Pete Lowy explains that although the taxpayer lost, the decision’s reasoning may present more lucrative opportunities for taxpayers. Lowy said. “This may be the mythical Hydra — cut off one head and two more emerge.”
In a recent Tax Notes article “Federal Circuit Nixes $550 Million Butane Mixture Credit Claim,” Pete Lowy, Chamberlain Hrdlicka’s tax shareholder, comments on the impacts of a recent Federal Circuit opinion.
In a January 3, 2024 opinion in Philadelphia Energy Solutions Refining and Marketing LLC v. United States, the Federal Circuit upheld the Court of Federal Claims decision. Joining the Fifth and Seventh circuits, the Circuit found that butane isn’t an alternative fuel for purposes of alternative fuel mixture excise tax credits under section 6426.
“This should be the death knell for the butane-gasoline alternative fuel mixture credit cases,” commented Lowy. “Three federal appellate courts have now lined up against the [fuel mixers’] position.”
“What remains to be seen are the opportunities that result from the now unequivocal conclusion that butane is a taxable fuel,” Lowy continued. “This may be the mythical Hydra — cut off one head and two more emerge.”