- 14 -
December 31, 1985, that sufficiently described most of the
property upon which ITC was claimed.
In United States v. Commonwealth Energy Sys., 49 F. Supp. 2d
57 (D. Mass. 1999), after December 31, 1985, the taxpayer
installed new power generating equipment in its power plant. The
taxpayer claimed that the new equipment was necessary to carry
out specific power supply contracts that had been entered into
before December 31, 1985. Language of the contracts indicated
the type of power generating equipment to be installed in terms
of primary energy source and total generating power. The
contracts specifically stated that the taxpayer agreed and was
bound under the contracts “to cause to be built a new
conventional steam plant * * * of an expected net economic
capability of approximately 560 megawatts”. Id. at 59. The
Federal District Court for the District of Massachusetts
concluded that despite the absence in the contracts of explicit
language describing the precise equipment to be installed, the
new generating equipment that was to be installed was readily
identifiable with the contracts and was plainly required to
fulfill the specific additional power commitments that were
explicitly set forth in the contracts.
The District Court in Commonwealth Energy Sys., however, did
not allow ITC for all of the costs associated with the new power
generating equipment. The court disallowed ITC for costs of
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011