Notice 2023-9, “Section 45W Commercial Clean Vehicles and Incremental Cost for 2023”

Concurrent with the white paper and Notice 2023-1, discussed in a separate blog, on December 29, 2022, the IRS released Notice 2023-9, which provides a safe harbor for determining the incremental cost of qualified commercial clean vehicles for the section 45W credit.

The amount of the commercial clean vehicle credit under section 45W is the lesser of (1) 30 percent of the taxpayer’s basis in a vehicle if the vehicle is not powered by a gasoline or diesel internal combustion engine (or else 15 percent) or (2) the incremental cost of the vehicle. In addition, the section 45W credit is subject to a cap of either $7,500 (for vehicles with a gross vehicle weight rating (GVWR) of less than 14,000 pounds) or $40,000 (for vehicles with a GVWR of 14,000 pounds or more).

For compact car PHEVs and vehicles with a GVWR of 14,000 pounds or more, a taxpayer may use on the incremental cost published in the DOE Analysis in http://www.energy.gov/node/4825009/. For all other street vehicles with a GVWR of less than 14,000 pounds, a taxpayer may use $7,500 as the incremental cost.

Photo of Jamin Koo Jamin Koo

Jamin Koo advises clients across a broad range of tax issues, including international and domestic tax planning and acquisition and financing transactions. He works with numerous U.S. and non-U.S. clients (in particular, several Asia-based clients) on cross-border investments, joint ventures, and restructurings. His…

Jamin Koo advises clients across a broad range of tax issues, including international and domestic tax planning and acquisition and financing transactions. He works with numerous U.S. and non-U.S. clients (in particular, several Asia-based clients) on cross-border investments, joint ventures, and restructurings. His expertise includes taxation of debt instruments, derivatives, and other financial instruments, and he has been providing tax advice related to digital assets to a number of clients.

Most recently, with his background in engineering and environmental science, Jamin has been advising clients in a number of industries on various issues involving tax credits and other tax provisions of the Chips & Science Act and the Inflation Reduction Act and drafting comments to Treasury and the IRS.

Photo of Daniel B. Levine Daniel B. Levine

Daniel B. Levine is of counsel in the firm’s Shanghai office.  He advises Chinese and non-Chinese companies in complex outbound and inbound direct investment transactions.  Formerly resident in the firm’s New York office, Mr. Levine has extensive experience with both China-based and non-China-based…

Daniel B. Levine is of counsel in the firm’s Shanghai office.  He advises Chinese and non-Chinese companies in complex outbound and inbound direct investment transactions.  Formerly resident in the firm’s New York office, Mr. Levine has extensive experience with both China-based and non-China-based public and private mergers and acquisitions, venture capital investments, joint ventures, leveraged buy-outs, going-private transactions, and other transactional matters.  He frequently speaks and writes on trends in Chinese outbound direct investment and strategies for approaching destination country legal and regulatory challenges, including national security reviews in the United States by the Committee on Foreign Investment in the United States (CFIUS).

He has advised clients in a wide range of industries, including life sciences, technology, cleantech, telecom, heath care, building materials, building services, real estate and asset management.

Photo of W. Andrew Jack W. Andrew Jack

Andrew Jack has a diverse corporate and securities practice with clients principally in the energy, industrial manufacturing, technology and sports and entertainment industries. He regularly represents corporations, board committees, and other forms of enterprises in mergers and acquisitions, strategic alliances, financing activities, securities…

Andrew Jack has a diverse corporate and securities practice with clients principally in the energy, industrial manufacturing, technology and sports and entertainment industries. He regularly represents corporations, board committees, and other forms of enterprises in mergers and acquisitions, strategic alliances, financing activities, securities law compliance, corporate governance counseling, and executive compensation arrangements. Mr. Jack also co-chairs the firm’s Energy Industry Group.