CAFC Denies Canadian Gov't Rehearing Bid in CVD Case on Wind Towers

The U.S. Court of Appeals for the Federal Circuit on Sept. 11 denied a motion for rehearing from the governments of Canada and Quebec and exporter Marmen Inc. regarding the court's decision sustaining the countervailability of a Canadian tax program. All the judges in regular active service -- Judges Kimberly Moore, Alan Lourie, Timothy Dyk, Sharon Prost, Jimmie Reyna, Richard Taranto, Raymond Chen, Todd Hughes, Kara Stoll, Tiffany Cunningham and Leonard Stark -- agreed to deny the petition (Government of Quebec v. U.S., Fed. Cir. # 22-1807).

The court sustained the countervailability of the tax program, which relates to the additional depreciation for certain Class 1 assets, in the countervailing duty investigation on utility scale wind towers from Canada (see 2406210031). The Canadian tax system allows for depreciation deductions from taxable income, and "class 1 assets" set depreciation rates for three distinct building categories. Residential buildings get a standard 4% deduction, manufacturing facilities get a 10% rate and commercial buildings get a 6% rate.

CAFC said deductions given in addition to the standard 4% rate amount to forgone revenue for the Canadian government. The Canadian government argued that the court let the Commerce Department ignore "economic reality" and elevate "form over substance" (see 2408060038).