# Prop. Treas. Reg. § 1.45W-4: Special rules. Proposed regulation, not in force. REG-118269-23, 90 FR 3506, published 2025-01-14 . Interprets 26 U.S.C. § 45W. Par. 4. Sections 1.45W-0 through 1.45W-5 are added to read as follows: (a) No double benefit —(1) Previous allowance of section 45W or 30D credit. No credit is allowed under section 45W(a) of the Code (section 45W credit) with respect to any vehicle for which a section 45W credit or a section 30D credit was previously allowed for such vehicle. (2) Allowance of other deduction or credit. Under sections 45W(d)(1) and 30D(f)(2) of the Code, the amount of any deduction or other credit allowable under chapter 1 of the Code (chapter 1) for a vehicle for which a section 45W credit is allowable must be reduced by the amount of the section 45W credit allowed for such vehicle. See also § 1.25E-2(b)(1). (3) Recordkeeping for the qualified commercial clean vehicle credit. In accordance with § 1.6001-1, a taxpayer claiming a credit under section 45W must keep permanent books of account or records sufficient to establish the amount of any such credit required to be shown by such taxpayer in any return of tax or information return. Such records must be sufficient to establish, for example, that the section 45W credit claimed is not disallowed by paragraph (a)(1) of this section, subject to reduction under § 1.25E-2(b)(1), or, if any such reduction is required, the amount of such reduction. (b) Credit ineligibility resulting from certain transactions and uses —(1) In general. This paragraph (b) provides rules that apply to certain transactions involving qualified commercial clean vehicles and certain uses of such vehicles, including cancelled sales, vehicle returns, resales, or less than 100 percent use in a trade or business. (2) Cancelled sale. If a sale of a qualified commercial clean vehicle is cancelled before the taxpayer places the vehicle in service, then— (i) The taxpayer may not claim the section 45W credit with respect to the vehicle; (ii) The vehicle may still be eligible for the section 45W credit; and (iii) A subsequent buyer of the vehicle will not be required to apply the residual value rules of § 1.45W-2(f) to determine the incremental cost of the vehicle. (3) Vehicle return. If a taxpayer returns a qualified commercial clean vehicle to the seller within 30 days of placing such vehicle in service, then— (i) The taxpayer may not claim the section 45W credit with respect to the vehicle; (ii) The vehicle may still be eligible for the section 45W credit; and (iii) A subsequent buyer of the vehicle must apply the residual value rules of § 1.45W-2(f) to determine the incremental cost of the vehicle. (4) Resale. If a taxpayer resells a qualified commercial clean vehicle within 30 days of placing the vehicle in service, then— (i) The taxpayer is treated as having acquired such vehicle with the intent to resell; (ii) The taxpayer may not claim the section 45W credit with respect to the vehicle; (iii) The vehicle may still be eligible for the section 45W credit; and (iv) A subsequent buyer of the vehicle must apply the residual value rules of § 1.45W-2(f) to determine the incremental cost of the vehicle. (5) Less than 100 percent trade or business use in taxable year vehicle is placed in service. If a taxpayer's trade or business use of a qualified commercial clean vehicle for the taxable year such vehicle is placed in service by the taxpayer is less than 100 percent of the taxpayer's total use of that vehicle for that taxable year (other than incidental personal use, such as a stop for lunch on the way between two job sites), including because the vehicle is sold or otherwise disposed of, the vehicle is ineligible for the section 45W credit. This rule also applies to a qualified commercial clean vehicle placed in service by a tax-exempt entity, except that 100 percent trade or business use means the tax-exempt entity's use that is related to an exempt purpose or an unrelated trade or business purpose. (c) Recapture —(1) In general. This paragraph (c) provides rules regarding the recapture of the section 45W credit pursuant to sections 45W(d)(1) and 30D(f)(5). (2) Recapture in the case of less than 100 percent trade or business use —(i) In general. Except as provided in paragraph (c)(2)(ii) of this section, if a taxpayer ceases to use a qualified commercial clean vehicle for 100 percent trade or business use (other than incidental personal use) during the 18-month period beginning on the date the vehicle is placed in service, including because the vehicle is sold or otherwise disposed of, then— (A) The taxpayer may not claim the section 45W credit with respect to the vehicle. If the taxpayer has already claimed the section 45W credit, the credit is recaptured as a tax under chapter 1. (B) The vehicle may still be eligible for the section 45W credit; and (C) A subsequent buyer must apply the residual value rules of § 1.45W-2(f)(3) to determine the incremental cost of the vehicle. (ii) Applicability to vehicles placed in service by a tax-exempt entity. For a qualified commercial clean vehicle placed in service by a tax-exempt entity, the 100 percent trade or business use rule in paragraph (c)(2)(i) of this section applies, except that, as provided in paragraph (b)(5) of this section, 100 percent trade or business use means the tax-exempt entity's use that is related to an exempt purpose or an unrelated trade or business purpose. (d) Elective payment elections. In the case of an applicable entity, as described in section 6417(d)(1) of the Code and § 1.6417-1(c) with respect to which an applicable credit listed in section 6417(b) is determined for a taxable year, section 6417(a) allows the applicable entity to make an election to treat the applicable entity as making a payment against the tax imposed by subtitle A of the Code equal to the amount of the applicable credit. Section 6417(b)(6) and § 1.6417-1(d)(6) include the section 45W credit as an applicable credit, but only with respect to a section 45W credit determined by reason of section 45W(d)(2) by a tax-exempt entity described in section 168(h)(2)(A)(i), (ii), or (iv) that is also an applicable entity listed in section 6417(d)(1) and § 1.6417-1(c). (e) Leases. For purposes of section 45W(d)(2), a vehicle is subject to a lease if it is leased within 30 days of being placed in service by a tax-exempt entity. (f) Applicability date. This section applies to taxable years ending after [date of publication of the final regulations in the Federal Register ].