Rev. Proc. 73-28

Section 1. Purpose.

The purpose of this Revenue Procedure is to prescribe under section 1.167(a)-11 and section 1.167(a)-12 of the Income Tax Regulations an asset guideline class, asset guideline period, asset depreciation range, and repair allowance percentage for assets which are used in the synthesis of pipeline quality gas from gaseous or liquid feedstocks consisting of naphtha or lighter hydrocarbons.

Class 49.22, "Manufactured Gas Production Plant," as published in Rev. Proc. 72-10, 1972-1 C.B. 721, is modified and redefined to include subclass 49.221 and subclass 49.222. As modified, class 49.221 includes the assets formerly included in class 49.22. Class 49.222 is a new asset guideline class which includes only those assets which are used in the catalytic conversion of naphtha or lighter hydrocarbon feedstocks to substitute natural gas (SNG).

Substitute natural gas (SNG) is defined as a manufactured gas whose chemical and physical characteristics make it completely interchangeable with natural gas.

Sec. 2. Asset Guideline Classes and Periods, Asset Depreciation Ranges and Asset Repair Allowances for Substitute Natural Gas (SNG) Production Plant.

For class 49.221 and class 49.222, the asset guideline class, guideline period, depreciation range, and repair allowance, as prescribed, are set forth below.

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Rev. Proc. 72-10 is modified by redesignating class 49.22, "Manufactured gas production plant," as class 49.22, "Gas making facilities," and including thereunder two subclasses, namely: class 49.221, "Manufactured gas production plant"; and class 49.222, "Substitute natural gas (SNG) production plant (naphtha or lighter hydrocarbon feedstocks)."

Sec. 4. Effective Date.

The asset guideline periods, ranges, and repair allowance percentages for class 49.221, "Manufactured gas production plant," and class 49.222, "Substitute natural gas (SNG) production plant (naphtha and lighter hydrocarbon feedstocks)," are effective for the property and the taxable years to which sections 1.167(a)-11 and 1.167(a)-12 of the regulations respectively apply. However, the taxpayer may at his option apply Rev. Proc. 72-10 without regard to this supplement for property placed in service in any such year beginning prior to January 1, 1973. Such option may be exercised for one such year and not for another or for all such years. The option shall be exercised in making the election to apply section 1.167(a)-11 or section 1.167(a)-12 for such year and may not be revoked after the latest time for making such election and shall apply only with respect to the section for which exercised.

¹ Also released as Technical Information Release 1255, September 4, 1973.