Solid waste remains a debate topic.
Witnesses at an IRS hearing in early August criticized the tax agency for a proposal it made in May to change how “solid waste” is defined for tax purposes. Power plants that use “solid waste” as fuel qualify potentially for tax-exempt financing. “Solid waste” is defined currently as any material that has no value in the place where it is located. The IRS is proposing a different test in the future. Material would be waste only if it has been discarded. In addition, fossil fuels — like gob and culm — would never qualify as waste.
The witnesses also criticized another proposal. A plant qualifies potentially for tax-exempt financing as a “solid waste disposal facility” currently if at least 65% of the material going into the plant is waste. The IRS is proposing to increase the percentage to 80%.
Witnesses urged the IRS not to tinker with rules with which industry has been living for “20 or 30 years.” The IRS held the hearing to collect comments on its proposals.