Taxing Biodiesel Fuel Transactions
One of the most renewable fuels, made from a blend of materials like plant mass, byproducts of soybean oil, recycled cooking oil and animal fats, biodiesel is slowly gaining momentum as a substitute for petroleum-based diesel. Biodiesel is a relatively new fuel, so taxation policies at every jurisdictional level are still being debated and refined. Expect more changes ahead.
- Tax rules for blending
- Varying taxation points along the supply chain
- Tracking state and local tax requirements
- State incentives and rebates
- Changing rates, rules and forms
- The federal government does not charge excise tax on 100% biodiesel, but it does when it is blended with petroleum-based diesel fuel.
- Kentucky offers a $1.00 per gallon credit for B100 produced or used in the blending process. Find more state laws here.
- The Federal Advanced Biofuel Production Payments grant provides payments to support the production of biodiesel.
- Blended biodiesel (B20) is subject to a 16¢/gallon tax in Texas and a 22.5¢/gallon tax in Iowa.
- Illinois does not require any fuel licenses until after blending. Florida requires licenses for buying and selling. South Dakota requires 4 separate licenses.
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Browse Our Resources On Biodiesel
View our free resources on biodiesel. A one-time registration is required.