Code of Federal Regulations · Section

§ 1.45X-4 — x-4 Applicable Critical Minerals

26 C.F.R. § 1.45X-4

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(a) In general. The term applicable critical mineral means any of the minerals that are listed in section 45X(c)(6) and defined in paragraph (b) of this section.

(b) Definitions. The following definitions apply for the purpose of this section—

(1) [Reserved]

(2) Antimony. The term antimony means antimony that is—

(i) Converted to antimony trisulfide concentrate with a minimum purity of 90 percent antimony trisulfide by mass; or

(ii) Purified to a minimum purity of 99.65 percent antimony by mass.

(3) Barite. The term barite means barite that is barium sulfate purified to a minimum purity of 80 percent barite by mass.

(4) Beryllium. The term beryllium means beryllium that is—

(i) Converted to copper-beryllium master alloy; or

(ii) Purified to a minimum purity of 99 percent beryllium by mass.

(5) Cerium. The term cerium means cerium that is—

(i) Converted to cerium oxide that is purified to a minimum purity of 99.9 percent cerium oxide by mass; or

(ii) Purified to a minimum purity of 99 percent cerium by mass.

(6) Cesium. The term cesium means cesium that is—

(i) Converted to cesium formate or cesium carbonate; or

(ii) Purified to a minimum purity of 99 percent cesium by mass.

(7) Chromium. The term chromium means chromium that is—

(i) Converted to ferrochromium consisting of not less than 60 percent chromium by mass; or

(ii) Purified to a minimum purity of 99 percent chromium by mass.

(8) Cobalt. The term cobalt means cobalt that is—

(i) Converted to cobalt sulfate; or

(ii) Purified to a minimum purity of 99.6 percent cobalt by mass.

(9) Dysprosium. The term dysprosium means dysprosium that is—

(i) Converted to not less than 99 percent pure dysprosium iron alloy by mass; or

(ii) Purified to a minimum purity of 99 percent dysprosium by mass.

(10) Europium. The term europium means europium that is—

(i) Converted to europium oxide that is purified to a minimum purity of 99.9 percent europium oxide by mass; or

(ii) Purified to a minimum purity of 99 percent of europium by mass.

(11) Fluorspar. The term fluorspar means fluorspar that is—

(i) Converted to fluorspar that is purified to a minimum purity of 97 percent calcium fluoride by mass; or

(ii) Purified to a minimum purity of 99 percent fluorspar by mass.

(12) Gadolinium. The term gadolinium means gadolinium that is—

(i) Converted to gadolinium oxide that is purified to a minimum purity of 99.9 percent gadolinium oxide by mass; or

(ii) Purified to a minimum purity of 99 percent gadolinium by mass.

(13) Germanium. The term germanium means germanium that is—

(i) Converted to germanium tetrachloride; or

(ii) Purified to a minimum purity of 99.99 percent germanium by mass.

(14) Graphite. The term graphite means natural or synthetic graphite that is purified to a minimum purity of 99.9 percent graphitic carbon by mass. The term 99.9 percent graphitic carbon by mass means graphite that is 99.9 percent carbon by mass.

(15) Indium. The term indium means indium that is—

(i) Converted to—

(A) Indium tin oxide; or

(B) Indium oxide that is purified to a minimum purity of 99.9 percent indium oxide by mass; or

(ii) Purified to a minimum purity of 99 percent indium by mass.

(16) Lithium. The term lithium means lithium that is—

(i) Converted to lithium carbonate or lithium hydroxide; or

(ii) Purified to a minimum purity of 99.9 percent lithium by mass.

(17) Manganese. The term manganese means manganese that is—

(i) Converted to manganese sulphate; or

(ii) Purified to a minimum purity of 99.7 percent manganese by mass.

(18) Neodymium. The term neodymium means neodymium that is—

(i) Converted to neodymium-praseodymium oxide that is purified to a minimum purity of 99 percent neodymium-praseodymium oxide by mass;

(ii) Converted to neodymium oxide that is purified to a minimum purity of 99.5 percent neodymium oxide by mass; or

(iii) Purified to a minimum purity of 99.9 percent neodymium by mass.

(19) Nickel. The term nickel means nickel that is—

(i) Converted to nickel sulphate; or

(ii) Purified to a minimum purity of 99 percent nickel by mass.

(20) Niobium. The term niobium means niobium that is—

(i) Converted to ferronibium; or

(ii) Purified to a minimum purity of 99 percent niobium by mass.

(21) Tellurium. The term tellurium means tellurium that is—

(i) Converted to cadmium telluride; or

(ii) Purified to a minimum purity of 99 percent tellurium by mass.

(22) Tin. The term tin means tin that purified to low alpha emitting tin that—

(i) Has a purity of greater than 99.99 percent by mass; and

(ii) Possesses an alpha emission rate of not greater than 0.01 counts per hour per centimeter square.

(23) Tungsten. The term tungsten means tungsten that is converted to ammonium paratungstate or ferrotungsten.

(24) Vanadium. The term vanadium means vanadium that is converted to ferrovanadium or vanadium pentoxide.

(25) Yttrium. The term yttrium means yttrium that is—

(i) Converted to yttrium oxide that is purified to a minimum purity of 99.999 percent yttrium oxide by mass; or

(ii) Purified to a minimum purity of 99.9 percent yttrium by mass.

