Iowa enacts biodiesel tax credit
Jul 1, 2006 12:00 PM
Iowa lawmakers have approved renewable fuels and infrastructure bills that provide for point-of-sale retailers to receive a three-cent income tax credit on each gallon of a 2% biodiesel (B2) blend or higher, according to the National Biodiesel Board (NBB).
To qualify, at least half of the distributor or retailer's diesel sales must be B2 or higher blend levels. Another bill establishes a renewable fuels standard, saying sales of ethanol or biodiesel must equal 25% of a retailer's fuel sales by 2020. There are exceptions for small fuel retailers.
NBB also said other states have enacted legislation this year that will impact biodiesel use:
New York passed a residential bioheat credit that takes effect in July. The state income tax incentive allows homeowners to receive one cent per percentage of biodiesel blended into heating oil, not to exceed 20 cents a gallon.
Washington signed into law a 2% biodiesel volumetric requirement. The requirement goes into effect Dec 1, 2008, or when feedstock grown in the state can meet the 2% requirement, whichever comes first.
Colorado, Arizona, Hawaii, and Maryland added requirements for state fleets to use or give preference to biodiesel blends when available.
Kansas will award qualified biodiesel fuel producers with a 30-cent-per-gallon incentive for each gallon they sell, beginning April 1, 2007.
Arkansas provides for a 50-cent excise tax credit on B100 gallons used for blending, limited to the first 2% of total gallons of biodiesel blended.
California Gov Arnold Schwarzenegger issued an executive order establishing a target of 20% renewable fuel use in the state by 2010.
Indiana's law provides extension of tax credits for production, blending, and retail sales.
Virginia passed a biofuels production fund and grant incentive program.
As a whole, bills have also included point of taxation clarification, authorization of studies, bills related to schools and buses, and biodiesel promotion. Specifically, bills have provided for public lands for oilseed production, conversion allowances, and an education fund, according to the NBB.
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