Ethanol Laws and Incentives in Montana

The list below contains summaries of all Montana laws and incentives related to ethanol.

State Incentives

Alternative Fuel Production Property Tax Incentives

Biodiesel, ethanol, renewable diesel, and sustainable aviation fuel production facilities may be eligible for property tax abatements. Additional terms and conditions apply.

(Reference Montana Code Annotated 15-6-157, 15-6-158, 15-24-3111)

Ethanol Production Facility Property Tax Exemption

Equipment used to produce ethanol from grain is exempt from state property taxes during construction of an ethanol manufacturing facility and for 10 years after the manufacturing facility construction is complete.

(Reference Montana Code Annotated 15-6-220)

Ethanol Production Incentive

Montana-based ethanol producers are eligible for a tax incentive of $0.20 per gallon of ethanol produced solely from Montana agricultural products or ethanol produced from non-Montana agricultural products when Montana products are unavailable. If the producer uses non-Montana based agricultural products, the amount of the tax incentive per gallon is reduced proportionately, based on the percentage of non-Montana based agricultural or wood products used in production. The tax incentive is available to a facility for the first six years from the date production begins and is available for ethanol distributors starting the first quarter after production begins.

Ethanol eligible for the incentive must be blended with gasoline for sale as ethanol-blended gasoline in Montana, exported from Montana for sale as ethanol-blended gasoline, or used in the production of ethyl butyl ether for use in reformulated gasoline. To receive the tax incentive, an ethanol producer must use at least 20% Montana products to produce the ethanol in the first year of production, must use at least 25% Montana products in the second year of production, and must increase the amount of Montana products by 10% each year thereafter.

(Reference Montana Code Annotated 15-70-522)

Laws and Regulations

Carbon Penalty Prohibition

Local governments are prohibited from imposing penalties, fees, or taxes on carbon or carbon use, including but not limited to the carbon content of fuels or electricity in the transportation sector.

(Reference Montana Code Annotated 7-1-111 )

Energy Performance Contract Authorization

Government entities in Montana are authorized to enter into energy performance contracts to pay for energy efficiency improvements with energy savings, including savings from the use of energy-efficient vehicles.

(Reference Montana Code Annotated 90-4-1101)

Ethanol Fuel Blend Use Requirement

State government agencies and universities owning or operating motor vehicles capable of using ethanol-blended gasoline must take all reasonable steps to ensure that the operators of those vehicles fuel with ethanol-blended gasoline if it is commercially available within the vehicle’s operating area and competitively priced as compared to conventional gasoline.

(Reference Montana Code Annotated 2-17-414)

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