Taxpayers have anxiously been awaiting clarity on energy community status based on the 2022 unemployment rates to establish location in an energy community through metropolitan statistical area (“MSA”) or non-metropolitan statistical area (“non-MSA”). It has arrived!
On June 15, 2023, the Department of Treasury (the “Treasury”) and Internal Revenue Service (the “IRS”) posted updates in Notice 2023-47 (the “Notice”) that list the qualifying counties in the Statistical Area Category for energy community qualification. Please see our prior alert here for energy communities that sets forth all categories for qualification as published by the Treasury and IRS earlier this year in Notice 2023-29.
As described in our prior alert on the topic, a project or facility is located in an energy community, and may be eligible for an increased tax credit, if it satisfies one of three qualification tests. The Notice does not provide additional information regarding the brownfield site category; however, the Treasury and IRS relatedly also published Notice 2023-45 on June 15, 2023 that requires qualifying energy projects less than 5 MWs to have a Phase 1 Environmental Site Assessment identifying the presence (or potential presence) of a hazardous substance, pollutant or contaminant to qualify within the brownfield site safe harbor set forth in Notice 2023-29.
The energy community webpage here has also been updated to reflect the publication of the unemployment data and to provide updated Annexes listing MSAs / non-MSAs that meet the fossil fuel employment threshold and the unemployment rate requirement for calendar year 2022 and to provide an updated list of tracts that would qualify for the coal closure category.
