December 17, 2010

Ethanol And Biodiesel Tax Credits Approved

Last night the House of Representatives passed the Bush tax cut package which contained several key ethanol and biodiesel tax incentives by a vote of 277 to 148. The Senate had passed the same measure on Wednesday by a vote of 81 to 19.

The bill contained five key ethanol tax provisions, including:

Blender’s Credit for Ethanol (VEETC). The bill extends the Volumetric Ethanol Excise Tax Credit through 2011 at the current rate of 45 cents per gallon.

Tariff on Imported Ethanol. The bill also extends through 2011 the existing 54 cent, secondary tariff on imported ethanol and the related tariff on ethyl tertiary-butyl ether.

Small Producer Tax Credit. The bill also extends through 2011 the 10 cent per gallon producer tax credit for small ethanol producers producing no more 60 million gallon of ethanol a year. The tax credit is applicable to just the first 15 million gallons of production for eligible producers.

Excise tax credits for alternative fuel and alternative fuel mixtures. The measure extends through 2011 the $0.50 per gallon alternative fuel credit and the alternative fuel mixture tax credits, excluding black liquor (liquid fuel derived from a pulp or paper manufacturing process) from credit eligibility.

Alternative fuel vehicle refueling property. The measure extends the 30 percent investment tax credit for alternative vehicle refueling property for one year, through 2011.

The bill also includes a retroactive reinstatement and extension of the biodiesel tax credit through 2011. The biodiesel tax credit had expired on December 31, 2009 and up to this point had not been reinstated.

The bill will now be sent to the President for his signature.

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