Share with your friends

D.C. Circuit: Credit under expired section 45K, landfill gas

D.C. Circuit: Credit under expired section 45K

The U.S. Court of Appeals for the District of Columbia Circuit today affirmed a decision of the U.S. Tax Court that had upheld the IRS’s disallowance of credits under then-applicable section 45K relating to certain landfill gas operations.


Related content

The section 45K credit provisions expired in 2007.

The case is: Green Gas Delaware Statutory Trust v. Commissioner, No. 17-1025 (D.C. Cir. August 14, 2016). Read the D.C. Circuit’s decision [PDF 107 KB]


Between 2005 and 2007, the taxpayer trusts claimed $11.7 million in section 45K credits for selling landfill gas. The IRS disallowed all but $586,000 of the section 45K credits. Specifically the IRS excluded all claimed credits from venting / flaring landfills and credits for landfill gas vented or flared from gas-to-electricity landfills when the gas-to-electricity equipment was non-operational. The Tax Court upheld the IRS determinations. The Tax Court concluded that:

  • Untreated landfill gas is “qualified fuel” under section 45K (which had expired in 2007).
  • In the landfill gas industry, to qualify as a “facility for producing qualified fuels” under section 45K(f)(1), a system of wells, pipes, blowers, and equipment for pretreatment and measuring the production of gas—if necessary—must be connected either to a gas-to-energy system or to a system that allows for storage and treatment of landfill gas before it is routed to gas pipelines or otherwise prepared for delivery to a customer.
  • For a landfill gas production facility, the “placed in service” date under section 45K is the date when a gas-to-energy system becomes available for its specific function on a regular basis—not the date when the first well is drilled.

The trusts appealed, and the D.C. Circuit today affirmed the Tax Court’s decision.

© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal