§179C Election to Expense Certain Refineries

Summary

You can choose to treat half (50 percent) of the cost of certain new refinery equipment as an immediate business expense instead of spreading it out over many years. That 50 percent is deductible in the year the equipment is first put into service. To use this choice, you must make the election on your tax return for that year in the way the IRS requires, and you generally cannot undo the choice without IRS permission. The rule only applies to refinery property that meets several conditions: its first use starts with you; it goes into service after this law was passed and before January 1, 2014; it met environmental rules when put in service (Clean Air Act waivers don’t count); there was no binding construction contract on or before June 14, 2005; and its construction or service dates fall within rules tied to January 1, 2010. For additions to an existing refinery, the work must either raise daily output (not counting asphalt or lube oil) by at least 5 percent, or let the refinery process shale, tar sands, or certain fuels at 25 percent or more of daily throughput. No deduction is allowed for equipment mainly used for topping, asphalt, lube oil, terminals, or blending, or for work done only to meet a government-ordered project. Special filing and notice rules apply to certain cooperatives, and you must file an IRS report about your refinery operations to claim the deduction.