Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Does the equipment described qualify for Class 43.1 treatment? If not, which CCA class is appropriate?
Position: No.
Reasons: The residual used in the process does meet the definition of wood waste in Regulation 1104(13). The equipment should be included in Class 43.
XXXXXXXXXX 2003-002899
Luisa A. Majerus
September 5, 2003
Dear XXXXXXXXXX:
Re: Class 43.1 Eligibility of a Proposed Waste-Fueled Heat Production System
We are writing in reply to a letter dated July 3, 2003 from Mr. Tom Jewitt of Natural Resources Canada ("NRCAN"). On your behalf, Mr. Jewitt has requested that we provide our views as to which capital cost allowance ("CCA") class the particular equipment should be placed in. We acknowledge the receipt of the document entitled "PulseEnhanced Steam Reforming - A Low Impact Technology for Energy from Biomass".
Background
XXXXXXXXXX ("the Company") is installing a PulseEnhanced steam reformer ("the equipment") at its mill to process pulping liquor from the mill's pulping operations. The pulping liquor will be reformed into a hydrogen-rich gas that will be burned in a boiler to produce process steam for the mill.
The equipment does not qualify as a Class 43.1 asset pursuant to subparagraph (d)(ix) of that definition in Schedule II to the Income Tax Regulations (the "Regulations") since the residual liquor is specifically excluded from the definition of wood waste in Regulation 1104(13).
It is our view that the equipment would qualify as a Class 43 asset as defined in Schedule II to the Regulations.
We trust these comments will be of assistance.
Yours truly,
For Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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