Ethanol Tax Credit

ETHANOL TAX CREDIT

Beginning Jan 1, 2005, The American Jobs Creation Act of 2004 started a system for federal taxation of ethanol blends.

E10 blend will qualify for a $0.51 cent per gallon excise tax credit.

E85 will have a tax credit available of $0.43 cents per gallon.

This new tax credit is called the Volumetric Ethanol Excise Tax Credit.

This means blenders will pay the full rate of tax (18.4 cents per gallon) on each gallon of the gasoline/ethanol mixture, and then will provide the $0.51 cent per gallon tax credit.

This money will then be transferred to the Highway Trust Fund.

This ethanol tax credit will be a huge incentive and will have no negative effect on the Highway Trust Fund, and will be handled like the gasoline tax.

All producers both big and small of ethanol will receive the tax credit on a quarterly basis.

Figures show that the new VEETC (Volumetric Ethanol Excise Tax Credit) will contribute approximately $2 billion dollars per year into the Highway Trust Fund over the next 10 years.

This ethanol tax credit is given to oil companies as in incentive to blend ethanol with gasoline, and is commonly known as The Blenders’ Credit”

Small Ethanol Producer Tax Credit is given to producers that manufacture less than 60 million gallons of ethanol per year. This ethanol tax credit will give them 10 cents per gallon on 15 million gallons of fuel ethanol.

The Energy Policy Act of 2005 allows a 30 percent federal income tax credit (up to $30,000.00) to establish an alternative fuel infrastructure. This will allow taxpayers to claim up to 30 percent credit for the cost of installing a clean-fuel vehicle refueling property, which will be used in a trade or business of the taxpayer, or installed on the taxpayers residence.

Under current law, small ethanol producers are allowed a 10-cents per gallon production income tax credit on up to 15 million gallons of ethanol production annually. (from Renewable Fuels Association, 2007

In 2007 the Indy 500's race cars will be fueled with 100% ethanol. See what ABC News has to say about this, or MSNBC , corn has never looked to good!

Green Car Congress, a publisher focused on "Energy, Technologies, Issues and Policies for Sustainable Mobility" has this to report about the possibilities for future Ethanol-specializing yeasts for biomass

Ethanol-Still-Plans.com

Ethanol Tax Credit