The Fight

Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Q&A

What a Tax Expert Thinks of Trump’s IRA Order

A conversation with Bob Moczulewski, tax director for Baker Tilly’s federal credits and incentives practice

What a Tax Expert Thinks of Trump’s IRA Order
Heatmap Illustration

Given the Trump administration’s new pause on grants under the Inflation Reduction Act, this week’s conversation is with Bob Moczulewski, tax director for Baker Tilly’s federal credits and incentives practice. We asked him to explain this 90-day pause via executive order, because if anyone’s going to cut the nonsense and tell you what actually matters here, it’ll be a tax expert.

The following chat was lightly edited for clarity.

Does Trump’s executive order actually impact the IRA’s tax credits?

The IRA had several components to it, most of which – the biggest things – are tax credits. Those are written into tax law. They are a legally binding ability for developers and users, creators of renewable energy that are allowed within the law – wind, solar, geothermal, battery storage, biogas – those are laws.

[The order] has a stop on those items that were more discretionary that had the control of the administration to delegate out: its grants, loans, and contracts. That has no impact on the tax credits, where the bulk of the IRA sits right now. A lot of that stuff was in anticipation of being heavily pushed through and sent out before January 20. There’s actual impact there. But tax credits are not appropriated funds.

This is not holding back the tax credits that are there.

You’ve said it is unclear if this covers all prospective funding, like direct pay?

If you’re a municipality and you put up a solar project that is eligible for tax credits and direct pay, that is the part with this potential slow play that could be done here. We really don’t know what the executive branch can do to hold back the payment of those direct payments. If you’re a business, you put up a solar, it’s a $10,000 tax credit, you can use it to reduce your taxable income. None of these orders impact that.

Now if you’re a municipality and you’re requesting a direct payment for those tax credits that are legally binding in tax law, I could see the possibility that an executive branch could have pressure on the Treasury Department, which has pressure on the IRS, to slow play those payments. But that’s only speculation. The law is stated, this is supposed to be paid out. This is in a realm of, y’know, almost a conspiracy theory-type of thing that could be done.

With respect to how a pause like this can impact the bankability of IRA, are you seeing it affect executives’ views on the durability of the law?

I would say there’s just a lot of caution as to [the] next steps around it. These are laws. Until the laws are repealed, if they are repealed, that would be the only way you’d know for certain.

As I’ve explained many times over, the history of tax credit laws is once they’re repealed or altered, those changes are prospective as to the time the law is changed. If I have a half a billion dollar solar project underway, I’ve met or begun a construction criteria. There has been no prior passing of tax laws that would revoke the ability to claim credits on that.

What are you watching for next for clarity?

There’s two things I’m looking for in the future. Where pundits around this really feel this is truly going. And the other part is to see if there’s any actual traction to repeal the tax credits that exist right now.

There’s a whole new realm of credits that begin in 2025 and continue through 2032. Will there be incentive to repeal those credits?

I have clients that are engaging in multi billions of dollars of projects that are in the heart of the southern tier of the United States of America, that would impact thousands of jobs. Those groups have strong ties to a lot of senators and congresspeople along the way. Just enough of a push and turn on this and all it takes is a few senators to not go along with it.

Editor’s note: A previous version of this article misidentified Moczulewski’s profession. He is a CPA, not an attorney. The article has been corrected. We regret the error.

This article is exclusively
for Heatmap Plus subscribers.

Go deeper inside the politics, projects, and personalities
shaping the energy transition.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Q&A

Why a Climate Law Expert Sees ‘Small Glimmers of Hope’

Talking about the data center backlash, the midterm elections, and the future of renewables with Columbia Law School’s Romany Webb.

Romany Webb.
Heatmap Illustration/Getty Images

This week’s conversation is a quick catch-up with our friends at Columbia Law School’s Sabin Center for Climate Change Law. I hopped on the phone with the center’s deputy director Romany Webb to chat about recent updates they published to anti-renewables opposition analysis. I wanted to dig into their research beyond the toplines — what should people care about in the coming election? How have data centers come up in their research? Or the repeal of the Inflation Reduction Act?

The following conversation was lightly edited for clarity.

Keep reading...Show less
Yellow
Hotspots

All the Data Center News That’s Fit to Print

A developer sues an Arkansas paper, plus more of the week’s biggest development fights.

The United States.
Heatmap Illustration/Getty Images

1. Pulaski County, Arkansas – A major utility sued the biggest newspaper in Arkansas over reporting on a data center energy deal. It’s a crucial case to follow.

  • The lawsuit Entergy filed last week against the Arkansas Democrat-Gazette centers on whether the newspaper was legally able to publish about an Entergy deal with Google around payments for a large solar farm to power a data center. It claims the information reported was a trade secret accidentally released by the state public services commission.
  • In a statement to a local ABC station, the utility claimed Google’s “electricity contract may be confidential to newspapers,” and that the publication also erroneously reported on the solar farm financing. Entergy is seeking a temporary restraining order blocking the publication from reporting any more information in its possession that would qualify as theirs or Google’s trade secrets, and claims they believe more information is in the publication’s possession that may be reported in the future, according to federal court filings.
  • So far, the utility has been unable to win the stoppage and U.S. District Judge Lee Rudofsky rejected their request on Wednesday. The case is proceeding and I will be checking in regularly for you on this one.
  • Why is this case so important? This is easily the most aggressive communications response to public reporting on a previously-unknown deal related to a data center. At a time when non-disclosure agreements are a profound liability for the sector, I am surprised to see a utility go as far as a federal court challenge.

2. Lackawanna County, Pennsylvania – Speaking of hardcore legal strategies, have you ever heard of a data center developer asking every local official to recuse themselves?

Keep reading...Show less
Yellow
Spotlight

The Top 5 Midterm Races of the Data Center Backlash

What we’ll be watching for on election night.

Candidates.
Heatmap Illustration/Getty Images

It’s almost fall 2026 and you know what means: It’s time to figure out the must-watch midterm races amidst the data center backlash.

I’ve spent the past week pulling together a list of the top five congressional races worth watching as bellwethers for the impacts of the data center backlash in the American electorate. This list has three U.S. House races where Republicans are defending seats, one where a House Democrat is defending their seat, and the Senate race many of you are probably most thinking about anyway. Think of it as a tipsheet.

Keep reading...Show less
Yellow