Biodiesel Tax credits

Tax Credits, Bonuses, Grants etc

NEW- This link from GM provides a State by State guide to tax incentives available in your state. Visit the GM Tax Incentive page for more information.

Question: Are there tax incentives to help you get started in your biodiesel endeavors?

Answer: Currently there is a biodiesel mixture credit which gives blenders of record a distinct credit of $1.00 per gallon for agri-biodiesel and $0.50 per gallon for recycled oils (yellow grease) once blended into on- or off-road diesel. This program can help you in recovering any costs associated with preparing for distribution.

Also, you should contact your local government to see if there is any specific biodiesel legislation in your state which may be beneficial to your potential intervention with biodiesel. Finally, biodiesel is becoming attractive to many of your customers who appreciate the opportunity to use a cleaner burning environmentally friendly fuel which has many other benefits also. This is an option which would enhance your total offering to your valued customers.

Biodiesel is not exempt from federal excise taxes, and it is not exempt from most state or local taxes. That means that biodiesel and biodiesel blends are taxed at the same rate as diesel fuel. Some states have passed legislation that either reduces fuel excise taxes or provides other incentives. For local exceptions to this statement, please contact local tax authorities.

The federal government currently offers some incentives related to biodiesel. There are a number of grant programs available, as well as tax credits for blending biodiesel, and investment opportunities in certain refueling infrastructure. DOE’s Clean Cities Program maintains a Web site that summarizes state and local laws and incentives related to alternative fuels. This can be accessed at www.eere.energy.gov/cleancities/vbg/progs/laws.cgi

This article helps explain the tax credits a little more. There's a lot of other information in this one, so you have to scroll down to about page 8 to find it. View it Here.

Our local & US governments offer several ways to help you get started in your biodiesel endeavors. We've listed a few below. Click on the links for downloadable forms and more information.

Here's some good information from www.nbb.org

Tax Incentives

Congress has put in place a number of tax incentive programs that positively impact the biodiesel industry. Following is information pertaining to several of those programs.

Volumetric ‘Blender’ Tax Credit
The IRS has published on its website the various forms associated with the volumetric biodiesel credit. These forms (including Form 637, Form 720, Form 8849, Form 8864, and Form 4136) are available by going to the Forms and Publications page of the IRS website, www.irs.gov. A direct link to that page is: http://www.irs.gov/formspubs/lists/0,,id=97817,00.html.

Form 637 is the registration application that all biodiesel producers and blenders must complete. (Note: Becoming officially registered may take a considerable amount of time. Planning accordingly to meet the deadlines prescribed by the IRS is critical. For information about the registration process and timing, contact your local IRS Field Office.)

Form 720 is the Quarterly Federal Excise Tax Return. Entities utilize this form to report and pay federal excise tax.
Form 8849 is a general claim form for periodic refunds of federal excise tax.
Form 8864 is a claim form for credits claimed as income tax credits.
Form 4136 credit for federal tax paid on fuels.

Small Agri-Biodiesel Producer Tax Credit
The Small Agri-Biodiesel Producer Tax Credit was established as part of the Energy Policy Act of 2005. This tax credit program is a volumetric based income tax credit for the production of agri-biodiesel (biodiesel made from first-use vegetable oils and first-use animal fats).

Alternative Fuel Refueling Infrastructure Tax Credit
The Alternative Fuel Refueling Infrastructure Tax Credit was also established as part of the Energy Policy Act of 2005. This tax credit program provides a tax credit for the installation of certain qualifying fueling infrastructure that dispense alternative fuel, including biodiesel blends B20 and higher.

Documents

Blender Tax Credit

IRS Guidance Documents (Blender Tax Credit)

1. IRS Guidance Notice 2005-62 (Aug. 2005)
2. IRS Guidance Notice 2005-04 (Jan. 2005)

Blender Tax Credit—General Overview
Enacting Legislation

General Information

1. Tax Incentive - Fact Sheet
2. PMAA Memo - News on Alcohol and Bio-diesel blend tax refund claims

Small Agri-Biodiesel Producer Tax Credit

Alternative Fuel Refueling Infrastructure Tax Credit

Enacting Legislation

Other information

Alcohol Fuel Mixtures & Biodiesel Mixtures

Biodiesel & Renewable Diesel Fuels Credit

Alternative Fuel Vehicle Refueling Property Credit

Qualified Alternative Fuel Vehicle Refueling Property

Qualified alternative fuel vehicle refueling property is any property (other than a building or its structural components) used to do either of the following.

● Store or dispense a clean-burning fuel (defined below) into the fuel tank of a motor vehicle propelled by the fuel, but only if the storage or dispensing is at the point where the fuel is delivered into that tank.

● Recharge motor vehicles propelled by electricity, but only if the property is located at the point where the vehicles are recharged.

Clean-burning fuel. The following are clean-burning fuels.

● Any fuel at least 85 percent of the volume of which consists of 1

or more of the following: ethanol, natural gas, compressed natural

gas, liquefied natural gas, liquefied petroleum gas, or hydrogen, or

● Any mixture of biodiesel (as defined in section 40A(d)) or

renewable diesel and diesel fuel, determined without regard to any

use of kerosene and containing at least 20 percent biodiesel or

renewable diesel.

For a good article from the National Biodiesel board visit the NBB Website

Or read the PDF article about Biodiesel tax incentives HERE

New Story about the Tax Incentive from the NBB -

Permanent Biodiesel Tax Incentive Introduced on First Day of New Congress

Or THIS ARTICLE

We will post more information here as we get it.