Fillable Form 3511 - California Environmental Tax Credit

H Carryover

3. Qualified capital costs with respect to the facility, are costs paid or

incurred during the applicable period that meet both CARB and EPA

If the available credit exceeds the current year tax liability, the unused credit

regulations. The costs include, but are not limited to, expenditures for

may be carried over to the following year and the ten succeeding years until

the construction of new process operation units or the dismantling and

the credit is exhausted. In no event can the credit be carried back and applied

reconstruction of existing process units to be used in the production

against a prior year’s tax. If you have a carryover, retain all records that

of ultra low sulfur diesel fuel, associated adjacent or offsite equipment

document this credit and carryover used in prior years. The Franchise Tax

(including tankage, catalyst, and power supply), engineering,

Board may require access to these records.

construction period interest, site work, and permitting.

4. Applicable period with respect to the facility, is the period beginning

Specific Line Instructions

January 1, 2004, and ending May 31, 2007.

5. Facility is a small refiner’s petroleum refinery located in California that

Current Year Credit

has incurred qualified capital costs to produce ultra low sulfur diesel fuel.

6. Applicable EPA regulations is the Highway Diesel Fuel Sulfur Control

Use line 1 through line 6 to figure any environmental tax credit from your

Requirements of the EPA.

own trade or business.

7. Applicable CARB regulations is the Vehicular Diesel Fuel Sulfur Control

Skip line 1 through line 6 if you are only claiming a credit that was allocated

Requirements of the CARB under Section 2281 of Article 2 of Chapter 5

to you from a pass-through entity (S corporation, estate trust, partnership,

of Division 3 of Title 13 of the California Code of Regulations.

or LLC classified as a partnership).

8. Barrels per stream day is the maximum number of barrels of input that

S corporation, Estate Trust, Partnership, or LLC (classified as a

a distillation facility can process within a 24-hour period when running

partnership)

at full capacity under optimal crude and product slate conditions with no

Figure the total credit on line 1 through line 6. Then, allocate the line 6 credit

allowance for downtime.

to each shareholder or partner in the same way that income and loss are

divided.

E Basis

Part I – Current Year Credit

For more information, including basis reduction, see R&TC

Line 1 – Ultra Low Sulfur Diesel Fuel Produced

Sections 17053.62 and 23662.

Enter the number of gallons of diesel fuel produced with a sulfur content of

F Limitations

15 parts per million or less.

Line 3 – Qualified Capital Costs Limitation

S corporations may claim only 1/3 of the credit against the 1.5% entity-

Enter 25% (.25) of the qualified capital costs (defined in Part D, Definitions)

level tax (3.5% for financial S corporations). The remaining 2/3 must be

for the facility that produces ultra low sulfur diesel fuel.

disregarded and may not be used as carryover. In addition, S corporations

may pass through 100% of the credit to their shareholders.

Line 9 – Credit Carryover from Prior Years

Enter the amount from your 2014 form FTB 3511, Part I, line 12.

If a taxpayer owns an interest in a disregarded business entity [a single

member limited liability company (SMLLC) not recognized by California, and

Line 11a – Credit claimed

for tax purposes is treated as a sole proprietorship owned by an individual

Do not include assigned credits claimed on form FTB 3544A.

or a branch owned by a corporation] the credit amount you receive from the

This amount may be less than the amount on line 10 if your credit is limited

disregarded entity that can be utilized is limited to the difference between the

by your tax liability. For more information, see General Information F,

taxpayer’s regular tax figured with the income of the disregarded entity, and

Limitations and refer to the credit instructions in your tax booklet. Use credit

the taxpayer’s regular tax figured without the income of the disregarded entity.

code 218 when you claim this credit.

For more information on SMLLC, get Form 568, Limited Liability Company

11b – Total Credit Assigned

Tax Booklet.

Corporations that assign credit to other corporations within combined

reporting group must complete form FTB 3544. Enter the total amount of

This credit cannot reduce the minimum franchise tax (corporations and

credit assigned from form FTB 3544, column (g) on this line.

S corporations), the annual tax (limited partnerships, limited liability

partnerships, and LLCs classified as a partnership), the alternative minimum

Part II – Credit Recapture

tax (corporations, exempt organizations, individuals, and fiduciaries), the

built-in gains tax (S corporations), or the excess net passive income tax

Line 13 – Credit Recapture

(S corporations).

Any credit amount previously claimed must be added back to your tax

liability if the facility was sold or removed from California within five years of

If a C corporation had unused credit carryovers when it elected S corporation

the date in which you first claimed the credit.

status, the carryovers were reduced to 1/3 and transferred to the S

corporation. The remaining 2/3 were disregarded. The allowable carryovers

Enter the total here and on one of the following California tax returns

may be used to offset the 1.5% tax on net income in accordance with the

or schedules:

respective carryover rules. These C corporation carryovers may not be

• Schedule J (Form 100, 100S, or 100W)

passed through to shareholders. For more information, get Schedule C

• Schedule K (Form 109, 565, or 568)

(100S), S Corporation Tax Credits.

• Other Taxes (Form 540, or Long Form 540NR)

This credit cannot reduce regular tax below the tentative minimum tax

• Other Taxes (Form 541, Line 21b)

(TMT). Get Schedule P (100, 100W, 540, 540NR, or 541), Alternative

Minimum Tax and Credit Limitations, for more information.

This credit is not refundable.

G Assignment of Credits

Assigned Credits to Affiliated Corporations – Credit earned by members

of a combined reporting group may be assigned to an affiliated corporation

that is a member of the same combined reporting group. A credit assigned

may only be claimed by the affiliated corporation against its tax liability.

For more information, get form FTB 3544, Election to Assign Credit Within

Combined Reporting Group, or form FTB 3544A, List of Assigned Credit

Received and/or Claimed by Assignee or go to ftb.ca.gov and search for

credit assignment.

Page 2 FTB 3511 Instructions 2015

Form 3511 - California Environmental Tax Credit - 2015 Page 2

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