- 183 -
974 F.2d at 435-436; Haw. Indep. Refinery, Inc. v. Commissioner,
697 F.2d at 1069.
We find that petitioner failed to incur or commit $1 million
or 5 percent of the construction costs for the instrument air
system upgrade as of December 31, 1985. In the fall of 1985, ER
9009 was approved for the instrument air upgrade at St. Lucie
Unit 1 of $692,000. However, this ER indicates that petitioner
only received authorization to incur $692,000 to upgrade the
instrument air system. TRA section 203(b)(1)(B) demands that a
taxpayer actually incur the expenses to construct its property,
or that a taxpayer commit to such construction costs in the
future. Here, petitioner simply received authorization to expend
funds of the construction for the instrument air upgrade;
petitioner did not become liable for the instrument air system
upgrade costs when it received this authorization.
Petitioner began construction of the instrument air upgrade
at St. Lucie Unit 1 on October 16, 1985. Construction of the
instrument air upgrade at St. Lucie Unit 2 began on May 12, 1986.
While petitioner has satisfied the construction date requirement
with respect to St. Lucie Unit 1, it failed to begin construction
of St. Lucie Unit 2 as of December 31, 1985.
Accordingly, we hold that petitioner is not entitled to an
ITC for the instrument air system upgrade because it failed to
incur or commit $1 million or 5 percent of the construction costs
Page: Previous 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 NextLast modified: May 25, 2011