Norstam Veneers, Inc. A Kentucky Corporation - Page 7

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            terminated on September 20, 1991, upon expiration of the second                            
            extension.                                                                                 
                                               OPINION                                                 
                  Section 29(a) allows a tax credit for qualified fuels                                
            produced by a taxpayer and sold to an unrelated person.                                    
            Section 29 includes "biomass" within its definition of "qualified                          
            fuels".  For petitioner's 1989 and 1990 tax years, biomass was                             
            defined as "any organic material which is an alternate substance                           
            (as defined in section 48(l)(3)(B)) other than coal (including                             
            lignite) or any product of such coal."  Sec. 29(c)(3).  For                                
            petitioner's 1991 tax year, biomass was defined as "any organic                            
            material other than (A) oil and natural gas (or any product                                
            thereof), and (B) coal (including lignite) or any product                                  
            thereof."  Sec. 29(c)(3).                                                                  
                  Petitioner bears the burden of proving its entitlement to                            
            the credits.  See Rule 142(a); New Colonial Ice Co. v. Helvering,                          
            292 U.S. 435, 400 (1934).  For the reasons discussed below, we                             
            conclude that petitioner did not sell its qualified fuel and thus                          
            is not entitled to the credits.                                                            
                  Petitioner contends that WTC leased "Area B" from petitioner                         
            and that petitioner provided utilities to WTC as part of the                               
            lease.  Accordingly, petitioner contends that it "sold" biomass                            
            to WTC, because petitioner "took on the role of a Utility                                  
            Company".  Petitioner bases its contention on paragraph 10 of the                          
            Agreement, which stated that WTC was to make a monthly payment of                          




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