Tax Changes for Blenders/Retailers

Biodiesel Blended Fuel Tax Credit Change

For tax years January 1, 2006-December 31, 2008, in order to be eligible for the refundable tax credit, 50% or more of the total gallons of diesel fuel sold in the aggregate at all motor fuel sites during the tax year must be biodiesel blended fuel. Effective for tax years beginning on or after January 1, 2009, the tax credit is calculated the same as the ethanol incentive has been...site by site. Rather than the aggregate of all sites to be eligible for the tax credit, 50% or more of the total gallons of diesel fuel sold at each motor fuel site must be biodiesel blended fuel. The biodiesel blended fuel tax credit is then calculated separately for each qualifying retail motor fuel. The tax credit still is three cents multiplied by the total number of gallons of biodiesel blended fuel at the qualified site.

Biodiesel Blended Fuel Tax Credit

A retail dealer who sells or dispenses biodiesel blended fuel is eligible for this new income tax credit. The biodiesel must be at least 2% blended for the tax credit to apply. The retailer qualifies for the tax credit if they sell 50% or more of at least B2 biodiesel from the entire volume of diesel they sell, and the 3 cents per gallon tax credit will apply to every gallon of biodiesel sold if they qualify. This tax credit applies retroactively to tax years beginning January 1, 2006, and is repealed on January 1, 2012. The blend (B2, B5, B20) is irrelevant and not related to total volume of oil. Each site that sells 50% or more of total volume as B2 or higher is eligible for the 3 cents per gallon income tax credit.