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Title 26 — Internal Revenue CodeRelease 119-73

§179C Election to Expense Certain Refineries

Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter B— Computation of Taxable Income › Part VI— ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS › § 179C

Last updated Apr 6, 2026|Official source

Summary

This break is no longer available for new investments: it applied only to refinery property placed in service before January 1, 2014, generally under construction contracts or construction started before January 1, 2010. While it was open, a taxpayer could elect to deduct 50 percent of the cost of qualified refinery property right away in the year it was placed in service, instead of recovering the cost slowly through depreciation. The property had to be part of a U.S. refinery that processes liquid fuel from crude oil, qualified fuels, shale, or tar sands, be new property whose first use began with the taxpayer, and meet environmental laws. An upgrade to an existing refinery qualified only if it raised daily output by 5 percent or more, or let the refinery process shale, tar sands, or qualified fuels at 25 percent or more of its throughput. Asphalt plants, terminals, blending facilities, and projects built solely to satisfy government mandates were excluded, cooperatives could pass the deduction through to their owners, and claiming it required filing an operations report with the IRS.

Full Legal Text

Title 26, §179C

Internal Revenue Code — Source: USLM XML via OLRC

(a)A taxpayer may elect to treat 50 percent of the cost of any qualified refinery property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the qualified refinery property is placed in service.
(b)(1)An election under this section for any taxable year shall be made on the taxpayer’s return of the tax imposed by this chapter for the taxable year. Such election shall be made in such manner as the Secretary may by regulations prescribe.
(2)Any election made under this section may not be revoked except with the consent of the Secretary.
(c)(1)The term “qualified refinery property” means any portion of a qualified refinery—
(A)the original use of which commences with the taxpayer,
(B)which is placed in service by the taxpayer after the date of the enactment of this section and before January 1, 2014,
(C)in the case any portion of a qualified refinery (other than a qualified refinery which is separate from any existing refinery), which meets the requirements of subsection (e),
(D)which meets all applicable environmental laws in effect on the date such portion was placed in service,
(E)no written binding contract for the construction of which was in effect on or before June 14, 2005, and
(F)(i)the construction of which is subject to a written binding construction contract entered into before January 1, 2010,
(ii)which is placed in service before January 1, 2010, or
(iii)in the case of self-constructed property, the construction of which began after June 14, 2005, and before January 1, 2010.
(2)For purposes of paragraph (1)(A), if property is—
(A)originally placed in service after the date of the enactment of this section by a person, and
(B)sold and leased back by such person within 3 months after the date such property was originally placed in service,
(3)A waiver under the Clean Air Act shall not be taken into account in determining whether the requirements of paragraph (1)(D) are met.
(d)For purposes of this section, the term “qualified refinery” means any refinery located in the United States which is designed to serve the primary purpose of processing liquid fuel from crude oil or qualified fuels (as defined in section 45K(c)), or directly from shale or tar sands.
(e)The requirements of this subsection are met if the portion of the qualified refinery—
(1)enables the existing qualified refinery to increase total volume output (determined without regard to asphalt or lube oil) by 5 percent or more on an average daily basis, or
(2)enables the existing qualified refinery to process shale, tar sands, or qualified fuels (as defined in section 45K(c)) at a rate which is equal to or greater than 25 percent of the total throughput of such qualified refinery on an average daily basis.
(f)No deduction shall be allowed under subsection (a) for any qualified refinery property—
(1)the primary purpose of which is for use as a topping plant, asphalt plant, lube oil facility, crude or product terminal, or blending facility, or
(2)which is built solely to comply with consent decrees or projects mandated by Federal, State, or local governments.
(g)(1)If—
(A)a taxpayer to which subsection (a) applies is an organization to which part I of subchapter T applies, and
(B)one or more persons directly holding an ownership interest in the taxpayer are organizations to which part I of subchapter T apply,
(2)An election under paragraph (1) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year.
(3)If any portion of the deduction available under subsection (a) is allocated to owners under paragraph (1), the cooperative shall provide any owner receiving an allocation written notice of the amount of the allocation. Such notice shall be provided before the date on which the return described in paragraph (2) is due.
(h)No deduction shall be allowed under subsection (a) to any taxpayer for any taxable year unless such taxpayer files with the Secretary a report containing such information with respect to the operation of the refineries of the taxpayer as the Secretary shall require.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

The date of the enactment of this section, referred to in subsec. (c)(1)(B), (2)(A), is the date of enactment of Pub. L. 109–58, which was approved Aug. 8, 2005. The Clean Air Act, referred to in subsec. (c)(3), is act July 14, 1955, ch. 360, 69 Stat. 322, which is classified generally to chapter 85 (§ 7401 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see

Short Title

note set out under section 7401 of Title 42 and Tables.

Amendments

2008—Subsec. (c)(1)(B). Pub. L. 110–343, § 209(a)(1), substituted “
January 1, 2014” for “
January 1, 2012”. Subsec. (c)(1)(F). Pub. L. 110–343, § 209(a)(2), substituted “
January 1, 2010” for “
January 1, 2008” wherever appearing. Subsec. (d). Pub. L. 110–343, § 209(b)(1), inserted “, or directly from shale or tar sands” after “(as defined in section 45K(c))”. Subsec. (e)(2). Pub. L. 110–343, § 209(b)(2), inserted “shale, tar sands, or” before “qualified fuels”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2008 Amendment Pub. L. 110–343, div. B, title II, § 209(c), Oct. 3, 2008, 122 Stat. 3840, provided that: “The

Amendments

made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [Oct. 3, 2008].”

Effective Date

Pub. L. 109–58, title XIII, § 1323(c), Aug. 8, 2005, 119 Stat. 1015, provided that: “The

Amendments

made by this section [enacting this section and amending section 263, 312, and 1245 of this title] shall apply to properties placed in service after the date of the enactment of this Act [Aug. 8, 2005].”

Reference

Citations & Metadata

Citation

26 U.S.C. § 179C

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73