Alternative Refueling Tax Credit for Biodiesel

Jr. Carney  |  4/30/2012 11:06:44 PM

Over the years, many government institutions have recognized the environmental benefits of using biodiesel and have put incentives in place in the form of tax incentives to promote its use.

These exist in the United States at the federal, state and sometimes even local level. For several years one of the best biodiesel tax incentives was given at a federal level in the form of a $1 per gallon tax credit for every gallon produced and sold. However, it expired at the end of 2009. and as of Feb. 2010, it still was yet to be renewed.

There are still several other tax incentives available to biodiesel producers, both at the commercial level and at the hobbyist, small-scale level.

One of the easier ones to obtain if you qualify is the Alternative Fuel Refueling Infrastructure Tax Credit. It offers qualified individuals up to $50,000 or 50 percent of the value of the refueling equipment placed into service in a business setting. For personal-use equipment, the credit allows up to $2,000 or 50 percent of the value of the refueling equipment.

Here are the details on qualifying for the credit from IRS Tax Form 8911.
  • Qualifying alternative fuel vehicle refueling property is any property (other than a building or its structural components) used to store or dispense an alternative fuel (defined below) into the fuel tank of a motor vehicle propelled by the fuel, but only if the storage or dispensing is at the point where the fuel is delivered into that tank.
  • In addition, the following requirements must be met to qualify for the credit.
    • You placed the refueling property in service during your tax year.
    • The original use of the property began with you.
    • The property is not used predominantly outside the United States.
    • If the property is not business/investment use property, the property must be installed on property used as your main home.

For example, a BioPro 150, BioPro 190 or a BioPro 380 Automated Biodiesel Processor with a fuel filler pump installed on it may qualify. As long as it has the ability to dispense biodiesel into a fuel tank (i.e. a fuel filler pump), it has the potential to qualify.

As always, consult your tax professional for full details to see if you can take advantage of this great credit. If so, you may just be getting a little extra "green" this tax season!

Additional Resources
IRS Tax Form 8911 - Link right to the IRS tax form
UBS Tax Incentives - List of tax incentives at our site
US Tax Incentives - Link to US Department of Energy incentives listing alternative fuel tax incentives available through US State & Federal Governments

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