What This Bill Does
This bill changes the tax credit (a reduction in taxes owed) that businesses receive when they capture carbon oxide and use it. The bill increases the dollar amounts that qualify for this credit under federal tax law.
Who It Affects
Businesses or individuals that capture carbon oxide and use it in specific ways would be affected by this bill.
Key Provisions
• Businesses that capture carbon oxide and use it in one specific manner receive a tax credit of $12 per unit of qualified carbon oxide, instead of a different amount. (Sec. 2(a)(1))
• Businesses that capture carbon oxide and utilize it in a second specific manner receive a tax credit of $17 per unit of qualified carbon oxide, instead of a different amount. (Sec. 2(a)(1))
• The $12 and $17 amounts increase each year based on inflation (the rising cost of goods and services), with adjustments calculated using the year 2025 as the starting point instead of 1990. (Sec. 2(a)(2))
What Changes
The credit amounts that qualify for carbon oxide captured and used increase from their current levels to $12 and $17 per unit, depending on how the carbon oxide is used. These new amounts will adjust for inflation each year going forward.
Important Definitions
"Qualified carbon oxide" is mentioned but not defined in this bill text.
Effective Date
Carbon oxide captured and utilized after December 31, 2023. (Sec. 2(b))
II
118TH CONGRESS
1ST SESSION
S. 542
To amend the Internal Revenue Code of 1986 to increase the applicable
dollar amount for qualified carbon oxide which is captured and utilized
for purposes of the carbon oxide sequestration credit.
IN THE SENATE OF THE UNITED STATES
FEBRUARY 28, 2023
Mr. WHITEHOUSE (for himself and Mr. CASSIDY) introduced the following bill;
which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to increase
the applicable dollar amount for qualified carbon oxide
which is captured and utilized for purposes of the carbon
oxide sequestration credit.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘CCU Parity Act of
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2023’’.
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•S 542 IS
SEC. 2. INCREASE APPLICABLE DOLLAR AMOUNT FOR
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QUALIFIED CARBON OXIDE WHICH IS CAP-
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TURED AND UTILIZED.
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(a) IN GENERAL.—Section 45Q(b)(1)(A) of the In-
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ternal Revenue Code of 1986 is amended—
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(1) in clause (i), by striking subclause (II) and
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inserting the following:
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‘‘(II) for purposes of paragraph
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(4) of such subsection—
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‘‘(aa) with respect to any
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qualified carbon oxide which is
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captured and used in the manner
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described in clause (i) of para-
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graph (4)(B) of such subsection,
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$12, and
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‘‘(bb) with respect to any
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qualified carbon oxide which is
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captured and utilized in the man-
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ner described in clause (ii) of
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paragraph (4)(B) of such sub-
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section, $17, and’’, and
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(2) in clause (ii), by striking subclause (II) and
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inserting the following:
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‘‘(II) for purposes of paragraph
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(4) of such subsection—
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•S 542 IS
‘‘(aa) with respect to any
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qualified carbon oxide which is
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captured and used in the manner
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described in clause (i) of para-
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graph (4)(B) of such subsection,
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an amount equal to the product
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of $12 and the inflation adjust-
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ment factor for such calendar
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year determined under section
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43(b)(3)(B) for such calendar
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year, determined by substituting
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‘2025’ for ‘1990’, and
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‘‘(bb) with respect to any
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qualified carbon oxide which is
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captured and utilized in the man-
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ner described in clause (ii) of
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paragraph (4)(B) of such sub-
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section, an amount equal to the
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product of $17 and the inflation
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adjustment factor for such cal-
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endar year determined under sec-
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tion 43(b)(3)(B) for such cal-
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endar year, determined by sub-
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stituting ‘2025’ for ‘1990’.’’.
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•S 542 IS
(b) EFFECTIVE DATE.—The amendments made by
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this section shall apply to carbon oxide captured and uti-
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lized after December 31, 2023.
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Æ
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