Working Paper: NBER ID: w14110
Authors: Curtis Carlson; Gilbert E. Metcalf
Abstract: We take a first look at limitations on the use of energy-related tax credits contained in the General Business Credit (GBC) due to limitations within the regular corporate income tax as well as the AMT. Between 2000 and 2005, firms were unable to use all energy-related tax credits due to GBC limitations in the regular tax. The AMT has a smaller but still pronounced impact on the ability of firms to use these credits. Finally, we provide some illustrative calculations to demonstrate how the AMT can lead to very different levelized costs of producing electricity from a wind power project.
Keywords: Energy Tax Incentives; Alternative Minimum Tax; Corporate Tax; Renewable Energy
JEL Codes: H20; H23; Q48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Limitations in the regular corporate income tax (K34) | corporations' ability to take energy-related tax credits (G38) |
| AMT (Y20) | utilization of energy-related tax credits (Q48) |
| AMT (Y20) | deferral of tax benefits (H20) |
| AMT (Y20) | uncertainty in investment decisions (D80) |
| AMT status (Y20) | levelized costs for electricity generation from wind projects (L94) |
| AMT status duration (C41) | project costs (O22) |
| AMT calculations (C88) | firms' tax liabilities (H32) |