpayer which—

(1)

is not a foreign entity of concern (as defined in section 9901(6) 1

 See References in Text note below.

of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021), and

(2)

has not made an applicable transaction (as defined in section 50(a)) during the taxable year.

(d)

Elective payment

(1)

In general

(2)

Special rules

For purposes of this subsection—

(A)

Application to partnerships and s corporations

(i)

In general

In the case of the credit determined under subsection (a) with respect to any property held directly by a partnership or S corporation, any election under paragraph (1) shall be made by such partnership or S corporation. If such partnership or S corporation makes an election under such paragraph (in such manner as the Secretary may provide) with respect to such credit—

(I)

the Secretary shall make a payment to such partnership or S corporation equal to the amount of such credit,

(II)

paragraph (3) shall be applied with respect to such credit before determining any partner’s distributive share, or shareholder’s pro rata share, of such credit,

(III)

any amount with respect to which the election in paragraph (1) is made shall be treated as tax exempt income for purposes of sections 705 and 1366, and

(IV)

a partner’s distributive share of such tax exempt income shall be based on such partner’s distributive share of the otherwise applicable credit for each taxable year.

(ii)

Coordination with application at partner or shareholder level

(B)

Elections

(C)

Timing

(D)

Treatment of payments to partnerships and s corporations

(E)

Additional information

(F)

Excessive payment

(i)

In general

In the case of any amount treated as a payment which is made by the taxpayer under paragraph (1), or any payment made pursuant to subparagraph (A), which the Secretary determines constitutes an excessive payment, the tax imposed on such taxpayer by chapter 1 for the taxable year in which such determination is made shall be increased by an amount equal to the sum of—

(I)

the amount of such excessive payment, plus

(II)

an amount equal to 20 percent of such excessive payment.

(ii)

Reasonable cause

(iii)

Excessive payment defined

For purposes of this subparagraph, the term “excessive payment” means, with respect to property for which an election is made under this subsection for any taxable year, an amount equal to the excess of—

(I)

the amount treated as a payment which is made by the taxpayer under paragraph (1), or the amount of the payment made pursuant to subparagraph (A), with respect to such property for such taxable year, over

(II)

the amount of the credit which, without application of this subsection, would be otherwise allowable (determined without regard to section 38(c)) under subsection (a) with respect to such property for such taxable year.

(3)

Denial of double benefit

(4)

Mirror code possessions

(5)

Basis reduction and recapture

Rules similar to the rules of subsections (a) and (c) of section 50 shall apply with respect to—

(A)

any amount treated as a payment which is made by the taxpayer under paragraph (1), and

(B)

any payment made pursuant to paragraph (2)(A).

(6)

Regulations

The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this subsection, including—

(A)

regulations or other guidance providing rules for determining a partner’s distributive share of the tax exempt income described in paragraph (2)(A)(i)(III), and

(B)

guidance to ensure that the amount of the payment or deemed payment made under this subsection is commensurate with the amount of the credit that would be otherwise allowable (determined without regard to section 38(c)).

(e)

Termination of credit

(Added Pub. L. 117–167, div. A, § 107(a), Aug. 9, 2022, 136 Stat. 1393.)

cite as: 26 USC 48D