(26) Other minerals. The following minerals are also applicable critical minerals provided that such mineral is purified to a minimum purity of 99 percent by mass:

(i) Arsenic.

(ii) Bismuth.

(iii) Erbium.

(iv) Gallium.

(v) Hafnium.

(vi) Holmium.

(vii) Iridium.

(viii) Lanthanum.

(ix) Lutetium.

(x) Magnesium.

(xi) Palladium.

(xii) Platinum.

(xiii) Praseodymium.

(xiv) Rhodium.

(xv) Rubidium.

(xvi) Ruthemium.

(xvii) Samarium.

(xviii) Scandium.

(xix) Tantalum.

(xx) Terbium.

(xxi) Thulium.

(xxii) Titanium.

(xxiii) Ytterbium.

(xxiv) Zinc.

(xxv) Zirconium.

(c) Credit amount—(1) In general. For any applicable critical mineral, the credit amount is equal to 10 percent of the costs incurred by the taxpayer with respect to production of such mineral.

(2) Production processes for applicable critical minerals—(i) Conversion. For purposes of section 45X, the term conversion means a chemical transformation from one species to another.

(ii) Purification. For purposes of section 45X, the term purification means increasing the mass fraction of a certain element.

(3) Production costs incurred—(i) In general. Costs incurred by the taxpayer with respect to the production of applicable critical minerals includes all costs as defined in § 1.263A-1(e) that are paid or incurred within the meaning of section 461 of the Code by the taxpayer for the production of an applicable critical mineral only, including direct or indirect materials costs as defined in § 1.263A-1(e)(2)(i)(A) and (e)(3)(ii)(E), respectively, but only if those direct or indirect material costs do not relate to the purchase of materials that are an eligible component at the time of acquisition (for example, an electrode active material as defined in § 1.45X-3(e)(2)(i) or applicable critical mineral as defined in paragraph (b) of this section). This definition of production costs incurred would include any costs incurred by the taxpayer related to the extraction of raw materials in the United States or a United States territory, but only if those costs are paid or incurred by the taxpayer that claims the section 45X credit with respect to the relevant applicable critical mineral. Section 263A of the Code and the regulations in this chapter under section 263A apply solely to identify the types of costs that are includible in production costs incurred for purposes of computing the amount of the section 45X credit, but do not apply for any other purpose, such as to determine whether a taxpayer is engaged in production activities.

(ii) Production costs for production of incorporated eligible components. The production costs that a taxpayer pays or incurs in the production of an eligible component (whether produced domestically or not) that the taxpayer then incorporates into a further distinct applicable critical mineral within the meaning of § 1.45X-1(f)(1) are not included in the costs incurred by the taxpayer in producing the further distinct applicable critical mineral. A taxpayer may not include the same production costs in the calculation of the credit amount for more than one eligible component. For example, if the taxpayer pays or incurs production costs of $50X for eligible component 1 and an additional $100X of production costs for eligible component 2 that included integrating eligible component 1 within the meaning of § 1.45X-1(f)(1), then the production costs for eligible component 1 equal $50X and the production costs for eligible component 2 equal $100X.

(4) Substantiation. In order to include direct or indirect materials costs as defined in § 1.263A-1(e)(2)(i)(A) and (e)(3)(ii)(E) as production costs when calculating a section 45X credit for the production and sale of an applicable critical mineral, a taxpayer, as part of filing an annual tax return (or a return for a short year within the meaning of section 443 of the Code), must include the information in paragraph (c)(4)(i) of this section as an attachment to that return, prepare the information required in paragraph (c)(4)(ii) through (iv) of this section and maintain that information in the taxpayer's books and records under section 6001, and comply with directions for the information required in paragraph (c)(4)(v) of this section as specified in guidance:

(i) Certification from any supplier, including the supplier's employer identification number and that is signed under penalties of perjury, from which the taxpayer purchased any constituent elements, materials, or subcomponents of the taxpayer's applicable critical mineral, stating that the supplier is not claiming the section 45X credit with respect to any of the material acquired by the taxpayer, nor is the supplier aware that any prior supplier in the chain of production of that material claimed a section 45X credit for the material.

(ii) A document that provides an analysis of any constituent elements, materials, or subcomponents that concludes the material did not meet the definition of an eligible component (for example, an applicable critical mineral or electrode active material) at the time of acquisition by the taxpayer. The document may be prepared by the taxpayer or ideally by an independent third-party.

(iii) A list of all direct and indirect material costs and the amount of such costs that were included within the taxpayer's total production cost for each applicable critical mineral.

(iv) A document related to the taxpayer's production activities with respect to the direct and indirect material costs that establishes the materials were used in the production of the applicable critical mineral. The document may be prepared by the taxpayer or ideally by an independent third-party.

(v) Any other information related to the direct or indirect materials specified in guidance.

(5) Failure to provide the documentation described in paragraph (c)(4) of this section with the return filing, or providing an available upon request statement, will constitute a failure to substantiate the claim.

(d) Applicability date. This section applies to eligible components for which production is completed and sales occur after December 31, 2022, and during a taxable year ending on or after October 28, 2024.

26 C.F.R. § 1.45X-3 26 C.F.R. § 1.45Y-0

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