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

Biodiesel Tax Incentive Reform and Extension Act of 2009

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
1. Final Energy Conference Report (2MB pdf)
2. HR4520 Report Language/Summary
3. HR4520 Conference Report/Biodiesel Provisions
4. HR4520 Conference Report - Complete Report

• General Information

           1.  PMAA Memo - News on Alcohol and Bio-diesel blend tax refund claims

Small Agri-Biodiesel Producer Tax Credit

• General Overview
• Enacting Legislation

Alternative Fuel Refueling Infrastructure Tax Credit

• Enacting Legislation