Internal Revenue Bulletin:  2013-32 

August 5, 2013 

Notice 2013-50

2013 Section 43 Inflation Adjustment


Table of Contents

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 2012 calendar year ($94.53) exceeds $28 multiplied by the inflation adjustment factor for the 2012 calendar year ($28 multiplied by 1.5968 = $44.71) by $49.82, the enhanced oil recovery credit for qualified costs paid or incurred in 2013 is phased out completely.

Table 1 contains the GNP implicit price deflator used for the 2013 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 2012 calendar years.

Notice 2013-50 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)  
* 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.

Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 2013 calendar year as well as the previously published inflation adjustment factors and phase-out amounts for taxable years beginning in the 1991 through 2012 calendar years.

Notice 2013-50 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

DRAFTING INFORMATION

The principal author of this notice is Brian J. Americus of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Mr. Americus at (202) 622-3110 (not a toll-free call).


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