The U.S. Department of Energy, in charge of energy
efficiency and renewable energy, has established some tax incentives that are
really attractive to sellers and people with business related to biodiesel or biofuel.
Basically, these policies have been made to
“incentive” the production, investment, improvement and even the creation of new
biodiesel types, and to reduce the dependency of imported oils.
Importance of the
Incentives and Programs
Not only tax incentives are all you can get from this
organization but different programs that will help operators and landowners
through financial assistance such as loans and grants to establish, produce,
and even deliver biomass feedstock crops.
By promoting these activities, people feel more
interested in investing money with this renewable energy fuel which can lead to
greater advances that might make U.S. fuel competitive in the industry as well
as the creation of new biofuel blends.
Among all the tax incentive programs established by
the U.S. Department of Energy we can find:
Advanced Biofuel
Feedstock Incentive
This is a Biomass Crop Assistance Program that will
provide financial aids to contractors and landowners in order to deliver,
produce, and commercialize biomass feedstock crops.
Qualified producers can get yearly payments for up to
five years for herbaceous feedstocks and fifteen years for woody feedstocks as
well as a reimbursement of the 50% of the cost of the crop.
Biodiesel Mixture
Excise Tax Credit
For this program are eligible all biodiesel blenders,
the only requirement is that they have to be registered with the IRS (Internal
Revenue Service). The tax intensive is 1$ per gallon of pure biodiesel,
renewable diesel with petroleum diesel in order to produce a blend of 0.1% of
diesel fuel.
The incentive is first taken as a credit against the
blender tax liability if there are any excess, the IRS can claim it as a direct
payment.
Second Generation
Biofuel Producer Tax Credit
Applicants for this program have to be also registered
with the Internal Revenue Service and are all the producers of secondgeneration biofuel and the amount is 1.01$ per second generation biofuel
gallon.
Among the conditions for the claim, this tax incentive
is that the purchaser uses the fuel to produce a second generation biofuel
mixture; the buyer uses the fuel as a motor vehicle fuel; used by the producer
as a fuel for business reasons; etc.
The credit reduces in 0.46$ per gallon when is biofuel
with ethanol and 0.41$ per gallon when doesn’t have ethanol.
Biodiesel Income
Tax Credit
The sellers of unblended biodiesel (B100) that
delivers into the tank of the buyer´s vehicle biodiesel as an on-road fuel are
eligible for the tax incentive that goes up to 1.00$ per gallon.
Only the person that sold at retail and placed the
biodiesel into the customer´s car has the opportunity and is eligible for the
tax incentive, alike the Biodiesel Mixture Excise Tax Credit, the incentive is
a credit against the applicant´s income tax liability.
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