Indian coal production: Inflation adjustment factor | KPMG | GLOBAL

Indian coal production: 2015 inflation adjustment factor, credit amount

Indian coal production: Inflation adjustment factor

The Treasury Department and IRS today released for publication in the Federal Register a notice providing the 2015 inflation adjustment factor for Indian coal production under section 45.


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Provisions in the year-end tax legislation (enacted December 18, 2015) extended the production credit for Indian coal facilities for two years (through December 31, 2016), but with modifications removing the placed-in-service date limitation (thus permitting facilities placed in service after December 31, 2008, to qualify), changing the third-party sale requirement to permit related-party sales to qualify so long as the Indian coal is subsequently sold to an unrelated third person, and exempting the credit from the alternative minimum tax (AMT).

The extension of the credit is effective for Indian coal produced after December 31, 2014.  The removal of the placed-in-service limitation and the modification to the third-party sale requirement are effective for coal produced and sold after December 31, 2015. The provision exempting the credit from the AMT is effective for credits determined for tax years beginning after December 31, 2015.

Inflation adjustment factor, credit amount

Today’s notice [PDF 169 KB] provides:

  • The inflation adjustment factor for calendar year 2015 for Indian coal is 1.1772.
  • The credit amount, under section 45(e)(10)(B)(i), for Indian coal production for calendar year 2015 is $2.354 per ton on the sale of Indian coal.

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