G Assignment of Credits
• Has not been at any time since September 1, 1988, owned or
controlled by any refiner that at the same time owned or controlled
Assigned Credits to Affiliated Corporations – For taxable years beginning
refineries in the United States with a total combined crude oil capacity
on or after July 1, 2008, credit earned by members of a combined reporting
of more than 137,500 barrels per stream day.
group may be assigned to an affiliated corporation that is a member of the
3. Qualified capital costs with respect to the facility, are costs paid or
same combined reporting group. A credit assigned may only be claimed
incurred during the applicable period that meet both CARB and EPA
by the affiliated corporation against its tax in taxable years beginning on or
regulations. The costs include, but are not limited to, expenditures for
after January 1, 2011. For more information, get form FTB 3544, Election to
the construction of new process operation units or the dismantling and
Assign Credit Within Combined Reporting Group, or form FTB 3544A, List
reconstruction of existing process units to be used in the production
of Assigned Credit Received and/or Claimed by Assignee or go to ftb.ca.gov
of ultra low sulfur diesel fuel, associated adjacent or offsite equipment
and search for credit assignment.
(including tankage, catalyst, and power supply), engineering,
construction period interest, site work, and permitting.
H Carryover
4. Applicable period with respect to the facility, is the period beginning
If the available credit exceeds the current year tax liability, the unused credit
January 1, 2004, and ending May 31, 2007.
may be carried over to the following year and the ten succeeding years until
5. Facility is a small refiner’s petroleum refinery located in California that
the credit is exhausted. In no event can the credit be carried back and applied
has incurred qualified capital costs to produce ultra low sulfur diesel fuel.
against a prior year’s tax. If you have a carryover, retain all records that
document this credit and carryover used in prior years. The Franchise Tax
6. Applicable EPA regulations is the Highway Diesel Fuel Sulfur Control
Board may require access to these records.
Requirements of the EPA.
7. Applicable CARB regulations is the Vehicular Diesel Fuel Sulfur Control
Specific Line Instructions
Requirements of the CARB under Section 2281 of Article 2 of Chapter 5
of Division 3 of Title 13 of the California Code of Regulations.
Current Year Credit
8. Barrels per stream day is the maximum number of barrels of input that
a distillation facility can process within a 24-hour period when running
Use line 1 through line 6 to figure any environmental tax credit from your
at full capacity under optimal crude and product slate conditions with no
own trade or business.
allowance for downtime.
Skip line 1 through line 6 if you are only claiming a credit that was
E Basis
allocated to you from a pass-through entity (S corporation, estate or trust,
partnership, or LLC classified as a partnership).
For more information, including basis reduction, see R&TC
S corporation, Estate or Trust, Partnership, or LLC (classified as a
Sections 17053.62 and 23662.
partnership)
F Limitations
Figure the total credit on line 1 through line 6. Then, allocate the line 6 credit
to each shareholder or partner in the same way that income and loss are
S corporations may claim only 1/3 of the credit against the 1.5% entity-
divided.
level tax (3.5% for financial S corporations). The remaining 2/3 must be
Part I – Current Year Credit
disregarded and may not be used as carryover. In addition, S corporations
may pass through 100% of the credit to their shareholders.
Line 1 – Ultra Low Sulfur Diesel Fuel Produced
If a taxpayer owns an interest in a disregarded business entity [a single
Enter the number of gallons of diesel fuel produced with a sulfur content of
member limited liability company (SMLLC) not recognized by California, and
15 parts per million or less.
for tax purposes is treated as a sole proprietorship owned by an individual
Line 3 – Qualified Capital Costs Limitation
or a branch owned by a corporation] the credit amount you receive from the
Enter 25% (.25) of the qualified capital costs (defined in Part D, Definitions)
disregarded entity that can be utilized is limited to the difference between the
for the facility that produces ultra low sulfur diesel fuel.
taxpayer’s regular tax figured with the income of the disregarded entity, and
Line 9 – Credit Carryover from Prior Years
the taxpayer’s regular tax figured without the income of the disregarded entity.
Enter the amount from your 2012 form FTB 3511, Part I, line 12.
An SMLLC may be disregarded as an entity from its owner, and is subject to
Line 11a – Credit Claimed (excluding assigned credits claimed on
statutory provisions that recognize otherwise disregarded entities for certain
purposes, for example:
form FTB 3544A)
The amount of this credit that can be claimed on your tax return may be
• The tax and fee of an LLC
further limited. Refer to the credit instructions in your tax booklet for more
• The tax return filing requirements of an LLC
information. These instructions also explain how to claim this credit on your
• The credit limitations previously mentioned
tax return. Use credit number 218 when you claim this credit. Also, see
Get Form 568, Limited Liability Company Tax Booklet, for more information.
General Information F, Limitations.
This credit cannot reduce the minimum franchise tax (corporations and
11b – Credit Assigned to Other Corporations
S corporations), the annual tax (limited partnerships, limited liability
Corporations that complete form FTB 3544A for this credit, enter the amount
partnerships, and LLCs classified as a partnership), the alternative minimum
from column (g) on this line.
tax (corporations, exempt organizations, individuals, and fiduciaries), the
built-in gains tax (S corporations), or the excess net passive income tax
Part II – Credit Recapture
(S corporations).
Line 13 – Credit Recapture
If a C corporation had unused credit carryovers when it elected S corporation
Any credit amount previously claimed must be added back to your tax
status, the carryovers were reduced to 1/3 and transferred to the S
liability if the facility was sold or removed from California within five years of
corporation. The remaining 2/3 were disregarded. The allowable carryovers
the date in which you first claimed the credit.
may be used to offset the 1.5% tax on net income in accordance with the
Enter the total here and on one of the following California tax returns
respective carryover rules. These C corporation carryovers may not be
or schedules:
passed through to shareholders. For more information, get Schedule C
• Schedule J (Form 100, 100S, or 100W)
(100S), S Corporation Tax Credits.
• Schedule K (Form 109, 565, or 568)
This credit cannot reduce regular tax below the tentative minimum tax
• Other Taxes (Form 540, or Long Form 540NR)
(TMT). Get Schedule P (100, 100W, 540, 540NR, or 541), Alternative
• Other Taxes (Form 541, Line 21b)
Minimum Tax and Credit Limitations, for more information.
This credit is not refundable.
Side 2 FTB 3511 2013