Rev. Proc. 2024-15: Guidance on qualifying securitizations by public utilities

Type
:
Opportunity
Tax Area
:
Corporate Income Tax
Status
:
Guidance
Qualification
:
Various
Implemented date
:
NA
Country
:
United States
Date added
29 Feb
,
2024
Docxster’s Summary

The IRS has issued Revenue Procedure 2024-15, which provides guidance on the requirements for a securitization to qualify as a tax-exempt securitization by a public utility. The guidance includes a safe harbor for determining whether a securitization meets the requirements, as well as rules for determining the amount of tax-exempt interest that can be paid to investors. This guidance is important for public utilities looking to finance infrastructure projects through securitization.

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The IRS today released Rev. Proc. 2024-15 setting forth the manner in which a public utility may treat certain legislatively authorized transactions entered into by the public utility to recover specified costs through a non-bypassable surcharge to customers within the utility’s historic service area.

Rev. Proc. 2024-15 [PDF 92 KB] specifically addresses a securitization that involves the issuance of debt instruments by a “qualifying State financing entity.” Rev. Proc. 2024-15 also modifies Rev. Proc. 2005-62 to expand the definition of “public utility” to include all public utilities, not just investor-owned utilities, and to change the definition of a “qualifying securitization” to allow payments to be provided at least annually.

The revenue procedure is effective on or after February 29, 2024.

 

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Source :
KPMG
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