Tax Reform and Renewable Energy: Planning Techniques, 100% Expensing, BEAT, Tax Credits and Interest Deduction Limitations

Recording of a 90-minute premium CLE webinar with Q&A


Conducted on Wednesday, January 16, 2019

Recorded event now available

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Program Materials

This CLE webinar will provide energy counsel and advisers with a review of the application and impact of the new tax law on the renewable energy sector. The panel will discuss new tax law changes impacting renewable energy and provide planning strategies to optimize tax benefits, credits, deductions and avoid pitfalls.

Description

The new tax law has had a significant impact on the renewable energy sector requiring a careful analysis of its effect on the investments and planning of renewable energy projects. An understanding of key provisions of the new tax law such as the reduction in the corporate tax rate, the limitation on interest deductions, 100% expensing and the imposition of base erosion and anti-abuse tax (BEAT) is critical to properly advising clients engaged in renewable energy projects.

The new tax law forces corporations and partnerships within the renewable energy sector to consider methods to optimize capital structures to achieve the most advantageous tax treatment. The most significant change under the new tax law is the reduction of the maximum corporate tax rate to 21%, which impacts the amount of tax equity that can be raised for renewable energy projects and causes a ripple effect on a companies ability to use tax credits and deductions.

Also, tax equity investors with multi-national operations must evaluate BEAT. For tax equity investors subject to it, BEAT reduces the value of renewable energy tax credits investors can use to offset its tax liability. The BEAT excludes 20% of renewable energy tax credits that otherwise would have been available to offset any BEAT tax owed by multinational tax equity investors.

Renewable energy projects may be eligible for 100% bonus depreciation of qualified property. The new rules eliminate the "original use" provision allowing for the expensing of both new and used property under certain conditions and recent regulations affect the ability of partners to claim 100% bonus depreciation in some cases.

Listen as our panel discusses the effect of the new tax law on renewable energy projects and provides methods to optimize tax benefits, credits, and deductions and avoid pitfalls.

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Outline

  1. Overview of implications of new tax law on renewable energy projects
  2. Corporate tax rate reduction, elimination of AMT, QBI deduction for pass-through entities
  3. Understanding the BEAT
  4. Treatment of renewable energy credits under the new tax law
  5. 100% Expensing of qualified property
  6. Best practices and planning techniques for renewable energy projects post-tax reform

Benefits

The panel will discuss these and other relevant matters:

  • Key provisions of the new tax law impacting renewable energy projects
  • Challenges in renewable energy investments post-tax reform
  • Impact of the reduction in corporate tax rate and elimination of the AMT
  • Implications of BEAT on renewable energy
  • Phase out of each of  the renewable energy investment tax credit (ITC) and energy production tax credit (PTC)
  • Interest expense deduction limitation rules enacted by tax reform
  • Planning techniques for renewable energy projects post-tax reform

Faculty

Burton, David
David K. Burton

Partner
Mayer Brown

Mr. Burton advises clients on a wide range of U.S. tax matters, with a particular emphasis on project finance and...  |  Read More

Katz, Eli
Eli M. Katz

Partner
Latham & Watkins

Mr. Katz has extensive experience assisting clients on a wide range of complex transactions, including those in the...  |  Read More

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