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Comments in Response to Notice of Proposed Rulemaking REG 112339-19 Regarding Section 45Q Credit for Carbon Oxide Sequestration

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Baker Botts submitted comments to the Treasury Department and IRS on August 3, 2020 with respect to proposed regulations implementing section 45Q, the tax credit for carbon capture and sequestration. The comments raised definitional and procedural points and included suggestions for clarification with respect to issues such as the determination of binding contracts for disposal of captured carbon, qualifying for the credit pursuant to utilization of captured carbon and preparation of the associated requisite lifecycle analysis of greenhouse gases (the “LCA”), electing to transfer the credit to another taxpayer,  electing in to the post-BBA credit amounts and recapture of the tax credit.

Preparation of the comments was a joint effort by a team of Baker Botts tax, environmental and energy projects lawyers, including Barbara S. de Marigny, Aileen Hooks, Tom Holmberg, Michael Bresson, Jared Meier, Jon Nelsen and Matt Donnelly.

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