from Deutsche Bank - Equity Research
We have received some reports from our industry contacts that recent legislative moves may allow the industry to claim a Cellulosic Fuel credit (IRC 40(b)(6)) for Black Liquor produced and fired between 1/1/10 and the enactment date of the new bill (likely to be in next several days). This could produce a substantial 1Q10 windfall for kraft-based producers. The size of the cellulosic fuel credit is $1.01/gallon, rather than $0.50/gallon with Black Liquor. The cellulosic credit appears taxable, while the tax status of the black liquor credits is still an open question. It also appears that companies may have the ability to re-file for 2009 (depending on their tax situation) and claim the larger cellulosic credit, rather than the black liquor credit. Our contacts suggest that all the big four accounting firms as well as several law firms are currently working on this issue.
Thus, it is safe to assume most paper companies are digging into the
issue.
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1 comment:
I would be shocked to learn DC would continue to subsidize paper industry after all the pressure they received from the black liq. rebates. Any update?
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