OAR 150-315-0146: Pollution Control Facilities: To Whom Is Credit Allowable

(1) With the exception of a facility used for resource recovery certified on or after November 1, 1981, and pulp, paper and paperboard facilities discussed in paragraph (2), the credit is allowable only to the taxpayer who owns or conducts the trade or business which utilizes the facility. Therefore, if the owner of the facility also carries on the trade or business which uses the facility, such owner is entitled to the credit. But if the owner of the facility leases the property to someone who carries on a trade or business using the leased property, then the lessee is the one entitled to the credit during the period of the lease agreement. (2) If an application for certification of a pulp, paper or paperboard facility is filed with the Department of Environmental Quality on or after January 1, 1999, the credit may be claimed by the facility’s owner/lessor, including a contract purchaser, or lessee. The owner need not operate the facility or conduct the trade or business that utilizes the property to qualify for the credit. (3)(a) For a resource recovery facility certified on or after November 1, 1981, and prior to September 27, 1987, the credit is allowable to taxpayers who own, lease, or have a beneficial interest in the facility. “Beneficial interest” refers to the right to receive a profit, benefit, or other advantage from the facility. That right must be conveyed by a contract or other written document. A capital investment is required. Beneficial interest includes but is not limited to a partner’s interest in a partnership owning part or all of the facility, or a contract purchaser’s interest in a facility. If more than one taxpayer has an interest in the facility, the cost may be allocated between them. It is not necessary that the cost be allocated according to percentage of interest. The total costs allocated cannot exceed the total certified cost. (b) For a resource recovery facility certified on or after September 27, 1987, the credit is allowable only to the taxpayer who owns, or leases the facility. An allocation of the costs is not allowed for these facilities. (c) For purposes of (a) and (b), it is not necessary that the taxpayer receiving the credit operate or use the facility in the business. (d) The taxpayer to whom the certificate is issued must file a written statement with the Department of Revenue not later than the final day of the first tax year for which a tax credit is claimed. For resource recovery facilities certified prior to September 27, 1987, the statement must designate the persons to whom the certified costs have been allocated and the cost allocated to each. For resource recovery facilities certified on or after September 27, 1987, the statement filed with the Department of Revenue must designate the taxpayer claiming the credit.