Section 43(b)(3)(B) of the Internal Revenue Code requires the Secretary to publish an inflation adjustment factor. The enhanced oil recovery credit under § 43 for any taxable year is reduced if the “reference price,” determined under § 45K(d)(2)(C), for the calendar year preceding the calendar year in which the taxable year begins is greater than $28 multiplied by the inflation adjustment factor for that year. The credit is phased out in any taxable year in which the reference price for the preceding calendar year exceeds $28 (as adjusted) by at least $6.
The term “inflation adjustment factor” means, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990.
Because the reference price for the 2013 calendar year ($96.13) exceeds $28 multiplied by the inflation adjustment factor for the 2013 calendar year ($28 multiplied by 1.5974 = $44.73) by $51.40, the enhanced oil recovery credit for qualified costs paid or incurred in 2014 is phased out completely.
Table 1 contains the GNP implicit price deflator used for the 2014 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 2013 calendar years.
| Notice 2014–64 TABLE 1 | |
|---|---|
| GNP IMPLICIT PRICE DEFLATORS | |
| Calendar Year | GNP Implicit Price Deflator |
| 1990 | 112.9 (used for 1991) |
| 1991 | 117.0 (used for 1992) |
| 1992 | 120.9 (used for 1993) |
| 1993 | 124.1 (used for 1994) |
| 1994 | 126.0 (used for 1995)* |
| 1995 | 107.5 (used for 1996) |
| 1996 | 109.7 (used for 1997)** |
| 1997 | 112.35 (used for 1998) |
| 1998 | 112.64 (used for 1999)*** |
| 1999 | 104.59 (used for 2000) |
| 2000 | 106.89 (used for 2001) |
| 2001 | 109.31 (used for 2002) |
| 2002 | 110.63 (used for 2003) |
| 2003 | 105.67 (used for 2004)**** |
| 2004 | 108.23 (used for 2005) |
| 2005 | 112.129 (used for 2006) |
| 2006 | 116.036 (used for 2007) |
| 2007 | 119.656 (used for 2008) |
| 2008 | 122.407 (used for 2009) |
| 2009 | 109.764 (used for 2010)***** |
| 2010 | 110.654 (used for 2011) |
| 2011 | 113.347 (used for 2012)****** |
| 2012 | 115.387 (used for 2013) |
| 2013 | 106.710 (used for 2014)******* |
* Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The 1990 GNP implicit price deflator used to compute the 1996 § 43 inflation adjustment factor is 93.6.
** Beginning in 1997, two digits follow the decimal point in the GNP implicit price deflator. The 1990 GNP price deflator used to compute the 1998 § 43 inflation adjustment factor is 93.63.
*** Beginning in 1999, the GNP implicit price deflator was rebased relative to 1996. The 1990 GNP implicit price deflator used to compute the 2000 § 43 inflation adjustment factor is 86.53.
**** Beginning in 2003, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2004 § 43 inflation adjustment factor is 81.589.
***** Beginning in 2009, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2010 § 43 inflation adjustment factor is 72.199.
****** Beginning in 2011, the 1990 GNP implicit price deflator used to compute the 2012 § 43 inflation adjustment factor is 72.260.
******* Beginning in 2013, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2014 § 43 inflation adjustment factor is 66.803.
Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 2014 calendar year as well as the previously published inflation adjustment factors and phase-out amounts for taxable years beginning in the 1991 through 2013 calendar years.
The principal author of this notice is Martha M. Garcia of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Ms. Garcia at (202) 317-6853 (not a toll-free number).
| Notice 2014–64 TABLE 2 | ||
|---|---|---|
| INFLATION ADJUSTMENT FACTORS AND PHASE-OUT AMOUNTS | ||
| Calendar Year | Inflation Adjustment Factor | Phase-out Amount |
| 1991 | 1.0000 | 0 |
| 1992 | 1.0363 | 0 |
| 1993 | 1.0708 | 0 |
| 1994 | 1.0992 | 0 |
| 1995 | 1.1160 | 0 |
| 1996 | 1.1485 | 0 |
| 1997 | 1.1720 | 0 |
| 1998 | 1.1999 | 0 |
| 1999 | 1.2030 | 0 |
| 2000 | 1.2087 | 0 |
| 2001 | 1.2353 | 0 |
| 2002 | 1.2633 | 0 |
| 2003 | 1.2785 | 0 |
| 2004 | 1.2952 | 0 |
| 2005 | 1.3266 | 0 |
| 2006 | 1.3743 | 100 percent |
| 2007 | 1.4222 | 100 percent |
| 2008 | 1.4666 | 100 percent |
| 2009 | 1.5003 | 100 percent |
| 2010 | 1.5203 | 100 percent |
| 2011 | 1.5326 | 100 percent |
| 2012 | 1.5686 | 100 percent |
| 2013 | 1.5968 | 100 percent |
| 2014 | 1.5974 | 100 percent |
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