Thompson Coburn has expanded its tax credits practice with a focus on renewable energy tax credits, in light of new tax incentives provided through the Inflation Reduction Act of 2022 (“IRA”). The IRA made possible new ways for taxpayers to finance renewable energy development and reduce their tax liabilities. The practice helps clients make the best use of energy tax credit transfers by navigating the options available and represents buyers, sellers, and broker-dealers in tax credit transactions.
In addition, the team assists taxpayers in understanding and applying for qualifying advanced energy project credits and broker-dealers in connection with their marketing platforms, as well as sellers and buyers in the sale of investment and production tax credits.
Partners Nick Kappas and Mariquita Barbieri were quoted in a recent CFO Dive article on changes in clean energy and tax strategy. Renewable energy developers have always needed creative ways to monetize the tax benefits associated with renewable energy projects, and tax equity deals can be complicated due to partnership structures. “Renewable energy projects carry various risks, require knowledge of complex tax rules, and an investor commitment for the duration of the relevant recapture period,” Kappas said.
Barbieri commented on the Inflation Reduction Act allowing ITCs generated by renewable energy projects to be sold without any complicated partnership structures. “Properly structured, an ITC transfer can be a much simpler transaction than a tax equity partnership and therefore less costly,” she said. “Many smaller projects that couldn’t afford the legal overhead of a tax equity deal may find ITC transfers attractive.”
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