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Ethanol

Taxing Ethanol Fuel Transactions


The most tenured of the popular alternative fuels, ethanol is blended with 97% of all gasoline sold at retail. Ethanol is derived from sugars, starches and cellulosic matter found in plants. It is often uniquely identified as the fuel made from corn. Classified as a biofuel, ethanol producers are able to take advantage of tax credits, loans and other government incentives.

Taxation Challenges

  • State mandates on amount of ethanol blended into gasoline
  • Tax rules for blending
  • Varying points of taxation along the supply chain
  • Tracking state and local tax regulations
  • Government loan program taxation
  • Changing rates, rules and forms

Examples

  • Effective 8/30/15, all gasoline sold or offered for sale in Minnesota must contain at least 20% ethanol (E20), unless, by 12/31/14, ethanol has already replaced 20% of all motor vehicle fuel sold in the state, or EPA has not granted approval for the use of E20 in all vehicles regardless of model year.
  • Rural Energy for America Loans & Grants – grants funding to agricultural producers to purchase or install renewable energy systems, including ethanol.
  • Iowa taxes ethanol at 29¢/gallon, while Illinois and Texas do not tax it all, and North Carolina taxes it at 36¢/gallon.

The Avalara Solution

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AvaTax Excise

Identify and calculate fuel transactions

Avalara AvaTax Excise identifies and calculates indirect taxes for fuel transactions with built-in support for all major jurisdictions in the U.S., Canada, and Europe.

Don’t guess about the correct taxes for your fuel transactions. Try AvaTax Excise for free at ExciseRates!

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Returns Excise Enterprise

Fuel tax compliance automation

Avalara Returns Excise Enterprise generates signature-ready fuel tax returns and reports from fuel transaction data, enabling distributors, terminal operators, suppliers, fleets, and retailers to fully automate the filing process and ensure tax compliance.

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Returns Excise Pro

Easy fuel tax filing

Avalara Returns Excise Pro simplifies fuel tax filing through automation, enabling small and medium sized suppliers, distributors and terminal operators to reduce filing time and costs. An ideal solution for -

  • Smaller businesses facing electronic filing mandates
  • Businesses operating in less than 5 states
  • Businesses with less than 500 transactions per month
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CertCapture

Manage your fuel licenses and exemption documents

Avalara CertCapture creates, validates and stores fuel license and exemption documents, ensuring tax calculation and compliance accuracy, limiting audit exposure.

AvaTax Excise and Returns Excise Enterprise integrate directly with CertCapture to provide a fuel license and exemption document management solution. Learn more about integration.

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Browse Our Resources On Ethanol

View our free resources on ethanol. A one-time registration is required.

ethanol taxation challenges preview
Ethanol may not be new to the fuel market, but tax complexities, specifically of higher level blends of ethanol, are difficult (and important) to understand. Download Now
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Jessica McInerny, Tax Advisor at Cargill joins Bubba Lange, Sr. VP of Solutions Engineering at Avalara to discuss how to embrace the alternative fuel movement by uncovering excise tax challenges unique to alternative fuels. Watch Now
emerging fuels taxation solution preview
Alternative fuels like ethanol, biodiesel and natural gas are becoming mainstream. The story continues to unfold and as it does tax rates, rules and incentives constantly change. Watch Now
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In his typically entertaining way, Will takes us through the complexities of taxation laws for alternative and emerging motor fuels. Prepare to learn! Watch Now