Demystifying the IRA and Direct-Pay Credits for Tribal Governments

Tax attorneys Kenneth Parsons, Nicole Elliott, Amish Shah and Eli Brander co-authored a Tax Notes article explaining how tribal governments can benefit from the direct pay provisions of the Inflation Reduction Act (IRA) for the development of clean energy infrastructure. The authors note that the IRA provides unprecedented opportunities for tribal governments to leverage tax credits in developing clean energy projects, and the final regulations under Section 6417 provide the guidance needed to fully evaluate how to access these credits. The article examines the five categories of clean energy tax credits available to tribes through direct pay – clean vehicles, clean energy generation, clean fuels, clean energy manufacturing and carbon sequestration – providing a detailed overview of the mechanics of making a direct pay election.

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