Can anyone interpret this? This is the new tax credit passed last week and to be signed into law next week. Since it is in reference to other codes, its hard to follow. Might be a good thing for small producers, but who knows? Is this tax credit for the users at 50 cents per gallon? Up to B-50? WVO based biodiesel the same as soy?
Tom Leue SEC. 302. BIODIESEL INCOME TAX CREDIT. (a) IN GENERAL.—Subpart D of part IV of sub chapter A of chapter 1 (relating to business related credits) is amended by inserting after section 40 the following new section: ‘‘SEC. 40A. BIODIESEL USED AS FUEL. ‘‘(a) GENERAL RULE.—For purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of— ‘‘(1) the biodiesel mixture credit, plus ‘‘(2) the biodiesel credit. ‘‘(b) DEFINITION OF BIODIESEL MIXTURE CREDIT AND BIODIESEL CREDIT.— For purposes of this section— ‘‘(1) BIODIESEL MIXTURE CREDIT.— ‘‘(A) IN GENERAL.—The biodiesel mixture credit of any taxpayer for any taxable year is 50 cents for each gallon of biodiesel used by the taxpayer in the production of a qualified biodiesel mixture. ‘‘(B) QUALIFIED BIODIESEL MIXTURE.— The term ‘qualified biodiesel mixture’ means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which— ‘‘(i) is sold by the taxpayer producing such mixture to any person for use as a fuel, or ‘‘(ii) is used as a fuel by the taxpayer producing such mixture. ‘‘(C) SALE OR USE MUST BE IN TRADE OR BUSINESS, ETC.—Biodiesel used in the production of a qualified biodiesel mixture shall be taken into account— ‘‘(i) only if the sale or use described in subparagraph (B) is in a trade or business of the taxpayer, and ‘‘(ii) for the taxable year in which such sale or use occurs. ‘‘(D) CASUAL OFF-FARM PRODUCTION NOT ELIGIBLE.—No credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture. ‘‘(2) BIODIESEL CREDIT.— ‘‘(A) IN GENERAL.—The biodiesel credit of any taxpayer for any taxable year is 50 cents for each gallon of biodiesel which is not in a mixture with diesel fuel and which during the taxable year— ‘‘(i) is used by the taxpayer as a fuel in a trade or business, or ‘‘(ii) is sold by the taxpayer at retail to a person and placed in the fuel tank of such person’s vehicle. ‘‘(B) USER CREDIT NOT TO APPLY TO BIODIESEL SOLD AT RETAIL.—No credit shall be allowed under subparagraph (A)(i) with respect to any biodiesel which was sold in a retail sale described in subparagraph (A)(ii). ‘‘(3) CREDIT FOR AGRI-BIODIESEL.—In the case of any biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A) shall be applied by substituting ‘$1.00 ’ for ‘50 cents’. ‘‘(4) CERTIFICATION FOR BIODIESEL.—No credit shall be allowed under this section unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer or importer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product. ‘‘(c) COORDINATION WITH CREDIT AGAINST EXCISE TAX.—The amount of the credit determined under this section with respect to any biodiesel shall be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 6426 or 6427(e). ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— ‘‘(1) BIODIESEL.—The term ‘biodiesel’ means the monoalkyl esters of long chain fatty acids de- rived from plant or animal matter which meet— ‘‘(A) the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U.S.C. 7545), and ‘‘(B) the requirements of the American Society of Testing and Materials D6751. ‘‘(2) AGRI-BIODIESEL.—The term ‘agri-biodiesel’ means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, and mustard seeds, and from animal fats. ‘‘(3) MIXTURE OR BIODIESEL NOT USED AS A FUEL, ETC.— ‘‘(A) MIXTURES.—If— ‘‘(i) any credit was determined under this section with respect to biodiesel used in the production of any qualified biodiesel mixture, and ‘‘(ii) any person— ‘‘(I) separates the biodiesel from the mixture, or ‘‘(II) without separation, uses the mixture other than as a fuel, then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(1)(A) and the number of gallons of such biodiesel in such mixture. ‘‘(B) BIODIESEL.—If— ‘‘(i) any credit was determined under this section with respect to the retail sale of any biodiesel, and ‘‘(ii) any person mixes such biodiesel or uses such biodiesel other than as a fuel, then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(2)(A) and the number of gallons of such biodiesel. ‘‘(C) APPLICABLE LAWS.—All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A) or (B) as if such tax were imposed by section 4081 and not by this chapter. ‘‘(4) PASS-THRU IN THE CASE OF ESTATES AND TRUSTS.—Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply. ‘‘(e) TERMINATION.—This section shall not apply to any sale or use after December 31, 2006.’’. (b) CREDIT TREATED AS PART OF GENERAL BUSINESS CREDIT.—Section 38(b) (relating to current year business credit), as amended by this Act, is amended by striking ‘‘plus’’ at the end of paragraph (15), by striking the period at the end of paragraph (16) and inserting ‘‘, plus’’, and by inserting after paragraph (16) the following new paragraph: ‘‘(17) the biodiesel fuels credit determined under section 40A(a).’’. (c) CONFORMING AMENDMENTS.— (1)(A) Section 87 is amended to read as follows: ‘‘SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS. ‘‘Gross income includes— ‘‘(1) the amount of the alcohol fuel credit determined with respect to the taxpayer for the taxable year under section 40(a), and ‘‘(2) the biodiesel fuels credit determined with respect to the taxpayer for the taxable year under section 40A(a).’’. (B) The item relating to section 87 in the table of sections for part II of subchapter B of chapter 1 is amended by striking ‘‘fuel credit’’ and inserting ‘‘and biodiesel fuels credits’’. (2) Section 196(c) is amended by striking ‘‘and’’ at the end of paragraph (9), by striking the period at the end of paragraph (10) and inserting ‘‘, and ’’, and by adding at the end the following new paragraph: ‘‘(11) the biodiesel fuels credit determined under section 40A(a).’’. (3) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding after the item relating to section 40 the following new item: ‘‘Sec. 40A. Biodiesel used as fuel.’’. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to fuel produced, and sold or used, after December 31, 2004, in taxable years ending after such date. ----------------------------- Homestead Inc. www.yellowbiodiesel.com _______________________________________________ Biofuel mailing list [EMAIL PROTECTED] http://wwia.org/mailman/listinfo.cgi/biofuel Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Biofuel archives at Infoarchive.net (searchable): http://infoarchive.net/sgroup/biofuel/
